Jun 272017
 
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Uber Freight Officially Launches (What it Means for Truckers)

Uber Freight will most likely be a game changer for the trucking industry.  Could Uber freight be to the trucking industry what Amazon was to the retail industry?  For discussion on Uber Freight please visit our LinkedIn post or our Facebook discussion.

Uber Freight Information.

Digital Supply Chain Quotes

  • “The digital supply chain has the potential to completely change supply chain. However, do your due diligence before rushing in.” ~EverythingSupplyChain.com.
  • “I have more respect for the fellow with a single idea who gets there than for the fellow with a thousand ideas who does nothing.” ~ Thomas Edison.
  • “Unfortunately, there seems to be far more opportunity out there than ability…. We should remember that good fortune often happens when opportunity meets with preparation.” ~ Thomas Edison
  • “Where there is no Standard there can be no Kaizen.” ~ Taiichi Ohno
  • “I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.” ~ Eliyahu M.Goldratt, The Goal
  • “Quality is free. It’s not a gift, but it’s free. The ‘unquality’ things are what cost money.” ~ Phil Crosby
  • “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.” ~ Taiichi Ohno
  • “If you can’t describe what you are doing as a process, you don’t know what you’re doing.” ~ W. Edwards Deming
  • “Focus on the lowest total cost of ownership not the lowest price.” ~ EverythingSupplyChain.com
  • “If you think of standardization as the best that you know today, but which is to be improved tomorrow; you get somewhere.” ~ Henry Ford, founder Ford Motor Company
  • “It is impossible to improve any process until it is standardized. If the process is shifting from here to there, then any improvement will just be one more variation that is occasionally used and mostly ignored. One must standardize, and thus stabilize the process, before continuous improvement can be made.” ~ Masaaki Imai

Uber freight supply chain

Jun 242017
 
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Outsourcing Advantages and Disadvantages

Advantages to Outsourcing

  • Cost reduction

  • More flexibility with manufacturing and capacity.

  • Lower labor costs

  • Capital does not need to be invested in machinery or plant capacity

  • Not a core competency so outsource it

  • Flexibility

Why People Don’t Outsource

  • Loss of control over the process.  It is imperative to choose the correct outsourcing partner and to form contractual arrangements to ensure appropriate delivery and lead times.

  • Afraid of outsourcing competitive advantage.  IBM outsourced both the microchip (Intel) and the operating system (Microsoft).

  • Partnering with wrong supplier.

  • Costs are not justified

  • Company wants to vertically integrate

  • Does not understand the benefits of outsourcing

Jun 242017
 
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SUPPLIER MANAGEMENT


In order to get the most out of suppliers it is important to decrease the supplier base and work closely with existing suppliers.   Use the following information to evaluate supplier performance.

PRIMARY MEASURES 

  • Price
  • Financial Feasibility
  • Attitude
  • Training Resources
  • Facility Location
  • IT Resources
  • Capacity
  • Speed
  • Delivery Performance
  • Damages
  • On Time Deliveries
  • PO Correctness
  • Stock Out Frequency
  • Perfect Orders
  • Product Availability
  • Dependability
  • Number of claims/discrepancies
  • Labor relations
  • Quality
  • Past History
  • Warranties
  • Costing Procedures
  • Information Sharing
  • Company Reputation
  • Packaging Abilities
  • Shipping Capabilities
  • Cycle Time
  • Facility locations
  • Product Availability
  • Flexibility
  • Reliability
  • Order Cycle Time
  • Lead Time
  • Convenience
  • Billing Errors
  • Quality control
  • Warranties

QUESTIONS FOR VENDOR MANAGEMENT (existing suppliers)

  • Supplier works closely to lower overall costs
  • Supplier provides market/product knowledge/information along with service and support
  • Supplier identifies opportunities to decrease costs and suggests ideas on ways to improve the supply chain.
  • Supplier performs joint cost-reduction/quality improvement programs
  • Supplier can deliver products across various geographic regions
  • Shares data and supplies resources to locate and solve problems.
  • Deliveries meet deadlines and do not need to be expedited to meet delivery time.
  • Supplier readily shares cost information.
  • Supplier recognizes potential opportunities to incorporate new ideas.
  • Supplier is involved with product in early stages of design
  • Supplier implements procedures for controlling fluctuations in raw material costs
  • Provides technical support for production/quality problems
  • Supplier gives ideas and suggestions during initial stages of product development
  • Proactive in offering innovative and alternative technologies
  • Supplier is proactive in finding problems and discovering solutions
  • Supplier gives feedback on quotations to reduce costs
  • High interest in joint problem solving.
  • Reacts quickly and effectively to problems and proactive to finding solutions
  • Supplier is flexible and adjust to special requests when needed
  • Supplier responds quickly and effectively under adverse situations.
  • Supplier keeps the lines of communication open and lets customers know when problems may occur
  • Expedites emergency orders in a timely manner
  • Suppliers do what they say and are trustworthy
  • Proactive in communicating forecasts for planning and deliveries
  • Suppliers’ technology roadmap aligns with the company’s current IT initiatives
  • Capable to exchange information through the Internet
  • Proactive in providing value added proposals
  • Supplier provides innovative suggestions for improvements and anticipates future problems
  • Participates in joint development efforts
  • Provides technological assistance and engineering support
  • Supplier is willing to provide rapid modeling and prototype capabilities
  • What is the financial feasibility of the company
  • What is the vendor’s reputation in the industry
  • Is the quality worth the price
  • Is the product over engineered
  • Does the supplier have a quality system in place
  • Is there a quality improvement plan in place
  • Does the vendor meet delivery and cycle time goals
  • Does the supplier try to reduce lead times
  • Are there processes for controlling and leveraging raw material cost

Supplier Management and Development Training.

