Wednesday, January 28, 2009

Profit comes from Effective Supply Chain Management

By Larry Emsweller

You have to make sure that your supply chain management is at full optimization. Using a sophisticated and new direct plant shipping software program can minimize costs. The right software program can redirect multiple SKU orders. One is simple, but when you multiply the number of SKU orders, it can get complicated. A good software program can make all the difference.

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.

What is needed is a timely, capacity balanced optimization system that performs the sourcing analysis in near real-time and determines that the order should ship from the Chicago plant. There are tools for distributed order processing - but most of those are designed for the likes of catalog shippers. In the catalog world, if there is insufficient inventory in one location, then the order will be redirected to another. Most applications that tackle the more substantive issues of ship point optimization in companies shipping truckloads of consumer-packaged goods have been custom built. One new entry in the market is AutoSPA (Automatic Ship Point Assignment), also from Transportation l Warehouse Optimization. This system looks at the total cost of delivery - from producing plant to customer - as well as potential costs for product expiring in one location and being scrapped.

AutoSPA can also limit the number of shipments made from any site.

Savings here are significant for ship-point assignment, up to nearly twice as much as DPS alone. This is huge in supply chain management - well worth doing.

When you consider a transportation consultant, Transportation | Warehouse Optimization have been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view and keep the client as top priority. Contact them at www.Transportation Optimization.com for transportation cost reductions or solutions to warehouse challenges. While visiting their website, sign up for their exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for truck operators. Transportation l Warehouse Optimization - Solutions that work. Solutions that save. - 16955

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