If you lag behind in technology, you are putting your efficiency at risk. Supply chain management is simple if you are shipping one thing at a time, but when shipping multiple SKU orders, they need to be directed to the proper shipping point. A competent software management tool can maximize your direct plant shipping opportunities. It can save you time and efficiencies that will save you money.
It gets even more complex. How do you determine to ship from the plant if only 95% of the product is located there? If you do determine that it is ok to ship, how do the one or two missing pallets get ordered and later transferred to make the shipment complete? For most companies, it doesn't happen this way. These companies give up on anything but single SKU, fully in-stock orders because it is too tricky to do anything more complex. Their supply chain systems don't support this and they are forced to invoke the KISS (keep it simple) principle. They find the location with all the stock and send the order from there.
The KISS method - which is appropriate to call the old method - comes at a high cost. That is why companies, such as Procter & Gamble, realized they had to find a better way. P & G has an extensive supply chain management program and uses a distribution master scheduling system called AutoScheduler from Transportation l Warehouse Optimization to maximize their shipping by:
A. Pre-positioning inventory to maximize DPS B. Determining the best place to ship any order from C. Re-deploying the inventory to ensure the shipment is complete D. Establishing the dock and staff schedule to perceive the customer service goal of on-time, every-time
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.
At the same time, AutoSPA can limit the number of shipments that can be made from any site. For example, if there are 200 shipments to be made in the South East, there is no sense in overbooking the Miami DC when Atlanta is idle. Rather, Miami should work to its capacity leaving some volume for Atlanta.
The savings from scheduling software and ship-point assignment are significant. In most cases, you can cut total supply chain management costs by nearly twice as much as DPS alone - so it is worth doing. It forms the basis of effective supply chain management.
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.
It gets even more complex. How do you determine to ship from the plant if only 95% of the product is located there? If you do determine that it is ok to ship, how do the one or two missing pallets get ordered and later transferred to make the shipment complete? For most companies, it doesn't happen this way. These companies give up on anything but single SKU, fully in-stock orders because it is too tricky to do anything more complex. Their supply chain systems don't support this and they are forced to invoke the KISS (keep it simple) principle. They find the location with all the stock and send the order from there.
The KISS method - which is appropriate to call the old method - comes at a high cost. That is why companies, such as Procter & Gamble, realized they had to find a better way. P & G has an extensive supply chain management program and uses a distribution master scheduling system called AutoScheduler from Transportation l Warehouse Optimization to maximize their shipping by:
A. Pre-positioning inventory to maximize DPS B. Determining the best place to ship any order from C. Re-deploying the inventory to ensure the shipment is complete D. Establishing the dock and staff schedule to perceive the customer service goal of on-time, every-time
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.
At the same time, AutoSPA can limit the number of shipments that can be made from any site. For example, if there are 200 shipments to be made in the South East, there is no sense in overbooking the Miami DC when Atlanta is idle. Rather, Miami should work to its capacity leaving some volume for Atlanta.
The savings from scheduling software and ship-point assignment are significant. In most cases, you can cut total supply chain management costs by nearly twice as much as DPS alone - so it is worth doing. It forms the basis of effective supply chain management.
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.
About the Author:
Tom Moore and his Associates at Transportation l Warehouse Optimization will help you maximize Supply Chain Management and save you money. Sign up for a 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.
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