Ever had one of those days where you set out to run three easy errands but end up driving in multiple circles, making 7 unplanned stops and not getting home until well after dinner? Us too, and this is an apt analogy for how some supply chain transportation logistics networks are running these days—with trucks making multiple partial runs, unplanned stops being added to the itinerary at the last minute, and containers sitting on the dock for days. Transportation logistics is chock full of low hanging fruit when it comes to optimizing your network and reducing waste. With the unnecessary movement of goods, half-empty trucks, and trucks sitting around while warehouse staff scramble to find the entire order—this is an area ripe for optimization. We’re going to look at a handful of examples of how you can start working toward the goal of cutting transportation logistics waste from your supply chain.
Remember your last car trip? You spent all that time planning your route to maximize the sights you would see. Then you organized your equipment and snacks and packed the car just right so everything was easily accessible. Can you imagine what would have happened if you went to leave and the car didn’t start? Now your whole itinerary is thrown off, you have to call roadside assistance, change the hotel reservations, not the way to start a great vacation. The analogy to the transportation leg of your supply chain is clear—if you neglect one segment the whole system can come crashing down. In order to optimize your end-to-end supply chain, you need to pay close attention to the transportation network. This is often the place where systems break down and costs can spiral out of control. On the other hand, just as doing preventative maintenance on your car eliminates the possibility of the failure of your vacation, optimizing your transportation network can eliminate cost overruns and other disruptions to your smoothly functioning supply chain. Follow these best practices and you’ll be off to a great start.
Sustainability is more than a buzzword. In a recent study reported in Forbes, a whopping 88% of those polled say they are more likely to support brands that they view as helping them lead more ethical and sustainable lives. What impact does this have on your supply chain? Well, the public is who ultimately buys your product, and they’ve spoken. They want companies to care as much as they do about leaving a better planet for the generations to come. As members of the global community, we need to step up and do what we can to support the goals laid out by nations the world over, to clean up sourcing, pollution, workforce conditions, and more. Just how to go about cleaning up an end-to-end supply chain is a complicated question, so here are some guidelines we hope will help set you on the right path.
Industry 4.0 technology is making its impact felt all along the supply chain as we enter the third decade of the 21st-century. Alongside IoT sensors, GPS trackers, smart pallets, and robotic picking technology, the progress made in supply chain management software has been unstoppable. Whereas once Excel sufficed to layout a strategic plan and track forecasting, today this method is becoming increasingly outdated and outpaced by more collaborative options. These new systems allow for real-time updates and enable real-time collaboration on planning documents by multiple stakeholders at the same time.
We’re surrounded by redundant expressions every day. Close proximity and basic fundamentals spring immediately to mind. Unintended mistake, past history, and plan ahead follow close behind. When hearing the phrase “advanced analytics,” many people jump to the conclusion that this is just another business-speak example of redundant word use. Aren’t all analytics advanced? In truth, the expression has a specific use, particularly in a discussion of data use in supply chain management.
Wouldn’t it be nice if supply chains could run themselves? Well, between automated scheduling, production machinery, and even logistics planning, you can achieve a fair approximation using the right tools. Even so, there are plenty of places along the value chain where things can go sideways. The headaches may be less frequent, but they are no less real. No matter how seemingly care-free your supply chain, there are aspects you’ll want to closely monitor to ensure that smooth running continues. Crucial to each of these is the visibility into your processes that comes with Industry 4.0 technology and a solid supply chain management solution.
Have you ever headed out for a family picnic, only to arrive and find your favorite meadow has been dug up to make way for a new housing development? Or left the house for a walk, and had it start pouring rain once you were ½ mile away? Did you have a contingency plan for that picnic, a backup location already selected? Were you carrying a raincoat in your backpack on that walk? These are examples of real-time planning in the regular world, but the concept transfers directly into the manufacturing realm in the form of being able to adjust and pivot as necessary. This real-time planning ability relies on more accurate demand forecasts, better visibility into the production line, and greater reporting functionality. In order for your company’s APS (advanced planning and scheduling) to be effective, let alone real-time, there are some contingencies that you’ll need to take into account.
Has your supply chain management situation changed recently? We’d wager it has. With the introduction of Industry 4.0 technologies to the value chain over the last few years, things have been changing at an ever-increasing pace. Where once there were information silos, spreadsheets, and clipboards, now there are SCMS solutions, AI-powered advanced analytics, and IoT sensors. Rather than being the purview of autonomous managers acting in their own departments’ best interests, there are CSOs (chief supply chain officers) acting in the best interest of the whole company. And along with that shift has come a renewed understanding that the company’s best interest is generally synonymous with the customer’s.
How are you using your ERP software? Strictly for resource planning, as intended? Or are you stretching that definition to include aspects of your supply chain management needs as well? ERP solutions are an offshoot of financial software, and most of it functions as such and can be clunky when pressed into alternative uses. A dedicated SCM software solution, on the other hand, is as flexible and multifunctional as your supply chain itself. Think of it like this: would you rather build your personal daily calendar out of an Excel spreadsheet, which is totally doable, or just use a ready-made calendar tool like Google Calendar? Yes, both are workable solutions, but only one is actually made to help you keep track of lunch dates and offer reminders for those important meetings you just can’t miss.
Whether you're creating a more synergistic relationship with a supplier of raw materials as an auto manufacturer or developing special relationships with retailers to improve the performance of your packaged consumer goods, collaborative supply chain partnerships often feel like the holy grails of the modern value stream. This is with good reason: a strong partnership in which information, risk, and benefits are shared equitably can add real value on both sides of the relationship in the form of reduced costs, smarter forecasting, or any number of other benefits. It's easy to see why people are willing to devote time and mental energy to it.