Archive for the ‘Warehouse management’ Category:
LG aiming to globalize its Supply Chain network
Last month, at the Council of Supply Chain Management Professionals conference, LG’s Chief Supply Chain Officer Didier Chenneveau revealed the fact LG had been making dramatic supply chain strides with the goal of becoming a top three company in each of its markets. Some of the broader supply chain steps taken by LG include:
* An increase in outsourced manufacturing .
* Improved cost visibility across the organization
* Globalization of its supply chain.
* A move to a more demand-driven supply model with more accurate forecasting.
Among the specific strategies taken up by LG’s supply chain team are:
* Creation of 10 metrics across various areas to track progress and report to the CEO on them twice a year
* Standardize on one ERP system (Oracle)
* Standardize on one financial system
* Consolidate the various WMS/TMS instances
* Standardize RFPs and contract terms and conditions across the company
* Improve sales forecast accuracy from 30% in 2008 to its current level of 40% with the goal of 60%
* Make English the standard language across the company’s supply chain to facilitate better communication
* Standardize job titles in the supply chain
* Rationalize the more than 41,000 SKUs LG carried in 2008.
LG Electronics has been taking these steps with a goal of outsourcing more manufacturing as it moves from a mostly Asian manufacturer to a global consumer electronics giant.
Subscribe to the comments for this postPlug Power announces its strategy to achieve profitability
Plug Power Inc. is an established leader in the development and deployment of clean, reliable energy solutions, integrates fuel cell technology into motive and continuous power products. Now the company, during its analyst and investor meeting held on Thursday, October 8, 2009, announced its strategy for achieving profitability and generating a positive cash flow for the first time in the Company’s history.
For this, Plug Power will focus resources on its two commercial products, GenDrive(TM), a superior alternative to lead-acid batteries in the material handling market, and GenSys(R), a continuous-run prime power system that replaces diesel generators at remote telecommunication sites where the grid is non-existent or unreliable.
The Company’s presentation highlighted its plans to double shipments of their products each year from 2010 to 2012, equating to approximately 7,200 to 9,400 shipments at the end of 3 years which in turn would double the revenue over the same period.
In an attempt to attain its goal of profitability, Plug Power will try to lower product costs by leveraging the supply chain, lowering manufacturing costs and improving system reliability for both product lines. Key success factors include product expansion, starting with the release of the class-2 stand-up reach truck product for electric lift trucks in the fourth quarter of 2009.
“Plug Power has established a strategy to bring the Company to profitability,” said Plug Power’s CEO, Andy Marsh. “We have surveyed what it will take to sustain Plug Power into the future and have developed a thoughtful plan to engender success.”
The objectives of Supply Chain Management
The Term Supply Chain Management came into existence in 1980s with an objective of addressing the needs of consolidating key business processes, from the original suppliers to the end users. Here, original suppliers refer to those identities which provide products, services and information that add value for customers and other stakeholders. Thus Supply Chain Management requires that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations and production capabilities.
The idea is to optimize the entire supply chain network by providing all the relevant information to every relevant company in the supply chain instead of companies seeking to sub optimize based on a local interest. This helps in improving the entire supply chain scenario with better planned overall production and distribution. This not only leads to cost reduction but also quality final product, thus increasing sales to the benefit of all the units involved. Thus the concept of competition between two companies fades and rather it is the betterment of a supply chain.
Thus, the main aim of supply chain management is to enable best utilization of resources like including distribution capacity, inventory and labor to fulfil the needs of the customer. In order to meet its objective of matching demand with supply with the minimal inventory, the SCM includes liaising with suppliers to eliminate bottlenecks; sourcing strategically to strike a balance between lowest material cost and transportation, implementing JIT (Just In Time) techniques to optimize manufacturing flow; maintaining the right mix and location of factories and warehouses to serve customer markets, and using location/allocation, vehicle routing analysis, dynamic programming and, of course, traditional logistics optimization to maximize the efficiency of the distribution side.
Experts from J.P. Morgan offer Supply Chain tips
Business is all about risk and unpredictability. The global trade management experts at J.P. Morgan offer some tips to importers and exporters to prepare better for natural disasters, port strikes, and other factors beyond their control and to decide what emergency planning considerations should be in place to better ensure that a company’s supply chains operate in tough times. Some of the suggestions from these experts include:
In making your initial sourcing and fulfillment decisions, certain risk items should be considered. These include political risks of the country, physical and geographic risks like availability and proximity of primary and alternative logistics networks for all modes, historic weather/natural disasters, labor union action and so on and also economic and market risks like fuel prices, currency exchange and inflation.
