Logistics Asset LC management

[Source: http://www.myrf-tag.com/logistics.html]

"Most companies have opportunities to improve the full lifecycle management of their logistics assets, such as hardware and software systems.

That was the massage, in part, from Wayne Carlston, Director of Supply Chain Systems Development for OC Tanner, one of the leading providers of employee recognition programs, who says that too often logistics managers don’t put enough thought into how to best maximize long-term performance of those assets after they have been purchased and initially deployed.

“Buying and owning are two very different things,” Carlston said in a presentation this week at the Material Handling and Logistics Conference in Park City, UT, an annual event sponsored by HK Systems.

Carlston offered recommendations along both the “buying” and “owning” dimensions.

For example, he noted that OC Tanner recently considered purchase of a new Warehouse Management System. As with all such projects, the company used a multi-step approach to getting the new initiative right, called STEPS, that it has developed internally on lean supply chain thinking. Carlston said the approach can be used when evaluating supply chain software or materials handling systems.

The five phases of OC Tanner’s STEPS approach are:
See
Think
Experience
Prove
Sustain
Using the STEPS approach, OC Tanner took several actions in the WMS project that are not common among companies looking for such technology. For example, during the “See” and “Think” phases, the company first educated a team of 12 managers and associates on general WMS capabilities, and challenged that team to identify how those tools could bring real benefits to OC Tanner’s distribution operations before they started discussions with specific vendors. "

Tips to improve vendor relationships

[Source: www.nffs.org/] "Move Your Supplier Relationship Beyond the Transactional

These days, suppliers are eager to work with you to solve complex problems, such as trimming costs and achieving excellence benchmarks in lean-and-green development and delivery. Why not challenge each other to think beyond conventional solutions and methods? Even supplier relationships that are purely price-based contain untapped knowledge.

Streamline Decision Making

Invest in maintaining the right contact information in your supplier information management system. After all, updated and accurate data is critical for the rapid communication flow that feeds innovation.

Systemize the Relationship

Establish a 360-degree information system and mitigation/corrective action plan to ensure relationship survival beyond current assigned teams. Include agreed-upon key performance indicators, risk monitoring, and protocols for open communication and transparency.

Innovate, Don't Formulate

Don’t just copy Wal-Mart, Toyota, and Dell. Your situation is unique. Analyze it, and identify areas for improvement. A formulaic approach to supplier restructuring might mean reducing total number of suppliers by 20%

Pick Up the Phone

We are always surprised at how few companies talk to their suppliers on a regular basis. Site visits are optimal, of course. But, in today’s economy, everyone is cutting back on those. So, it’s even more important to check in with your suppliers personally, even by phone. Personal relationships are fundamental to collaborative supplier relationships."

How WMS helps reduce Retail out-of-stocks?

[Source: www.logismarket.co.uk]

"Could we not largely solve the out-of-stock problem by leveraging these under-utilized devices and adding a type of task management system, maybe morphed from a WMS, to direct workers to get product on the shelves?

What it would take is:

• A perpetual inventory (PI) system at the store level (largely in place);
• A basic inventory location system in the back room (sometimes in place);
• Wireless terminals (largely in place); and
• The task management engine, integrated with the other pieces (or maybe all from one source).

Retailer Target said early on in the RFID saga that it has a light form of this – its system generates a type of “pick list” for shelf replenishment, based on POS. But that is a paper-based system, and not really capable of dealing at a specific task level (or so I think – haven’t really seen it).

Pretty simple – the PI says a location needs replenished (at whatever level is set for that SKU), and a specific task is set for the move. It goes into the queue, and is prioritized based on other variables (just for example, perhaps high-margin items generally go to the top of the queue); if more units of that SKU are sold, meaning it is increasingly in danger of going to zero at the shelf, the task rises in the queue.

Stock personnel don’t have to wonder what to do – their terminal tells them exactly what to do, and they confirm it is done electronically. By the way, they could be asked to do a cycle count when they do the shelf replenishment. If they see an empty shelf or peg, they could also do a cycle count, and/or check to see if a replenishment is on the way."

Warehouse Control Systems

"A Warehouse Control System (WCS) is a piece of software that that sits between the Warehouse Management System (WMS) and the lower level equipment controls of a distribution center materials handling automation system, such as a high-speed sortation system.

For example, the WCS likely will monitor at a detailed level all the sensory inputs, and directs the conveyors to start, stop, merge and all the myriad other activities needed to make the conveyors operate. (See graphic below.)

That’s easy to say at a high level, but the scope of the WCS can range from performing very basic “middleware” functionality, in which it primarily serves as an information bridge between the WMS to the conveyor controls, to being a sophisticated software solution that, as a category, is increasingly encroaching on traditional WMS territory."

Walmart.com = Amazon.com ?

