Reinforcing internal supply chain logistics

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.

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.

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.

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.

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.

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.

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