Ensure that there is efficient communication throughout the supply chain among the team members who are responsible for the decision making during a crisis.
Keep alternatives open. Use the services of multiple carriers at all times who use different ports of dispatch. Have the ability to diversify transportation. Transportation routes may be disrupted so it is important to have alternate means of transportation.
Keep a track of and constantly monitor each country/region for threats and trends which will impact your supply chain: Weather, port and transportation strikes, fuel prices, currency exchange, inflation, labor rates, pending legislation (i.e., trade sanctions, quotas, anti-dumping duties, Free Trade Programs), political elections that may alter the country’s view of trade.
Keep your supply chain flexible so that it not only has the capacity to keep up with a large increase in demand, but also that the pipeline can be slowed down in case of demand drop to avoid a build up of unnecessary inventory.
Have a solid cross-trained workforce that can react fast. If part of your supply chain is directly affected by the disaster, it is important to have people that can keep the operation running as best as possible.
Keep a backup of all trade-related documentation in electronic format somewhere offsite. If all records are lost in the actual site, they are easily and readily obtained from a different location.
Conduct a risk assessment of your existing supply chain. If you are uncertain as to how your supply chain will hold up in times of trouble, hire outside global trade experts to assess risk and help strengthen your supply chain.
These tips are very helpful in increasing the productivity of supply chains and making them more adaptive to changing times.
KSU’s SCM research gets grant from National Science Foundation
Kansas State University is a comprehensive, research, land-grant institution serving students and the people of Kansas, the nation, and the world. Since its founding in 1863, the university has evolved into a modern institution of higher education, committed to quality programs, and responsive to a rapidly changing world and the aspirations of an increasingly diverse society.
At present, the university is conducting a research project involving supply chain management and the project has been awarded a $225,000 grant from the National Science Foundation. The project is entitled “Collaborative Research on Studies of Multichannel Opaque Service Enterprises.”
George Cai, assistant professor of management, has focused the research on the travel industry when using online retail outlets such as Priceline.com. This research focuses on building mathematical models to help suppliers and retailers determine pricing, channel distribution and revenue management.
A second part of the grant, totaling $225,000, has been given to Cai’s research partner, Xiuli Chao, professor of industrial and operations engineering at the University of Michigan.
The grant is unique and novel in the sense that rarely a college of business administration gets funded by the National Science Foundation.
SCOPE West elaborates on best supply chain practices
SCOPE West, a conference and exposition for senior logistics and supply chain executives focused on supply chain best practices during its two-day event. The event saw presenters from leading manufacturers, retailers, and distributors who spoke about supply chain challenges they had faced and how they overcame them.
Some of the main excerpts from the conference include:
H.J. Heinz Co. has developed a performance management program that links quality control practices like Lean and Six Sigma with best practices in manufacturing, supply chain management, and customer service. The worldwide initiative uses a formal communication methodology that’s customizable for different languages and cultures.
Lennox International, a manufacturer of heating and cooling systems, dealt with highly seasonal demand by using software to analyze the impact of inventory availability on customer service. The company achieved its goal of providing specified service levels at the lowest inventory cost, optimized by SKU for individual service locations.
To encourage continuous improvement, manufacturing conglomerate United Technologies has developed the “Achieving Competitive Excellence” (ACE) program, which certifies and rewards its own business units and its suppliers for excellence in service, supply chain management, and more. The company estimates that ACE adds more than $2 billion annually to its bottom line.
TMW Systems expands its fuel SCM applications
TMW Systems Inc., is one of the largest developer and integrator of customer-driven solutions that help companies in the transportation services while improving profitability and gaining a better return on information. TMW customers include 3PLs and shippers, private and for-hire trucking, brokerage, construction, ready-mix concrete, municipal fleet, heavy-duty repair and waste management operations.
Now, TMW Systems, has announced a growing portfolio of fuel supply chain management applications designed to meet the unique needs of fuel supply chain operations for convenience stores and other retail gasoline and diesel outlets. The fuel supply chain applications from TMW manage more than 11,000 tanker trucks delivering fuel across North America.
TMW Fuel Supply Chain Transport Management System now offers eight powerful modules that can be purchased separately or as an integrated system which will serve the needs of diversified petroleum marketers, convenience store chains, vertically integrated oil companies and fleets dedicated to fuel transport.
“We brought TMW’s enterprise-class asset utilization technologies and their proven efficiencies to this high-touch, high-value service industry with several new applications designed to streamline fuel order management, improve order and replenishment forecasting and optimize driver shift-based scheduling for added productivity,” David Mook, COO and CTO of TMW Systems, said. “We knew that petroleum marketers and jobbers as well as oil companies could really benefit from these smart, cost-effective applications to manage inventory at dozens or even thousands of locations and to efficiently manage company trucks or contracted carriers in fulfilling orders in the very dynamic world of retail fuel supply.”
