If you’re looking for ways to improve productivity in your company’s supply chain, the answers will probably lie in the way people, assets and technology—the three pillars of productivity—are managed.
Just like many supporting structures, the three pillars of supply chain productivity, are separate but interdependent entities. If any of the three pillars lack strength, sub-optimal productivity is only to be expected. Improving the strength of any single pillar will add to the integrity of the others and productivity will improve.
While it’s not advisable therefore, to focus on any one of the three pillars exclusively, it does make sense to understand some of the ways in which each can be reinforced and how doing so might yield productivity increases.
Sweat the Assets
Distribution centres, warehouses, a fleet of trucks or other transportation units, mechanical handling equipment, and sundry tools of the trade are all assets which influence productivity depending on how they are used and managed. The harder you can make your company’s assets work, the greater the productivity you can expect.
Things to think about when seeking asset utilisation improvements could include:
DC and Warehouse Location
This is an important element of supply chain network optimization; an activity which in itself can improve productivity. Optimal facility location will differ from one organisation to the next, so it’s really not possible to generalise on where your facilities should be sited.
However, an analysis of your current network, conducted with the help of some modeling software and perhaps an external consulting firm, should highlight any existing possibilities to improve supply chain productivity through a network redesign.
Warehouse Layout and Utilisation
In addition to looking at whether you have the right number of warehouses and if they’re in the best possible location, you should also be evaluating how well each facility is being utilised. For example:
- Are you using all the vertical space in your warehouses?
- Can you decrease the travel distances for your fork lift trucks?
- Are your picking routes optimized?
In my experience, there are almost always productivity gains to be made by improving warehouse layout if you look hard enough. Don’t forget to look at housekeeping too. The cleaner and tidier your warehouses are, the faster your FLTs and operatives can work.
Mechanical Handling Equipment
Selecting the right fork lift and pallet trucks for your facilities is critical if you want your warehousing operation to support high supply chain productivity.
- Are your warehouse operatives trying to negotiate narrow aisles with counterbalance trucks when reach trucks would be more efficient?
- Would you get more picking done if you replaced some pedestrian pallet trucks with ride-on versions capable of moving two pallets at a time?
- Do you have spare battery packs on charge so you can swap them to save downtime for electric trucks?
Don’t forget to look at the benefits of automation too. While the investment is considerable, automated warehouse equipment doesn’t need to eat, sleep or take holidays.
If your company operates an in-house fleet of vehicles, you should investigate whether they are the best fit for your operation.
- Are you struggling with a fleet of vehicles that are becoming too large, as cities increasingly reduce the size of vehicles permitted in the streets?
- Would a few larger vehicles save you from dispatching trucks with only a few pallets of overspill onboard?
How about overall vehicle utilisation?
- Are you using a high percentage of the available load capacity?
- Are you able to use two or three driver shifts to keep your truck wheels turning day and night?
- Is your fleet maintenance in-house?
- If not, is your maintenance provider located close to where your fleet is based to minimise the amount of time lost on repairs or servicing?
All these factors will make a difference to your fleet productivity and therefore, that of your entire supply chain.
Sometimes the objective of raising supply chain productivity can best be met by outsourcing processes to third party logistics providers. Under the right circumstances, outsourcing can be more cost-effective, as well as more productive than keeping logistics in-house.
Empower The People
Even if your company uses automation heavily, it still depends on people to maintain supply chain productivity. There are many ways you can raise labor productivity. If you’re not already doing so, you could try any of the following strategies and tactics:
- Eliminate paper-based processes within all supply chain functions. Make use of digital technology to create seamless workflows and remove the need for manual data entry.
- Implement task interleaving in your warehouses (you’ll need a WMS platform that supports interleaving).
- Introduce best practices wherever possible. Either use best practices from across your own organisation or look to those which are recognized within supply chain in your industry generally.
- Standardise business processes to eliminate variation and improve efficiency.
- Establish a robust performance management program, using SMART objectives and productivity KPIs.
Leverage The Technology
On its own, software technology will seldom yield improvements in supply chain productivity, with the exception perhaps, of full automation. However, what technology does do, when selected carefully and implemented well, is to support improvements in the management of assets and people.
Some business management platforms and solutions to consider, which are most likely to help you raise levels of supply chain productivity include:
- Warehouse management systems; preferably supporting RF or barcode scanning and eyes-forward order picking solutions such as pick-by-voice.
- A labour management platform for your warehouses. These are integrated solutions in some WMS platforms. Alternatively, stand-alone applications are available.
- An automated scheduling and routing tool if you have your own goods-vehicle fleet. The latest systems can plan hundreds of customer orders onto optimised shipments in a fraction of the time it would take to plan fleet movements manually.
- An ERP platform, which can improve cross-functional workflows and make them more efficient. A good ERP solution will support increased productivity in your administrative departments, as well as on the warehouse floor and throughout your transportation operations.
- An electronic proof-of-delivery (EPOD) application for your drivers. This can help your drivers complete customer deliveries more quickly and eliminate the need for manual data entry in the transport office.
These are just a few examples of software to help achieve supply chain productivity increases. Your company may already have some of these solutions in place. Some of them may offer more benefits than others for your operation. Your organisation will need to evaluate their potential value and prioritise investment accordingly.
Process Matters Too
Your company’s assets, people and technology all need effective monitoring, measuring and management if your supply chain productivity is to head in the right direction. If these are the three pillars though, your business processes represent the platform lying atop them on which productivity rests.
That’s why you need to frequently take a critical look at your processes and utilise a PDCA (Plan, Do, Check, Adjust) cycle of continuous improvement.
Always remember that in today’s competitive supply chain environment, standing still is the equivalent of going backwards. There is never a satisfactory justification to feel satisfied with current levels of productivity. Hopefully this post will serve as a checklist of things to consider when looking for the next incremental supply chain productivity increase for your company.