Jun 242017
 
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Supply Chain Optimization

Supply Chain Optimization is key in making a supply chain organization more efficient and productive.  A company can use technology for optimization but don’t forget to improve processes as well.  Using technology to optimize processes may take awhile and will cost a significant amount of money.  Be sure to first look into ways to improve the current process by taking out wasted steps.  Also look into the process discipline of the organization so the information going into your supply chain system can be fully utilized for your supply chain optimization projects.

supply chain continuous improvement

Supply Chain Optimization Quotes

  • “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” ~ Bill Gates, founder and former CEO of Microsoft
  • “In many cases, jobs that used to be done by people are going to be able to be done through automation. I don’t have an answer to that. That’s one of the more perplexing problems of society.” ~ John Sculley, former CEO of Apple Computers
  • “For the blue-collar worker, the driving force behind change was factory automation using programmable machine tools. For the office worker, it’s office automation using computer technology: enterprise-resource-planning systems, groupware, intranets, extranets, expert systems, the Web, and e-commerce.” ~ Tom Peters
  • “SpaceX is only 12 years old now. Between now and 2040, the company’s lifespan will have tripled. If we have linear improvement in technology, as opposed to logarithmic, then we should have a significant base on Mars, perhaps with thousands or tens of thousands of people.” ~ Elon Musk
  • “The human being is a very poorly designed machine tool. The human being excels in coordination. He excels in relating perception to action. He works best if the entire human being, muscles, senses, and mind, is engaged in the work.”
    ~ Peter F. Drucker
  • “Excellent firms don’t believe in excellence – only in constant improvement and constant change.” ~ Tom Peters
  • “In Japan, a company worker’s position is secure. He is retrained for another job if his present job is eliminated by productivity improvement. W. Edwards Deming
  • “I have a great respect for incremental improvement, and I’ve done that sort of thing in my life, but I’ve always been attracted to the more revolutionary changes. I don’t know why. Because they’re harder. They’re much more stressful emotionally. And you usually go through a period where everybody tells you that you’ve completely failed.” ~ Steve Jobs, co-founder and former CEO of Apple Computers
  • “There might be new technology, but technological progress itself was nothing new – and over the years it had not destroyed jobs, but created them.”  ~ Margaret Thatcher
  • “Automation provides us with wondrous increases of production and information, but does it tell us what to do with the men the machines displace? Modern industry gives us the capacity for unparalleled wealth – but where is our capacity to make that wealth meaningful to the poor of every nation?”  ~ Robert Kennedy
  • “Computers are magnificent tools for the realization of our dreams, but no machine can replace the human spark of spirit, compassion, love, and understanding.”  ~ Louis Gerstner, fromer CEO of IBM

supply chain optimization

supply chain

supply chain optimization

supply chain optimization

Jun 072017
 
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Inventory Management

Inventory Carrying Costs associated with carrying inventory include:

  • Interest on Capital Costs – this is the largest component of carrying cost and is associated with money tied up.
  • Taxes & Insurance – insurance and taxes has to be paid on the current inventory.
  • Obsolescence & Depreciation – inventory obsolescence is a major issue with products with a short shelf life or lose value over time (computer products).  Companies involved with products that become obsolete quickly should be focusing on decreasing cycle times.
  • Storage – the cost associated with having a facility to hold the inventory.
  • Opportunity Cost – what could the capital be used for that is tied up in inventory.

Costs of running out of inventory:

  • Loss of customer/sale
  • Bad reputation
  • Disruption in supply chain

INVENTORY CARRYING/HOLDING COST

Carrying Cost = (Price per unit * Carrying cost percentage * Order Quantity in Units)/2

AVERAGE INVENTORY

Average Inventory = EOQ/2 + safety stock

ECONOMIC ORDER QUANTITY

  • Demand is known and is constant

  • No quantity discounts

REORDER POINT

Reorder point = Estimated Demand * Lead Time

Inventory Management Training.

Inventory Management

Apr 212017
 
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What Is Inventory Management?

Here are the basics to inventory management.  Visit this LinkedIn discussion for further inventory conversation.

Supply Chain and Leadership Information.

inventory management

 

Mar 282017
 
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Toyota Production System

Supply Chain Information.

“Standards should not be forced down from above but rather set by the production workers themselves.”  ~ Taiichi Ohno, father of Toyota Production System (TPS)

Toyota Production System TPS Taiichi ohno quote

“Having no problems is the biggest problem of all.”

Toyota Production System Taiicho ohno problem quote

 

  • “If you are going to do TPS you must do it all the way.  You also need to change the way you think.  You need to change how you look at things.”  ~ Taiichi Ohno
  • “When you are out observing on the gemba, do something to help them. If you do, people will come to expect that you can help them and will look forward to seeing you again on the gemba.” ~ Taiichi Ohno
  • “I’m proud to be Japanese and I wanted my country to succeed. I believed my system was a way that could help us become a modern industrial nation. That is why I had no problem with sharing it with other Japanese companies, even my biggest competitors.” ~ Taiichi Ohno
Oct 092016
 
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Best Supply Chain Companies

Here are a few of the best supply chain companies to research: Amazon, Apple, Toyota and Walmart.

