The concept of a supply chain seems to suggest strong links between supplier, manufacturer, distributor, and customer. But supply chain logistics professionals know this is often far from the truth. Even inside an individual company, the links between functions are weak. In the same plant, the shipping dock is not coordinated with the production planner, purchasing is not aligned with manufacturing and warehousing feels that everything flows down hill from production. We will look at some of the links in this internal supply chain and how they impact logistics performance and then introduce a new class of system that can plan across silos.
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.
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.
Getting internal supply chain integration required both the right systems and supply chain wide integrated incentives. These incentives require all people in the organization to gain when, as a whole, the operations prosper.. To enhance communications systems need to operate at a grandular level " small time means. These short intervals are needed to manage dynamic operations where often things happen just-in-time.
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.
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.
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.
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.
Getting internal supply chain integration required both the right systems and supply chain wide integrated incentives. These incentives require all people in the organization to gain when, as a whole, the operations prosper.. To enhance communications systems need to operate at a grandular level " small time means. These short intervals are needed to manage dynamic operations where often things happen just-in-time.
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.
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.
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