Supplier Management P&G

Supplier Selection and Certification

Jun 242017
 
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QUALITY

Continuous improvement in order to reach superior quality should be the goal of every company.  Quality helps to lower cost and is one of the primary factors in the purchase making decision.  The level of quality also distinguishes a company’s product/service.  A high quality product can command a high price where a low quality product will have a less expensive price tag.

Quality in manufacturing is generally measured by the number of defects compared to the output.  When there is a defect in a product there are many costs that come with it including: rework, waste, labor usage, late deliveries and poor customer service.

Quality of the product is located in the:

  • Product design

  • Process design

  • Labor (how skilled are the workers)

  • Direct Material

  • Equipment

  • Number of inspection points

Costs associated with poor quality:

  • Decreased sales

  • Bad reputation

  • Waste

  • Rework

  • Late Deliveries

  • Poor customer service

  • Labor usage

There are three gurus of quality that will most likely be mentioned during quality discussions.  They include Dr. Edward Deming, Dr. Joseph Juran and Philip Crosby.

Quality Management Training

Deming, Juran and Crosby Quality Philosophies.

Deming’s 14 Points on Total Quality Management – TQM.

Jun 232017
 
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COST MANAGEMENT 

Cost Management – analyzing the costs of purchased goods in order to develop strategies to lower costs while improving supplier relationships.  The following table is from a paper written by Lisa Ellram entitled “A Structured Method for Applying Purchasing Cost Management Tools.”  The article was published by the International Journal of Purchasing and Materials Mangement 11-19.  I highly recommend reading this article.

Questions to be Addressed During Cost Analysis/Overhead Analysis

1.  Which costs are necessary and legitimate?

2.  Are amounts estimated for the necessary cost items reasonable?

3.  Is the overhead allocation to this item potentially subsidizing another item which the organization sells?

4.  Have the correct allocation bases been used?  If not, is it to our benefit to challenge the allocation methods?

5.  Are only those expenses which should be allocated to our purchase so allocated?

6.  Are there allowances for contingencies?  Do these allowances seem legitimate?

7.  Are profits reasonable enough, yet not excessive, to keep the supplier motivated?

ORDERING COST

Order Cost = (Annual Demand * Order Cost)/Order Quantity in Units

PURCHASING COSTS

Purchasing Cost = Annual Demand * Price per unit

TOTAL PURCHASING COST

Total cost = Ordering Cost + Carrying Cost + Purchasing Cost

Jun 232017
 
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Strategic Cost Management

Strategic Cost Management contains supply chain analysis, strategic positioning analysis and cost driver analysis.  By evaluating each of these three and manager will be able to better manage and understand costs.

Supply Chain Analysis – management of the flow of information and products from earliest supplier to the ultimate consumer.  This also includes the disposal of the product.

Strategic Positioning Analysis – what is the value proposition of the company: cost leadership, innovation, niche, speed, etc.

Cost Driver Analysis – what processes or transactions create costs in the supply chain.  

Cost Analysis:

  •  Can a less expensive material/components be used while maintaining quality?

  • Are the costs reasonable?

  • Is a standard item in the market a suitable substitute?

  • Can the weight of the item be reduced?

  • Can the packaging be redesigned to reduce costs?

  • Are the correct costs being allocated to the project?  

  • Have the correct activity based costing methods been used?

  • Is the product over engineered?  Could a lower quality product be substituted?

  • Are other suppliers making a comparable product?

  • Which costs are necessary?

Jun 102017
 
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Amazon Delivery Drones – unmanned airship to launch its delivery drones

How will Amazon delivery drones impact the parcel carriers?

Supply Chain and Leadership Information.

Digital Supply Chain Quotes.

  • “Don’t let the digital supply chain scare you. Big Data, IoT, Cloud, AI, Drones and Deep Learning are just ways to improve the supply chain.” ~SupplyChainToday.com.
  • “Lets go invent tomorrow instead of worrying about what happened yesterday.” ~ Steve Jobs.
  • “Blockbuster? Digital changed the way we rent movies. How will the digital supply chain impact the way we do business?” ~EverythingSupplyChain.com.
  • “Residential drone delivery is being tested by a variety of companies.  From delivering packages to delivering pizza, drone delivery is in the near future.” ~SupplyChainToday.com.
  • “The Internet of Things (IoT) will change the supply chain.  Research IoT before you get left behind.” ~SupplyChainToday.com. 
  • “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” ~ Lee Iacocca.
  • “The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” ~ Socrates.
  • “What are your thoughts? Buzzword bingo or the future of supply chain? IoT, drones, deep learning, big data, virtual reality…” ~EverythingSupplyChain.com.

Did you catch the spelling mistake?  Measure twice, cut once.

supply chain Amazon delivery drones