Reinforcing internal supply chain logistics

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.

Production and distribution even in the same plant are often not tied to each other. Distribution complains that they are the recipients of push from manufacturing to distribution. In the internal supply chain, the logistics of push is hard to deal with. Each hour the warehouse is faced with decisions of where to put product as it arrives off the line. This is far from a linked activity.

Purchasing and manufacturing seem to always be a dysfunctional link in the supply chain. Manufacturing mostly wants the status quo while purchasing seeks to change to get closer to the perfect supplier. Often, however, the decisions are not shared as independent departments see little logistics synergy. The result is often service disruptions and higher logistics costs.

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.

At headquarters, Distribution Requirements Planners create movements from plants to DC’s. They do this without regard to supply chain costs or the products themselves. Take, for example, the case of store-ready displays that cannot double stack inside a truck. Instead of mixing them with other products that they can stack on, planners ship straight loads that neither cube-out nor weigh-out the truck. In one recent example, the shipping plant identified a 30=% savings for being smarter. Unfortunately those up the information supply chain ladder chose to ignore this advice from the trenches.

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.

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.

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