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Business Management Reinforcing internal supply chain logistics
Business Management Reinforcing internal supply chain logistics
| Reinforcing internal supply chain logistics |
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| Written by Tom Moore |
| Friday, 27 February 2009 09:02 |
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The links in the supply chain are by no means strong and effective. The benefits of strong linkages are clearly higher service, less inventory, and lower costs. Today, many of the linkages between customer and supplier are weak. But so too are linkages in most company's internal supply chain. For examples of weak linkages in the supply chain, this article will look at the connection between purchasing and manufacturing, production and shipping, as well as between logistics planning and execution. Unfortunately software has done little to enhance supply chain logistics linkages but a new generation of functionality is supporting growth. Distribution is often the recipient of product it does not need to fulfill customer orders. Distribution managers are faced with the problem of where to put this product that has been pushed to them. Unfortunately, there are elements of this in many supply chain operations causing overflow space in large warehouses and incur transportation and handling costs shuffling the product to its new home. Purchasing and production are two links in the supply chain that have often been at loggerheads. This may be caused by purchasing's incentive system that is structured to reward the better price but cant count the additional costs caused by inferior product reaching the production line. The logistics of fixing this are hampered by a lack of good data. Price does not equate to value. This tenet is true in logistics as it is in other areas. Unfortunately, the transportation procurement groups often don't heed the transportation operations team. The result of this is losses like smaller payloads for the so-called cheap carriers. This excess cost shows up in total cost but not in the price. 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. The internal supply chain doesn't have to be dysfunctional. There are easy ways to improve communications and create a linked internal supply chain. Reward everybody in the supply chain using the same set of metrics. In this way, purchasing prospers when manufacturing succeeds in lowering total product cost. Coordinating planning and execution requires planning systems to link to execution systems " or better, use the same systems. 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. About the Author: Tom Moore and his associates at Transportation | Warehouse Optimization will help you reduce freight rates and save you money. Transportation | Warehouse Optimization consults with companies such as Procter & Gamble, BP and many other CPG companies. They can help you reduce freight rates and save money. Kindly provided by MoneyHunter.org You are welcome to use this article on your own website, if you include the link just before this text. |
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