Study examines supply chain management tactics for the new era

Supply chain management-more than just faster-to-be-cheaper

Managing a supply chain is key to the survival of all businesses large and small. The bigger the business, the more critical it gets because profit margins depend on fast turnaround without damage or flaws. Success depends on many factors-it isn’t enough to just go faster and pay bottom dollar to material handlers-that business model can’t offer what a competitive material handler needs to succeed.

A new study promises to give us the answers we need for better supply chain management

Maersk shipping containers
Photo courtesy Wikimedia Commons (In the public domain)

Among the most-respected organizations of supply chain management tactics and systems is APICS. APICS is a non-profit with five decades of proven experience. The organization announced last fall that it will found a new study in cooperation with Michigan State University which will take an in-depth look into popular practices in supply chain management today.

The APICS study will not only look at the management tactics within a business, but will also closely examine the complex relationships between different businesses who serve as each link within the supply chain by which all such businesses are linked. The initial results of the cooperative study, which commenced in fall, 2013, are due to be published this year. The entire study will be completed over a period of two years and is expected to be completed in fall of 2015.

Penny-wise and dollar foolish-the difference needs to be known

Anything that slows a supply chain is seen as a weak link in that save chain, but things need to be analyzed so you can see their role in the big picture. For example, let’s say you opt to make product ahead of schedule and store it in bins instead if live loading.

On the surface, the idea sounds like it won’t be beneficial. Why store stuff only to have to move it again in order to load it onto trucks? It seems wiser to just make the stuff and move it once-in short, live load it off of the production line right into trucks-a move that is penny-wise; but there’s more to consider.

Panama Canal expansion
Panamax Container Ship (Photo courtesy Williamborg via Wikimedia Commons)

What if a different product is needed in couple of days and you have a holiday coming up? You have none of the different product that planning wants and you have a holiday-some people are out, others have worked their full 40 hours to cover for those who are out and you’re out of options.

Suddenly, you have to pay overtime to make what is immediately needed. Had you stored up some product when you had some slow time where not many trucks were waiting then no one would be waiting now. You wouldn’t be scrambling, spending extra for labor and losing time for on-the-fly changeovers in order to meet you unforeseen production requirements. You may have saved a few pennies in live loading before, and now you’re spending dollars to fix the problem you could have prevented. This is just one of many possible examples that represent real scenarios that can create a sluggish supply chain.

 

Sources:

Michigan State University

New Research Initiative to Redefine the Future of Global Supply Chain Management

APICS Foundation

https://www.apics.org/about/overview/apics-supply-chain-council