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. "

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."