Automotive aftermarket service specialist Lex Auto Logistics’ new warehouse management system (WMS) installed at its 50,000sq m distribution centre in Chorley, Lancashire, has enabled it to improve the service provided to nearly 3,000 UK and export customers. The WMS, supplied by Manhattan Associates, has provided Lex with the operational capability to effectively manage 300,000-plus product lines, and handle an annual throughput of nearly 13 million piece part movements. In second week of live operation, the distribution centre was able to pick, pack and ship more orders in one day than it had ever previously been able to do.
Software house ncSoft has launched a reverse auction facility – ncAuction – which enables companies to “make dramatic savings” by running their own online reverse auctions. Initial results indicate that ncAuctions can achieve savings of up to 25% on purchasing costs. Online bidding enables companies to obtain the best market price from pre-qualified, pre-selected suppliers. The lowest bid is used as the opening price for suppliers to compete in an open auction, online and in real-time, to ensure that project costs are driven down quickly and cost-effectively. ncSoft’s fees are based on savings achieved, so there are no upfront costs or fees.
Lyreco, which distributes office supplies, is improving the quality of its customer relations by digitising delivery slips in 18 countries using the ITESOFT.FreeMind solution. The primary objective of this project is to achieve an improvement in the quality and turnaround time of responses to customers, using the ability to instantly access an image of the signed delivery slip. The first stage in the setting up of the project involved four European sites – France, the UK, Germany and Spain – the processing of more than six million delivery slips. In the second phase, the roll-out will continue with other countries where the group has a presence.
Where were you on September 11, 2001? It was one of the defining moments of our age and everyone remembers exactly what they were doing when they heard the news. I had just finished a phone call to the Emergency Planning College in Yorkshire, where a helpful librarian had informed me that his collection contained no references whatsoever to supply chains. They had plenty of material on terrorist attacks on the national infrastructure, but that wasn’t what I was looking for at all. At the time I was desperately trying to get some momentum behind the first leg of a research project we were conducting at Cranfield, into a deeply unfashionable subject – Supply Chain Vulnerability.
Here in the UK we already knew that businesses and whole economies were vulnerable to supply chain disruptions. Fuel protesters and an outbreak of foot and mouth disease had just proved it. As a result three UK government departments had thrown their support behind a preliminary study into the vulnerability of commercial supply chains. The research was not going well – industry didn’t want to discuss what seemed to be the corporate equivalent of planning your own funeral. The events of 9/11 changed that overnight. They put Supply Chain Vulnerability on the corporate agenda. The political shock waves that followed continue to keep it there.
Of course supply chain vulnerability is not a new issue, 9/11 simply legitimised a debate that had been simmering away for several years. It is now widely acknowledged that it was the closure of US borders and North American airspace, rather than the attacks themselves that caused such massive disruption to supply chains around the world. Nevertheless it took the lid off suggestions that contemporary supply chains were becoming longer, leaner and more brittle.
Only a couple of years earlier the threat of Y2K had focussed minds on how dependent organisations had become on their information systems. The widespread disruptions it was expected to bring did not materialise. However a survey of supply chain professionals conducted as part of the second phase of our research programme indicated that it was not quite the non-event that it appeared to be.
Risk management
The survey was part of a much larger Department for Transport-funded programme of research which looked deeper than ever before into the causes and drivers of supply chain disruptions. It did so by examining supply chain risk in its broadest sense, across a range of industries including healthcare, grocery (retail and manufacture), transport and distribution, automotive, petrochemicals, packaging and defence.
Several common themes emerged from the study. First and foremost was the perennial problem of visibility. The substitution of information for inventory has become a mantra for supply chain management and few would argue that improving supply chain visibility remains the overriding priority for operational level supply chain risk management. Without it managers have little chance of realising the efficiency gains their organisations demand from better forecasting, inventory management and resource planning.
Rapidly emerging RFID technology promises better event management, security and control of inventory and better asset tracking, presumably leading to even leaner, more finely tuned and responsive supply chains. They improve visibility – undoubtedly a good thing – but look again, they also increase our dependency on reliable information systems, and with it a still greater dependence on efficient and reliable transport and communication infrastructures, here and abroad.
Technological advances change the risk profile for the supply chain and the network of businesses involved, sometimes subtly, sometimes dramatically. The same is true of almost any other measure we care to implement, whether it is the consolidation of manufacturing and distribution networks, globalisation of sourcing and supply or the outsourcing of ‘non-core’ activities. Each offers opportunities for cost reductions and in combination a recipe for the ‘Better, Faster, Cheaper’ operations…or do they?