BuBuGao to deploy Manhattan Associates’ WMS to improve its SC efficiency
Acknowledged as one of China’s top 100 ChainGlobal supply, TBetter Life Commercial Chain Share Co Ltd (BuBuGao) is a leading operator of supermarkets and department stores in China operating more than 100 stores in Hunan and Jiangxi Province and employing over 30,000 staffs. Manhattan Associates(R) excels in providing global supply chain excellence to more than 1,200 customers worldwide that consider supply chain optimization core to their strategic market leadership.
Now Manhattan Associates, Inc. has announced that Hunan-based BuBuGao has chosen Manhattan Associates to improve supply chain efficiency and data integrity through the deployment of Manhattan Associates’ Warehouse Management Solution (WMS).
This solution will be implemented in BuBuGao’s warehouses across the Hunan and Jiangxi Provinces enabling the company to streamline operations, reduce costs and
most importantly ensure data integrity throughout its supply chain. Manhattan Associates will enable BuBuGao to optimize its entire replenishment process by automating time-consuming steps such as order preparation, stock checking and data analysis.
Peng Xiong, IT director of Better Life Commercial Chain Share Co Ltd said, “Data accuracy and integrity is essential and must not be compromised. Manhattan Associates’ system will give us centralized control over our operations and significantly improved data visibility and accuracy. With its complete inventory management capabilities, we will be able to track data on every unit and improve the accuracy of every order we fulfill. In addition, the rock-solid stability and rich functionality of the WMS will enable us to reduce the man-hours and costs associated with distribution planning, improve our retail operations and ultimately increase overall customer satisfaction levels.”
“We provide our customers with proven, value-added distribution management and warehouse optimization technologies that support mission-critical business needs,” said Jeff Baum, Manhattan Associates’ senior vice president, International (Asia Pacific). “With our WMS, BuBuGao will be able to replace its legacy systems with a centralized platform that enables warehouses to share information and allows workflows to be integrated across the company.”
Boeing and Damco sign MOU for development of global SCM tools
Boeing, a unit of the US-based the Boeing Company, and Danish logistics company Damco, part of the A.P. Moller - Maersk Group, have joined hands for the development of industrial and technological logistics tools to assist global supply chain management.
The two companies have signed a Memorandum of Understanding and have released a joint statement saying that this MOU will help them improve efficiency and effectiveness in the multi-billion dollar supply chain optimisation market.
The statement said, “The two companies will explore opportunities to use the Boeing-developed Joint Logistics Command and Control Environment (JLC2E) modelling and simulation tool to expand into commercial markets and incorporate Damco’s expertise in supply chain management.”
It was also explained in the statement that Boeing’s state-of-the-art JLC2E tool allowed defence customers to “experiment and evaluate supply chain tactics, processes and technologies to support current and future complex defence missions”. Also that Damco could benefit from Boeing’s status as the largest exporter in the US through future freight forwarding opportunities as Boeing had shipped more than $350m in aerospace goods and services globally in 2008.
Why do supply chains collapse?
With the world becoming a global village day by day, the supply chain serving international economies are becoming increasingly interlinked and interwoven with the effect that if one link is severed, then it causes a collapse of the entire chain. The causes for the collapse of the supply chain are many. Some of them cam be listed down as:
With the cut down in consumer spendings, the supply chains suffer due to deprivation of global economies of credit financing. Financial services industry continues to be impacted by the global economic crisis — impacting all aspects and areas of the business and supply management.
Another factor which can lead to the collapse of a supply chain is when a particular supplier decides to go out of business when it cannot weather the storm. Loss of key vendors in the supply chain disrupts the entire chain.
Geopolitical situations like collapse of a government, change in government policies or may be an attack by a terrorist organization to a major seaport, all could lead to the collapse of a supply chain.
If damage is caused to product reputation or a brand connected to a global supply chain, due to unlawful business practices (such as child labor, or poor labor and environmental practices) can lead to the disruption of a supply chain.
Natural disasters like a hurricane or earthquake can have a destabilizing impact on a manufacturer’s ability to procure vital raw materials and meet customer orders. This can lead to a collapse of a supply chain.
Collapse of supply chains can be prevented by taking steps such as quality control, reviewing current practices and identifying areas of potential exposure to risk, adhering to safety stocks of finished goods to minimize the impact of demand variability, managing available capacity within the manufacturing location, and the ability to standardize operations in any location where a manufacturing organization is sourcing the same parts from the same vendor or multiple vendors.