Supply Chain Downloads

Lets take a walk down memory lane and meet some people and see some events that shaped supply chain thinking

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Unitisation of inventory  was used by Napolen

The metal can was invented to provide a way to bring safe, ample food supplies to Napoleon’s army on the battlefields.

Next time you reach for a can of chickpeas or tomatoes for the makings of a last-minute meal, pay a tribute to Nicolas François Appert.
He’s the French confectioner who responded to Emperor Napoleon Bonaparte’s offer of a cash reward to any inventor who came up with a safe and inexpensive means to preserve large amounts of food for malnourished and scurvy-suffering troops during the French Revolutionary wars.
In 1809 Appert developed a method of sealing food inside glass jars by submerging them in boiling water, thereby preventing bacteria from spoiling the contents.

Alexender The Great(336–323 BC)was a master SCM strategist
He was one of the most successful military commanders of all time and is presumed undefeated in battle. By the time of his death, he had conquered most of the world known to the ancient Greeks.

Alexander concluded that the trailing train of the supplies for his army was acting as constraint in achieving speed. He disaggregated the supply train and asked the soldiers to carry his supplies of 10 days equivalent requirement in backpacks. The movement of the army was synchronized with the harvest cycles. Alexander can be sighted as first user of concept of disaggregation to achieve flow.

The Present Context for SCM

Physical distribution management was the earliest formal logistics function. It had the scope limited to examining the physical and managerial aspects of the outbound and inbound logistics activity. With the electronics era at a later stage, providing electronic data processing capabilities, the informational subsystem gained in significance, for physical distribution management, and even became the driver of processes for this function.   

Leveraging on the capability of information handling systems, the scope of physical distribution management came to include some parts of the financial subsystem, wherein management of the cash and funds flow cycles also became a part of SCM.

SCM now has an impact on   service factors such as quality and product design. The Just-in-Time (JIT) philosophy has led to emphasis being laid on the linkages between streamlined logistics and quality control. The financial system facilitates the tying up of different activities across entities.

The physical scope of SCM is enlarged to look at the entire gamut of activities from vendor to customer. The SCM perspective looks at the stream of activities from raw material to consumption. The effectiveness of delivery to the customer has become the primary focus, taking into consideration the changing nature of demands and technologies.

The IT enabled supply Chain

The post-World War II supply chain was a set of linear, individualized processes that linked manufacturers, warehouses, wholesalers, retailers and consumers together in the form of a human/paper chain.

The 1960s saw the birth of the first inventory management software systems, which were typically customized, to aid inventory control in the manufacturing sector. In the 1970s, SCM innovations brought forth Material Requirements Planning (MRP) – a system that phases out the release of production and purchase orders to ensure that the flow of raw materials and in-process inventories matches the manufacturer’s production schedules for finished products. By the 1980s, Manufacturing Resources Planning (MRP-II) was developed, bringing with it systems that could be used for planning all manufacturing resources, including those related to operational planning, financial planning, business planning, capacity requirements planning, and master production scheduling. E.g SAP .It was MRP-II’s extension into the business enterprise that evolved into an entirely new information technology sector: Enterprise Resource Planning, or ERP.
SCM has taken on additional names, such as business-to-business or B2B. It’s processes and capabilities have also allowed for more focused, “one-on-one” extensions – namely exchanges. An exchange is a two-sided marketplace where buyers and suppliers negotiate prices and fulfill online transactions between one another and are either private or public. For example, a private exchange would involve Company A selling widgets to Company B, meeting together on a secure web site to place and fulfill orders exclusively and by invitation only; a public exchange is more of an auction or bidding place for pre-qualified subscribers or members.
 
However,However

Organisations still struggle with issues like:

1.Forecasting inaccuracy
2.Higher inventory
3.Shortages and surpluses
4.Unreliable supplies
5.Behaviour aspects of supply chain-Bullwhip effect,relationships, value of skus.

So what strategies do modern corportaes learn from these footprints on the sand of time ?

Batching  or consolidation in any process is a constraint to flow.
Where it was not possible to do away with batching, the flow was brought to as near as possible to continuous or piece flow.

In modern business, we deal with flow of material and flow of information.

