Page 17 - Case Study Annual 2015

with cost carrying buffers to absorb the resultant out-
of-synch. But if one doesn’t support SCM principles
and all that goes with them, the resultant sub-optimal
costs are carried by customers, who will eventually
move to a lower-cost team – remember India, Brazil,
China, Vietnam ... Short-sighted owners end up with
potentially profitable operations, but no work and low
returns and then eventually a sell-off – where is the
value and fiduciary duty in this?
The final dimension of award winning supply chain
performance is sustainability or green supply chain
– a fairly recent concept to the old-school resource-
vacuuming commercial world. Elimination of waste
has been the foundation concept of manufacturing
for decades, where waste is anything, including time,
energy, material, money, and space. These initiatives,
driven by competitive costing as far back as the
1970s, forced dramatic improvements and innovation
in manufacturing operations. However, the logistics
industry only caught on over the past decade when
legislation forced everyone to think of saving (or rather
not wasting) limited natural resources like water, oil,
coal and others while improving processes to minimise
the carbon footprint. Sustainability has also led to focus
on effective recycling and the ‘Return’ part of the SCOR
model.
It’s great that, after 27 years of Logistics Achiever
Awards, these concepts are clearly understood by the
entrant companies, and measured by the judges. Awards
are no longer for ‘logistics initiatives’ like 15 years ago
where the use of a ‘TV remote’ to help manoeuvre a
shunting locomotive from its front instead of the driver’s
seat, won a top award. Sure it was innovative at the time
and saved some cost (well one job per locomotive). But
this was an isolated logistics initiative, and it’s no longer chains, to locate new facilities in the right place to serve
enough. Achiever Awards are now earned from “... a
demonstration of excellence in effective application
of strategic, tactical and operational logistics and SCM
principals, concepts and practices” for the logistics
industry. That’s a far broader supply chain approach.
How to win an Achiever Award
Warehousing: Now Achievers win because their
warehouse was designed and built to the guidelines
of the Green Building Council of SA, uses low energy
lighting, monitors fuel and energy usage, highlighting
exceptions. Racking uses shuttles and sectioned storage
containers for small articles, with goods-to-person
movements, minimising operator movement and
maximising accuracy. With conventional layout, one
needs innovative and flexible rack and pack sizes to
suit customers products to optimise space usage and
flow through speeds. Truck movements and size need
to be dynamically optimised so loads meet vehicle size,
weight and axle loading.
One needs a system that provides accurate visibility
of arrivals (through ASNs) and distribution requirements
so labour can be optimised while minimising product
handling and internal travel for put-away and picking.
One may even design a prefabricated functional
warehouse that can be shipped in a container to
a remote location, assembled and put quickly into
operation as a rural DC.
And one needs to rationalise multiple old facilities
into one via improved planning, movement efficiencies
and systems, plus allowing the creation of a green
warehouse with a lower carbon footprint.
Transport and movement: Fleets must optimise
the use of vehicle assets, matching loads to vehicle size
where possible, and routing most efficiently by taking
account of traffic density to reroute if necessary using
on-board GPS.
Vehicles themselves need redesign to optimise
aerodynamics using body shaping AeroKits or trailer
shape to reduce drag. Driver skill and behaviour must
be taught and monitored to ensure minimum use of
fuel.
Loading and unloading systems, processes and
materials handling equipment must match those at
supplier pick-up and customer drop-off locations
minimising turnaround times – remember, a day saved
in planning or execution is a day of inventory saved in
the pipeline.
Network Design: Sophisticated network modeling
tools are used to ensure optimal design and planning to
move materials through inbound and outbound supply
the market or optimise the network being used.
One opportunity not adequately tapped by the
logistics industry regarding SCOR ‘Source Make Deliver
and Return’ is the ‘Make’. Manufacturing requires
significant internal and externally connected logistics –
look at the OEM automotive industry. It would be good
to see another Achiever Award that incorporates more of
the manufacturing leg as achieved by a Platinum Award
winner this year. Think about it: there is a complex
logistics and supply chain enabling the ‘Make’ possible,
and then there’s a complex logistics and supply chain
after the ‘Make’ to enable marketing and delivery to
customers around the world. We still tend to focus
on ‘store’ and ‘move’ – logistics principles – maybe
because we understand this as the logistics industry,
rather than applying our skills to the full supply chain
including manufacturing. We have moved from one
location project to collaborative two or three stages. It’s
time to include more of the ‘Make’ as well for a 21st
century achiever win. •
By Doug Hunter, doug.hunter@mweb.co.za
the logistics news case study annual 2015 15