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.
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.
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.
In large companies where the transportation department is divided into operations and procurement, the linkages here are often weak as procurement works to find the best prices while operations are more concerned with availability, quality, and payload. This approach does little to optimize the supply chain.
DRP planners often create plans that the loaders in the warehouse cant execute. For example, trying to ship 30 pallets of product having a pallet layer pattern that over-hangs the pallet by 2 inches each direction. There is no way this fits on the truck! Result " logistics misery " cutting product and creating potential shortages.
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.
Optimizing the internal supply chain requires logistics systems that go far beyond the simple transaction-oriented WMS, TMS, or load builder. There are two categories of optimization systems that generate the biggest return: Distribution Master Scheduling and Vehicle Load Building. Distribution Master Scheduling generates optimized plans for optimizing all activities after production. Working in 10 minute increments, the capacity constrained system provides plans that make what is planned be what is executed. The same is true for Vehicle Load Building. This optimizer creates the shipment that fills out the load (weight/cube or both) and provides the warehouse with detailed pick lists and loading instructions to ensure everything fits legally and damage free.
When you consider a transportation consultant, Transportation | Warehouse Optimization have been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view and keep the client as top priority. Contact them at www.TransportationOptimization.com for transportation cost reductions or solutions to warehouse challenges. While visiting their website, sign up for their exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for lift truck operators. Transportation | Warehouse Optimization - Solutions that work. Solutions that save. - 15275
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.
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.
In large companies where the transportation department is divided into operations and procurement, the linkages here are often weak as procurement works to find the best prices while operations are more concerned with availability, quality, and payload. This approach does little to optimize the supply chain.
DRP planners often create plans that the loaders in the warehouse cant execute. For example, trying to ship 30 pallets of product having a pallet layer pattern that over-hangs the pallet by 2 inches each direction. There is no way this fits on the truck! Result " logistics misery " cutting product and creating potential shortages.
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.
Optimizing the internal supply chain requires logistics systems that go far beyond the simple transaction-oriented WMS, TMS, or load builder. There are two categories of optimization systems that generate the biggest return: Distribution Master Scheduling and Vehicle Load Building. Distribution Master Scheduling generates optimized plans for optimizing all activities after production. Working in 10 minute increments, the capacity constrained system provides plans that make what is planned be what is executed. The same is true for Vehicle Load Building. This optimizer creates the shipment that fills out the load (weight/cube or both) and provides the warehouse with detailed pick lists and loading instructions to ensure everything fits legally and damage free.
When you consider a transportation consultant, Transportation | Warehouse Optimization have been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view and keep the client as top priority. Contact them at www.TransportationOptimization.com for transportation cost reductions or solutions to warehouse challenges. While visiting their website, sign up for their exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for lift truck operators. Transportation | Warehouse Optimization - Solutions that work. Solutions that save. - 15275
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.