Breaking of batching in information flow also leads to breaking of batching in material flow.

Prioritisation is based on protection of flow and no other consideration

In short, recognise the flow that you need to exploit. Know where to aggregate and where to disaggregate. Most importantly, recognise which flow to protect and which to destroy.

Happy Thinking

Cold Chain Logistics

 

 successful cold chain management- A user’s perspective

       

Intensification of international competition and the development of the global market is being driven by higher demands for improved performance and quality to meet customer demand. Customers expect increased value addition, better response time, cost effectiveness and reliability in supply lines. Expectations from temperature controlled supply chains are no different. However in addition to the above, cold chains also have to face the challenge of ensuring product stability by maintaining the required transport and storage conditions. The consequences of failing to do so could be and are colossal.

 

COLD CHAINS- WHO NEEDS THEM?

Certain products and industries need their products to be shipped and stored in temperature controlled conditions, though the requirements for control of temperature may vary.  The following products require temperature controlled handling.

•         Bio logics,

•         Pharmaceuticals

•         Chemicals

•         Perishable food items

•         Farm products

 What is required to create cold chains?

The basic requirements for putting together a cold chain can be compiled as follows-

•         Equipment providers

•          Logistics Service Providers

•         Airlines/Shipping lines/Transporters

•          3PL Warehouse providers

Other agencies that are involved in the execution of cold supply chains can be listed as follows.

•         Customs

•          Ports and Airport handling agents

•          Custodians of ports and airports

•          Regulatory bodies FDA,MOH,ADC in case of  pharmaceuticals

 Interface with service providers –

A user of cold chain has to interface with the service providers for:

•          Integration of end to end information flow

•          Planning of milestones and its tracking  during the transit rigorously

•          Warehousing and transportation needs

  Besides choice of service provider the other decisions that need to be taken are regarding design of cold chains for an organization are as follows:

 

•         Cost

•          Size of shipment/inventory

•         Quality Validation of equipment for number of hours of transit

•          Weight/Volume capacities of various equipments

•           Quality Validation of warehouses

These decisions are normally taken in partnership with service providers whose role is to guide the user on correct equipment, service levels and solutions available in the freight market.

 

Role of Quality Validatiionon IN DESIGN of Cold Supply Chain.

It is important that the storage and transport conditions are mapped and validated by the concerned quality assurance department of the organization. Certain products require stringent control over these conditions to ensure stability of the products. The following are the requirements:

 

•         Entire route might need to be mapped for temperature using data loggers

•          Results of mapping to be validated by concerned QA dept of the organization

•          Any deviations from standard normally requires prior approval by QA

•          Sometimes measured deviations can be approved if it does  not affect the stability of the product

•          Good Warehousing Practice (cGWP) is also an input to the above approvals.

 Equipments for handling cold chain

 quipments that handle temperature sensitive products can be broadly classified into two types:

•         One which provides the insulation – slows  down the heating  of the product

•          One that provides the active cooling

Equipment – Methods of Cooling

•         Active Cooling -Outside source to continuously cool the goods

•          Envirotainer, Reefer containers , temperature controlled trucks   and warehouses

•          Passive cooling -Which retards the thermal gradient by use of  coolants like dry ice, ice packets, gels

•          Thermo quilt, Thermo boxes & special insulated boxes

 

 

How to handle cold chains 

When a facility is not in the shippers’ control, it is not easy to establish and ensure the integrity of the supply chain. The biggest challenge is to establish integrity of supply chain across its complete length and the consistency of the same. There could also be some trade-offs that might need to be considered

•         Trade-off between Passive cooling  and Active Cooling

•         Trade-offs between approved deviation from standard and cost

As per recent studies it has been observed that lead time variability in logistics could be as high as 50% out of which up to 15% could be attributed to the software of logistics. Because of these variations mapping and monitoring of the performance of chain becomes very important.

Issues and Concerns

•         Delays could lead to very high Demurrages or detention charges.

•         Size of shipment not matched with equipment availability

•         Contamination of product with other shipments while in domain of public infrastructure.

•         Handling of small shipments

•         Customs regulations are not always  product friendly

•         Availability of Plug-in points at smaller ICDs

•         20Feet reefer availability