Amazon has done some amazing things with its supply chain.  Now that Walmart is trying to catch Amazon in the ecommerce world you know Amazon has arrived.  Do a search on Kiva Robots or Amazon Robotics and you will find a large assortment of information on ways Amazon has automated their supply chain.  Also research Jeff Bezos who is the founder and CEO of Amazon.  Target recently hired a supply chain executive from Amazon to lead their entire supply chain organization.  Below are some links to information regarding Amazon.

Best Supply Chain Companies

The Apple Supply Chain is known to be one of the best, if not the best supply chain in the world.  Steve Jobs hired Tim Cook in 1998 to revamp the Apple Supply Chain.  Now Tim Cook is the CEO of Apple.  Jeff Williams led the Apple Supply Chain and is now the COO of Apple.  Apple puts major emphasize on its supply chain.

Best Supply Chain companies Apple

The Toyota Supply Chain is very well documented.  I believe Toyota is one of the best supply chain companies to research because there is so much information out there about Toyota and the Toyota Production System (TPS).  The Toyota Production System (TPS) is what has helped Toyota become synonymous with quality.  Taiichi Ohno is the father of the Toyota Production system so he is a very good person to research.  If you search the Toyota Production System a huge assortment of information will come up.

best supply chain companies

The Walmart Supply Chain and been innovating since Walmart began.  Starting in small towns Sam Walton had to figure out the best ways to get product to the stores and this helped him develop the amazing Walmart Supply Chain.  Do research on ways Walmart and P&G started sharing information in the 1980s making the supply chain so much more efficient.  There is a great deal of information on the Walmart Supply Chain and different ways Sam Walton continuously improved Walmart.  Walmart is definitely one of the best supply chain companies.

Best Supply Chain Companies Walmart

 

 

 

 

May 112016
 
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Toyota Supply Chain

Toyota Supply Chain is one of the best in the world. Toyota has long been benchmarked for their supply chain. Great video.

Toyota and Quality Quotes:

  • “Make your workplace into showcase that can be understood by everyone at a glance. In terms of quality, it means to make the defects immediately apparent. In terms of quantity, it means that progress or delay, measured against the plan, and is made immediately apparent. When this is done, problems can be discovered immediately, and everyone can initiate improvement plans.”   ~ Taiichi Ohno
  • “For much of Toyota’s history, we have ensured the quality and reliability of our vehicles by placing a device called an andon cord on every production line – and empowering any team member to halt production if there’s an assembly problem. Only when the problem is resolved does the line begin to move again.”  ~ Akio Toyoda
  • “When consumers purchase a Toyota, they are not simply purchasing a car, truck or van. They are placing their trust in our company.”  ~ Akio Toyoda
  • “The key to the Toyota Way and what makes Toyota stand out is not any of the individual elements…But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner, not in spurts.”  ~ Taiichi Ohno
  • “We have to grasp not only the Know-How but also ‘Know Why’, if we want to master the Toyota Production System.”  ~ Shigeo Shingo
  • “Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.”  ~ W. Edwards Deming

Supply Chain and Leadership Information.

 

Apr 032016
 
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Model T, the Assembly Line and Henry Ford

The Model T is one of the results of a major supply chain innovation by Henry Ford – the assembly line.

Henry Ford Quotes

  • “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.” ~ Henry Ford
  • “Whether you think you can, or you think you can’t–you’re right.” ~ Henry Ford
  • “If I had asked them what they had wanted, they would have said a faster horse.” ~ Henry Ford
  • “The best we can do is size up the chances, calculate the risks involved, estimate our ability to deal with them, and then make our plans with confidence.”  ~ Henry Ford
  • “Coming together is a beginning. Keeping together is progress. Working together is success.”  ~ Henry Ford
  • “There is one rule for the industrialist and that is: make the best quality goods possible at the lowest cost possible, paying the highest wages possible.” ~ Henry Ford
  • “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.” ~ Henry ford
  • “When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.”  ~ Henry Ford
  • “Life is a series of experiences, each of which makes us bigger, even though it is hard to realize this. For the world was built to develop character, and we must learn that the setbacks and grieves which we endure help us in our marching onward.”  ~ Henry Ford
  • “Most people spend more time and energy going around problems than in trying to solve them.” ~ Henry Ford
  • “Enthusiasm is the yeast that makes your hopes shine to the stars. Enthusiasm is the sparkle in your eyes, the swing in your gait. The grip of your hand, the irresistible surge of will and energy to execute your ideas.”  ~ Henry Ford

Supply Chain Assembly Line

 

Inventory quote