Showing posts with label efficiency. Show all posts
Showing posts with label efficiency. Show all posts

Thursday, August 27, 2009

Packaging Optimization in Supply Chain Management

Have we ever wondered if products from different companies had the same packaging, what else can help us decide on the purchase beside the quality of the product itself?
Packaging has never been so determining as a factor into the consumer's purchasing decision. The more the company invests in packaging, the higher the price will increase as it is considered part of the main costs.
"It started with soaring fuel and transportation costs a few years ago, as companies realized that “over packaging” and packaging redesigns offered significant opportunities to reduce the dimensions of products for shipping – allowing companies to ship more products in the same carton, pallet or trailer. That directly lowered transportation costs.
Then, even as transportation costs moderated, Green Supply Chain considerations started to rise, where packaging again is seen as playing a critical role, both in reducing waste and eliminating energy use – and with that also reducing transportation expense."

Below is an example from a telecommunication industry company
http://www.scdigest.com/images/ADALIS_PALLET.jpg

"By reducing the size of the unit packaging by just 1.5 inches in one dimension, while modestly increasing its strength, the manufacturing was able to get rid of the masterpack cartons, and dramatically impact pallet efficiency."

Monday, August 17, 2009

Inefficiency in warehouses

http://www.insight-holdings.com/images/warehouse2.jpg
[ Source: http://www.insight-holdings.com ]

We all know everything costs. To have a warehouse up and running, there are several cost factors already have to be taken into account. Waste is the enemy of efficiency. However, in reality, inefficiency does happen.
Below is an example from Cliff Holste is Supply Chain Digest's Material Handling Editor.

"I watched an operator struggling to fit too many cartons into a lane of flow racks in the replenishment picking area. After several minutes, he wound up putting some on the floor, and then said he would come back to do the rest when there was space in the lane again. And I thought, yes, if someone doesn't move them into a black hole first. With a little luck, he’ll return just in time to complete the replenishment operation before the picker runs out of inventory and creates a short on a customer order.

Another observation – shortly after a major sales campaign or season, it is not uncommon to find a large number of highly qualified employees busy with handling returned goods. This is generally a tedious and time-consuming process. One has to wonder why so much of this product, which is carefully inspected, refurbished and repackaged, sits for so long on the shelf, and then is often sold-off at reduced prices, or even worse, scrapped.

Employees ask, "Why didn't we know this sooner?" Actually, someone probably did have the right information available to know this when the return was authorized, but their focus was on credit and salvage, not on the probable ultimate disposition of the merchandise. In my experience, returns often add excess inventory to a dying product.

The employees know that these are wasteful processes, but the “system” keeps asking them to do it time after time.

Supervisors and management, too, know that this happens repeatedly. They listen, but don't really hear, or act. Or, so it appears to the people.

What happens when management does nothing? Employees get frustrated. They don't think that it's important to do the job right the first time, because they are going to have to do it again, anyway. They lose confidence in their direct supervisors and begin to wonder about how smart management is really. Ultimately, that can lead the best to look around for more satisfying work."

His final thought on the decrease of skill workers and being more responsible on the floor.
One of the ways to drive efficiency in any operation is to consistent communication. As people always say, prevention is better than cure. If we communicate often, we can figure out the problem and plan to solve it in a timely manner.