[Source: www.retailwire.com]

"It used to be wondered aloud if Amazon.com would someday become the Wal-Mart of the internet. While it has become very successful, it's hard to argue that Amazon has achieved the same level of dominance in e-tailing as Wal-Mart has in the world of brick and mortar stores. To further complicate matters, it now appears that walmart.com wants very much to be the Wal-Mart of the internet and has launched a new service that encroaches on territory that Amazon has occupied until now.

Walmart Marketplace offers items from other sellers for purchase through walmart.com. The items sold through the site, a la Amazon, are shipped by partner merchants who also handle returns. It allows walmart.com to expand its offerings and generate revenue without significantly adding to its cost structure.

While Amazon and eBay are notable for expanding product offerings through partner merchants, they are not alone. Sears.com, for example, sells auto parts from the Whitney Auto Group through its site. Overstock and Buy.com also offer third-party services."

Maximizing distribution efficiency

[Source: www.sterlingtrucks.com]

• "Remember the basics: Before you try to more advanced techniques and technologies, make sure you have the basic stuff right, such as warehouse layout, product flow, building the right culture among staff, etc.
  
• Automate: With a wide array of automation choices logistics managers need to constantly keep in touch and abreast of technologies and their potential. “If you're not using a type of automation, you should have a good understanding of the technology and a compelling explanation for why you aren't using it.”
  
• Analyze: Err on the side of too many metrics, not too few, using the information to help you make better decisions. “How much does it cost to touch a product? How do individual workers stack up to each other for productivity? What percentage of your shipments does your biggest customer represent? What percentage of expenses does freight represent? How closely does your organization follow the Pareto Rule (20% of the SKU's represent 80% of the velocity)? How long has it been since you had orders for your least active SKUs? What is your carrying cost?”
  
• Remember your employees: Don’t lose track of your people while worrying about technology, strategy and results. “For the most part they want to do well, and will respond positively to training, feedback and encouragement.” Simple incentives can work wonders.
  
• Benchmark: All the data in the world about your own operation isn’t worth much if you don’t know how that compares to others and what is possible. A variety of approaches to benchmarking exist.
  
• Seek outside opinions: Too many logistics managers and executives are reluctant to get opinions and counsel from others outside their operations, often believing their processes are somehow too unique for others to offer much help. Rubbish. “The most effective distribution executives are not necessarily one person with an individual wealth of knowledge and experience, but are almost always great facilitators of multiple sources of knowledge who can "borrow" and apply the best ideas without feeling intimidated or threatened. Accept the fact that today's distribution centers require so much specialized knowledge that no one person will ever be the definitive expert on every process that goes on within the four walls.”
  
• Communicate: In addition to communicating with your team, ensure you communicate consistently and effectively with your peers in sales, finance and other areas within the company and your customers. It pays off in many ways, especially when the inevitable trouble strikes."

Green supply chain strategies = underground DCs?

Source: www.thegreensupplychain.com

"Underground distribution centers have been around for some time, but, in general, have been used primarily for storage, such as archived documents, rather than distribution, which required more intensive logistics operations.

Seems as if that is starting to change, a trend that may accelerate as the Green Supply Chain benefits of moving to “underground” start to impact supply chain decisions.

The facility was “designed with energy efficiency and sustainability in mind,” the company said at the time.
In general, underground DC space does not come from natural caves, which are usually not physically well suited to development and have issues with water and dampness. Instead, these facilities are developed from abandoned mines or quarries that once produced limestone or salt.

The natural temperature of these underground spaces is generally in the 60-65 degree range year round, with low humidity. As a result, energy costs for these facilities are much lower than a standard above-ground DC. For example, Kraft estimates that the electricity costs for its underground facility, which is a refrigerated space kept at 36 degrees, is 65% lower than a comparable above-ground building. In addition to the energy savings, there would be a corresponding reduction in associated CO2 emissions.

Unlike real caves, these facilities are also “bat free.”

Space is often developed specifically to meet a given shipper’s needs, but, in some cases, DC space is immediately available, either as a result of an existing client leaving or, in some cases, developed “on spec.”
The developers obviously need to work with local water and sewage authorities to make sure those services are provided to meet individual client requirements.

In addition to the energy savings and carbon emissions reduction, underground DC developers say that the space itself can often be leased at a discount per square foot as much as 35% versus above-ground space (though more space may be required, as ceiling heights, in general, are more limited than above-ground buildings). These also cite productivity benefits as operators work in a more comfortable environment, dramatically reduced risk of damage from tornadoes or other storms, little or no external maintenance costs, and significantly reduced issues with building security and theft.

It won’t be for everyone, and most areas don’t have such developments nearby, but we expect more companies to look at these underground facilities, especially under a cap-and-trade regime for carbon emissions."