Putting real links in internal supply chain logistics
Companies have compensated for the lack of coordination of logistics activities in the supply chain. Inventories fill warehouses, trucks wait for loads, customers get lower fill rates and shareholders get less return as a result of gaps in software and methodology. This article explores gaps in the internal supply chain that cause inconsistency in what should be a smooth flow of information and materials.
The line was running well, so we just kept making it. How often have supply chain managers heard that? It seems like all concepts of the linkage that a chain implies is often lost between production and the distribution team that stands between the customer and the point of manufacture.
In the sad but true category is the story of the pushy purchasing manager who got a promotion by getting a different bottle supplier for a filling plant. The supplier was miles away and unable to keep up, forcing the production lines to be scheduled based on what bottles could be delivered. This purchasing decision to switch suppliers, which is not uncommon, saved little and created a rift between manufacturing and purchasing while creating a dysfunctional supply chain with more of the wrong inventory filling hastily secured outside warehouse space.
Often the people negotiating with carrier are not the same people who, on a day-to-day basis, deal with tendering shipments on loading trucks. This generates higher logistics costs as, for example, the lowest priced carrier also provides equipment that cant haul as much weight as a modestly higher cost carrier with lightweight equipment.
And our last example of dysfunctional internal supply chain practices is the gap between the planning and execution. How often does a plant get blamed for cutting product from a shipment when they physically cant get it all on the truck? Often, it is the distribution planner on the order management system that makes the mistake not the plant. Without information on product stack-ability, an understanding of different states axle restrictions, they plan in such a way that it cant be executed. The cost to the supply chain can be large as customers are hurt.
There are systems that support the integration of the internal supply chain. These execution systems plan short time intervals ” often as short as 10 minutes. In this way, they coordinate the use of shared resources such as dock doors, inventory, and people. This, combined with an incentive system that is consistent across the whole operation, makes everybody work to the same end. A good example of this is requiring certain profit and capital milestones be met before anybody gets bonus.
There are two systems that work to coordinate operations. A good vehicle load builder designs loads that max out the trailer while providing detailed instructions to the loader. These instructions tell where each pallet case should be placed. Another system that supports supply chain logistics optimization is a distribution master scheduler. Scheduling each activity, from line-take-away to where and when a customer shipment should take place ” all in a 10-minute time frame created a capacity constrained plan that optimizes activities.
Sign up for the exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for lift truck operators at www.TransportationOptimization.com. While there, request a call back from one of the premier transportation consultants in the industry, Tom Moore or one of his associates from Transportation | Warehouse Optimization. Working for many companies in the top Fortune 50 ” like Procter & Gamble and BP ” they understand your unique problems and can help you solve them. Transportation | Warehouse Optimization – Solutions that work. Solutions that save.
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