Logistics Management announced American Identity as the winner of Logistics Best Practices (Gold Winner)
Here’s what they accomplished:
Logistics Best Practice: Helped clients cut expedited freight usage by 50 percent and reduced shipping-related complaints by 92 percent with the help of its proprietary freight-quoting module. Used a similar module internally to improve inbound routing decisions. Overall, the new system knocked out more than $500,000 in accessorial fees.
Says Bruce Tompkins in …Lean Thinking for the Supply Chain
A lean supply chain is one that produces just what and how much is needed, when it is needed, and where it is needed.
That’s brevity for you that masks the utter transformation that an entire firm – its supply chain, manufacturing, personnel, accounting, finance, sales and management, have to go through in order to be lean. And that’s the destination – being lean.
There are two conceptual definitions in Lean thinking – Value and Waste.
What is Value?
Value, in the context of lean, is defined as something that the customer is willing to pay for. Value-adding activities transform materials and information into something a customer wants. Non-value-adding activities consume resources and do not directly contribute to the end result desired by the customer.
I’ve always been suspicious of “Best Practices” but that probably is because of my background in R&D and the irrelevant pride that often goes with – the NIH (Not Invented Here) syndrome. Atleast, I recognize it in myself. However, “Best Practices” is the “lazy” approach to execution in the Supply Chain space as opposed to the “hard” approach which is to knock yourself against the immutable laws of business success, fail and try again until you get it right. Sure, you save money and time using the “lazy” or well-trodden and tested path but the trade-off is in learning especially organizational learning in the supply chain space.
I’ve got to make a confession here too – I’ve got a soft corner for gaining competitive advantage through supply chain design and execution which is why I’ve a preference for the latter “hard” approach of doing things. Adopting the “Best Practices” approach implies that you’re adopting what works and your competitive advantage w.r.t to others in the industry is marginal at best. Ofcourse, there is nothing that stops the firm from adopting cross-industry best practices or innovating up from the best practices floor that is adopted.
With regards to best practises in Supply chain execution, here are some pointers from the consultants at Tompkins Associates. Here are the 7 best practices for supply chain execution implementation:
1. Realistic objectives and expectations – Defining business requirements
2. Right Systems – Meeting business objectives
3. Right Team
4. Right Processes
5. Right Plan
6. Right Training
7. Right Timing and Support – Minimizing impact to customers
Says Patricia E. Moody in the May 1, 2006 edition of Supply Chain Management Review (…)
Technology may not necessarily be the be-all and end-all. But in the supply management space, it’s certainly the quickest and most direct route to cutting costs and improving profitability. The companies profiled here show how – with the right people and processes in place, technology can deliver stunning performance results.Technology may not necessarily be the be-all and end-all. But in the supply management space, its certainly the quickest and most direct route to cutting costs and improving profitability. The companies profiled here show howwith the right people and processes in place, technology can deliver stunning performance results.
Reading on in the article, she outlines the following in three companies
1. Hewlett-Packard
E-sourcing – A new buzzword for what was always the aim of upstream (or downstream if you were a supplier) supply chain collaboration with a bit of bidding/auctions thrown in. But think about this for a minute, what might the unintended consequence of this mode of supplier collaboration be? As users of this mode of procurement adopt this technology, all that it involves is poring over competitive bids of the “widget” being delivered – wouldn’t a computer be able to do this as well, faster and more efficiently if there are a number of competing “widget” characteristics. A supplier relationship might be transformed from a people based process to a people-computer process.
Procurement risk management – This is one of the innovations (incidentally, also won an award ) that makes working in supply chain management exciting. As the article elaborates:
The software helps HP tackle uncertainty in demand, supply, price, and material costs. It quantifies the risk and the likelihood of certain changes and allows the company to manage risk over a longer time horizon.
There is no one reason why I wanted to set up this blog. Actually, there are several reasons. I made the jump from R&D into Supply Chain Management about 4 years ago. I’d like to think that blogging is one way to expand my thinking on Supply Chain Management.
So here it is!!
