Wednesday, August 10, 2016

Supply Chain Industrial Engineering and Cost Reduction/Management Ideas

Increasing Productivity Through Your Supply Chain

Boosting Innovation and Productivity through Supply Chain Management in Highway Construction


LEAN Supply Chain Planning: The New Supply Chain Management Paradigm for Process Industries to Master Today's VUCA World

Josef Packowski
CRC Press, 26-Nov-2013 - Business & Economics - 493 pages

Delivering excellent service to all customers is the key imperative for many sustainable businesses. So why do so many supply chains struggle to fulfill customer requirements at competitive costs? The answer is simple: traditional supply chain planning, which was tailored to a predominantly stable and predictable business environment, cannot handle the new challenges in the world of variability, uncertainty, complexity, and ambiguity—the VUCA world.

Companies can either accept the drawbacks that often result in high inventories, poor asset utilization, and unsatisfactory customer service or, they can change their view of the fundamental approach to supply chain management. LEAN Supply Chain Planning: The New Supply Chain Management Paradigm for Process Industries to Master Today’s VUCA World introduces a new paradigm and a new approach to managing variability, uncertainty, and complexity in today’s planning processes and systems.

Introducing a cutting-edge supply chain management concept that addresses current problems in the process industry's supply chains, the book presents powerful methods developed by leading research institutes, process industry champions, and supply chain experts. It explains how readers can change their approach to the fundamental planning paradigms in a manner that will help their organizations achieve higher levels of responsiveness, improved levels of customer service, and substantial increases in cost-efficiencies.

This holistic practitioner’s guide describes how to establish the right accountabilities for performance management and also provides a set of meaningful metrics to help measure your progress. Supplying detailed guidelines for transforming your supply chain, it includes first-hand reports of leading organizations that have already adopted some of the facets of this paradigm and used the relevant instruments to achieve unprecedented improvements to customer service, supply chain agility, and overall equipment effectiveness.

5 Ways to Increase Productivity and Performance in Your Supply Chain

Focusing on tactics that will increase a supply chain’s productivity is essential to earn adequate profits through achieving positive customer satisfaction. Apart from improving products and processes, there are some other very effective ways to do this.

Efficient Communication: Communicate with your supply chain partners  in a clear and concise manner that defines supply chain goals and the methods to achieve those goals. This communication is crucial to a supply chain’s operations and productivity. By scheduling meetings devoted to collaborative problem-solving, management is able to make essential changes regarding performance. This diligent problem-solving ensures a unified understanding of productivity and operations that will facilitate open communication between supply chain partners.

Development of Procedure Standards: The development of procedure standards reduces error within the supply chain and saves both time and money. Focus on the reduction of probable variation in areas such as receiving, quality control, shipping, shift scheduling, and facilities management. This is one of the many ways to increase collective productivity and establish procedure standards.

Determination of Importance: Continuous improvement to supply chain productivity depends on the areas where attention is given.  Measuring outcomes in critical areas that drive business, for example: Safety, Service/On-Time Delivery, Inventory Accuracy/Turns, Productivity, Cost per Unit/Total Landed Cost, Product Damage/Claims, Customer Satisfaction

Engage, Align, and Empower Workforce: Encourage supply chain partners to focus on the core skills of employees and empower them. This focus will foster confidence and result in a continuous increase of productivity. Gaining the buyin of workforce makes it possible to create new ways to engage and align, to ultimately increase productivity. Be sure to define supply chain’s goals in a clear and concise method that will allow employees and management of supply chain partners to take advantage of existing and future opportunities for improvement.

Construct a Powerful Training Program: First, formulate a comprehensive plan to increase productivity, reduce costs, and improve customer service and satisfaction levels. Then tie an incentive plan into the supply chain’s core mission, a critical element to building a performance-based approach. Train supply chain partners and their employees in implementing the new plan.  This constructive training will drive a successful organization and improve supply chain productivity.

Increasing productivity within the supply chain is achieved through a top down approach – everything rises and falls on the supply chain leader. Leaders must practice effective communication, create procedure standards, determine a hierarchy of importance, encourage empowerment of  the workforce of supply chain partners, and arrange powerful training programs. Management and employees of the supply chain leader have to first create and establish a performance-based culture within their company and then in its supply chain partner companies.
Adapted from


Labor management systems: Labor is a significant expense item in warehousing costs. A robust warehouse labor management system (LMS) can help you understand this expense. An LMS lets you  examine tasks such as receiving, put-away and processing at the individual level. You can evaluate performance elements more closely, isolate problem areas and make better decisions about training, staffing and management. It also enhances accountability for all employees, which often brings out their best performance.

Picking devices and technologies: Sometimes, the best order-picking alternative is an employee’s hands. At other times, a device that picks a whole layer of cases at a time could be economical  and much faster,  Some of these machines can double or triple picking volumes for the same time.  Hands-free voice picking devices are another fiscally friendly upgrade.

Cut down lighting costs: Warehouse energy bills can exceed $100,000 annually.  Today’s energy-efficient  lighting technologies offer brighter, greener and less expensive electricity alternatives.

A relighting project may demand upfront investment,  but provide saving up to 50 percent as soon as new lights are installed. These projects also could earn tax breaks or incentives from local governments and utilities. They also could reduce the expense of any carbon offset purchases your company plans to make.

Interleaving: In the average warehouse, forklift operators move between a couple of points such as a loading dock and storage racks. On the initial trip, these vehicles usually are full — and fully utilized. But they’re empty while returning, a process known as deadheading. Deadhead journeys can add up to countless empty miles and wasted operator time.

Interleaving rearranges workflow so forklift operators travel in a circular motion or some other route configuration, better using the traveling time between racks and loading docks. Interleaving designs vary significantly from facility to facility. And since most all facilities use forklifts, this growing practice deserves a closer look. Granted, it requires robust systems capacity and cooperative operators who will embrace the change. However, the ultimate payoff can be significant

There are some  more money-saving warehousing investments such as thermal-shrinking machines, financial gainsharing incentives and space utilization tools.

Adopted from

Supply Chain by Rajiv Saxena
Industrial Engineer's quarterly column about supply chain and logistics solutions (July 2011)

Ken Ackerman's Warehousing Fourm

Supply Chain Industrial Engineering -  Presentation Video


Updated  12 August 2016, 8 April 2013

1 comment: