|
|
Recent Articles |
SCM Savings: People, Process, And Productivity
Okay, yes, I know...this is going to sound like a broken record...You don't need the latest ERP package or other SCM software to improve your distribution center operations. True, technology plays its part as an enabler; however, the majority of the savings...
Fiscal Visibility in Supply Chain = Money Saved
The globalization of commerce has made sophisticated logistics
technology not just a luxurious expense for the Global Fortune 500, but a necessity for companies of all sizes and in all industries.
Logistics Costs and Bean Counting Don't Add Up!
Does you company actually have true fiscal visibility
throughout the supply chain? Many claim they do...very few really do...what should you do? Supply chain management (SCM) is one of the key drivers in today's business world with offshore sourcing...
Supply Chain Integration Solutions
Let's take a quick look and analyze your position in the Supply Chain. You are either the one driving the truck, the one pumping the gas, or the one paying the other two. It does not matter if you are a vendor, supplier, manufacturer, dealer, service supplier or customer...
SCM & Distribution Guide
Supply Chain Management is a decisive element of good overall business management. To ensure profits, customer satisfaction, repeated sales and future growth a company needs to have an efficient supply chain management for any type of sales.
Creating Supply Chain Value W/ Cycle Time & Inventory
A supply chain is not a series of links forged together for a common purpose. That is a nice image. However it minimizes the reality of the chain and how each link in that chain must design its own logistics process...
Accurate Data And Inventory Management Systems
Inventory management systems are required to automate and efficiently keep track of your inventory levels. If your inventory levels are not properly tracked, it will result in rising costs. Accurate inventory is one of the most important aspects of inventory management. Three points must be recognized. First, lean requires a strategy.
|
 |
|
12.08.06
Intelligent Logistics Or Just Good Old Common Sense?
 By
Michael Stolarczyk
What does the word 'Intelligent' suggest when used in conjunction with Logistics? It connotes "smart," foresight-driven, sensory, responsive, and adaptive Logistics.
How can one equip Logistics to have foresight, be able to sense changes, respond to those changes and be adaptive to changes in the environment? These are hot topics in the Supply chain and Logistics world today. This article does not profess to address all components of creating 'Intelligent Logistics'. However, it provides an introduction to the logisticians of the current thoughts and trends in the arena and opens avenues for enthusiasts to explore further.
The Four Pillars of Intelligent Logistics
Embedding "intelligence" into Logistics processes and systems involve building four robust pillars of Integrated planning and execution, Visibility, Collaboration and Analytics.
Intelligence in Planning and Execution
The foresight and responsiveness are essentials at all levels of the logistics - strategic planning, tactical planning, operational planning as well as execution. It is equally important to build strong linkages between planning and execution processes and systems to embed "smartness" into Logistics.
The strategic planning addresses such issues as network design in terms of plant, warehouse, partner facility locations and capacity planning based on the customer demand, supplier positions, transportation and other fulfillment costs. The periodicity may range from six months to five years. By its very name, strategic planning is supposed to be intelligent. However, in reality most strategic planning exercises neither embed foresight, nor create responsive networks. In the dynamic world of constantly escalating oil-prices (and hence fuel and transportation costs) and increasing demand-side and supply-side pressures, network planning needs to be almost continual; and create an adaptive network that can quickly respond to market changes.
Tactical planning addresses how best to use the existing facilities and assets for optimal customer service at least cost. It also includes 'what-if' sensitivity analysis and simulation techniques to sense the effects of delta changes in demand, supply, or network and helps respond better to changes.
Operational planning generates realistic inventory and shipment plans either based on constrained-optimization or heuristics. Historically, most operational planning engines have been batch-oriented. Then the transactional systems execute the plans generated by the batch engines. However, in the real world, orders keep changing, carriers reject tenders, inventory is not found in the warehouse due to discrepancies, or equipment breaks down on the road and so on. The uncertainties in the Logistics network are increasing both on the demand side and the supply side. On the demand side, orders would change more dynamically based on the real customer demand. On the supply side, Logistics networks are also lengthening with global supply chains.
A key ingredient of "smart" Logistics is to have a tightly integrated planning and execution. Batch-oriented optimization and transaction-oriented execution must be give way to 'real-time optimization' and 'responsive execution' with a closed loop feedback linking planning and execution.
Visibility
Visibility refers to true understanding of the customer demand, real-time track and trace of inventory at item level, and track and trace of shipments as well as alerting when events deviate from expectations. This visibility into orders (demand), inventory and shipments (supply) help sense the changes in demand and supply in near real-time and respond quickly to these changes. This will help reduce safety stocks and hence costs, improve customer service and make the Logistics network more adaptive. They will also help execute such best practices as cross-docking, in transit inventory merging, and delayed allocation strategies.
Click here to resume reading this article.
About the Author:
Michael Stolarczyk is currently Senior Director, of Business Development for Exel in their Westerville, Ohio General Office for the Americas. He is also on the Board of Advisors for West Virginia University’s School of Business.
Michael's Blog: http://blogonlog.blogspot.com
|
