Ready, set, plan
Six emerging practices are changing the way you operate from receiving to shipping. Don't get caught without a plan.
By Staff -- Modern Materials Handling, 5/15/1999
According to some of the most knowledgeable experts, the traditional supply chain is more than just a little bit dysfunctional.While that may seem like a brash statement at first, take a look at your company, its suppliers, and your customers. Find any significant inefficiencies? Most likely you can. And they aren't all that difficult to uncover.
In fact, there's a lot of wasted effort that does nothing to add value or get the final product to the ultimate consumer in a better form. Basically, the supply chain costs much more than it should. It takes much longer than necessary to move goods. And to make matters even worse, the supply chain as it now stands is not a good deliverer of customer satisfaction.
That's what the experts are saying. And they're right.
Jim Allred of Eskay Corp. tells the story of analyzing one company's internal supply chain- how it handles materials within its own four walls.
"We found that each product was touched 37 times before it was shipped. And of those 37 touches, 29, or nearly 80%, were touches that added no value," says Allred.
And that's just one link in the supply chain.
"In traditional flow, each step in the chain works independently of the others," says Robert Olsen of Tompkins Associates. "Other than information passed on about an order, each organization is oblivious to the activities of all others in the supply chain. The reaction of the system to demand is hindered. Product is not delivered in a timely manner, stock buildups occur, production capacity is wasted, and costs rise."
That's the state of today's supply chain. Fortunately, change is in the air.
In last year's edition of the Plant and Warehouse Planning Issue, we introduced you to six practices that are changing the supply chain. The six are listed on the second page of this article.
As we pointed out at the time, none of the six are theoretical. All are practical, operational models being used right now by leaders in warehousing and manufacturing.
Pure efficiency and cost-effectiveness are not the only reasons these six practices are working their way into the mainstream of the supply chain. Customer requirements are changing too. They know specifically what they want, when they want it, and how they want it delivered. Meet their requirements, or they may well go someplace else next time.
Clearly, the supply chain needs an upgrade just to keep pace with heightened customer expectations. For the six practices, it's a matter of being in the right place at the right time.
The same is true of current materials handling systems and related information system technologies. But it's not just a matter of taking a conveyor or bar code scanner, for instance, and using them just as in the past. You need to plan with the various practices in mind.
To make the match requires careful planning. And that's what this issue of MMH is all about.
We have broken it into five sections:
* Receiving/putaway
* Storage/staging
* Manufacturing
* Order processing
* Shipping
Each story offers you tips, guidelines, and proven materials handling and information systems that make the six emerging practices work day in and day out in that particular department.
As you will find, there are plenty of options available. There is no silver bullet plan that works for any or all of the practices.
Take the manufacturing floor of three adaptable manufacturers- General Motors, Rover, and Harley-Davidson. All build vehicles in a pre-set sequence. Yet they have chosen different approaches, ranging from an automated storage and retrieval system to a towline conveyor to sequenced vehicle bodies. Meanwhile, parts and components are delivered in sequence from off-site suppliers at GM, but at Rover they come from an on-site, multi-building staging center.
The key to success is first understanding your handling and information requirements. You should take into account the practice or practices you need to adopt and then modify the individual departments from receiving to shipping accordingly. Then you can evaluate equipment and software options against your specific needs.
Hopefully, the stories on the following pages will help you do this as you make your plans to upgrade your portion of the supply chain.
ORDER ASSEMBLY CENTERS
These conventional warehouses of the new millennium will accommodate a broad stock keeping unit mix, ship orders the same day as received, and accommodate unexpected order patterns.
VALUE-ADDED SERVICE CENTERS
Driven by customer requirements, these facilities perform varied tasks from applying retail tags to managing inventory replenishment automatically.
ADAPTABLE MANUFACTURING
Once orders are placed, the production line is sufficiently agile that it can produce on demand individually unique products as cost-effectively as large quantities of the same product.
CROSSDOCKING
Already well established, this practice allows a warehouse to bypass storage by receiving and then almost immediately shipping inventory in customer-requested quantities.
FLOW-THRU WAREHOUSING
A close cousin to crossdocking, flow-through warehousing takes pallet loads, breaks them down, reconfigures inventories to fill specific orders, and then ships in short order.
POSTPONEMENT SYSTEMS
Warehousing large quantities of generic product allows the warehouse to delay customization of inventory until customers detail their specific requirements.
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