Tuesday, January 27, 2009

Profit comes from Effective Supply Chain Management

By Larry Emsweller

If you lag behind in technology, you are putting your efficiency at risk. Supply chain management is simple if you are shipping one thing at a time, but when shipping multiple SKU orders, they need to be directed to the proper shipping point. A competent software management tool can maximize your direct plant shipping opportunities. It can save you time and efficiencies that will save you money.

Old software would not allow anything but a complete order to be shipped. Sending out an incomplete order became a very difficult task. Too difficult for most companies, so they give up, which inhibits their ability to make up current market share. Introduce AutoScheduler - sophisticated software - which solves these problems and makes handling incomplete orders (to difficult to handle) easier and allows you more options.

But KISS is high cost. On local campuses consisting of a plant and several warehouses, companies like Procter & Gamble have realized there is a better way. In their extensive supply chain management program, P & G uses a distribution master scheduling system called AutoScheduler from Transportation l Warehouse Optimization to optimize their direct plant shipping by:

A. Maximizing DPS by pre-positioning inventory; B. Identify the best place to ship from; C. Ensure the shipment is complete by re-deploying the inventory; D. Define the customer service goal of on-time, every-time and establish the dock and staff schedule to make sure this happens

Supply chain management is in a constant state of analysis. You are continuously checking and re-checking. That is why most developers prefer the KISS principle. Simply, it is easier. But KISS does not always save you time and money that a more sophisticated software product will.

Most tools that exist "over the counter" are for catalog shippers. Those that tackle the more substantial issues of ship point optimization in companies shipping truckloads of consumer-packaged goods, have been custom built. There is an exception - AutoSPA (Automatic Ship Point Assignment). This is also available from Transportation l Warehouse Optimization. AutoSPA is a timely, capacity-balanced optimization tool that performs the right sourcing analysis to determine where the order should ship from and looks at the total cost of delivery.

At the same time, AutoSPA can limit the number of shipments that can be made from any site. For example, if there are 200 shipments to be made in the South East, there is no sense in overbooking the Miami DC when Atlanta is idle. Rather, Miami should work to its capacity leaving some volume for Atlanta.

The savings from scheduling software and ship-point assignment are significant. In most cases, you can cut total supply chain management costs by nearly twice as much as DPS alone - so it is worth doing. It forms the basis of effective supply chain management.

Sign up for the exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for truck operators at www.TransportationOptimization.com. While there, request a call back from one of the premier transportation consultants in the industry, Tom Moore or one of his associates from Transportation | Warehouse Optimization. Working for many companies in the top Fortune 50 - like Procter & Gamble and BP - they understand your unique problems and can help you solve them. Transportation l Warehouse Optimization - Solutions that work. Solutions that save. - 15485

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