Feedbacks of the Week - Total Landed Costs
I have to say you hit the nail with this article. Ciba is a global chemical company facing the same issues. Not all six categories are being used, so far. Currently I'm running a project with the aim to review our inbound logistics (part A: Inbound Europe) (part B: Inbound US).
Please send me more about Supply Chain Logistics!
Head Logistics Procurement EMEA
Ciba Specialty Chemicals Inc.
On Best New Products of 2007
Since you ask for feedback on missed items in this column, I have an offer for you.
The product is called ICRON. It is an APS solution, nothing much new here, but it combines the very smart Algorithms with general labor management strategies, rules and regulations, therefore it can use it calculating expertise in the area of labor management and this being a top ten trend for 2008 it will be a huge step forward, they also expanded from logistics to healthcare and other complex labor situations, where they offer solutions to a level of detail previously not available.
Dehora Consultancy Group
Your article was very interesting. I wanted to give an overview of next generation supply chain optimization solutions that may be of interest to you.
Our CEO, Dr. Sean Siwhan Kim, and Dr Paul Bender worked together for a long time in Bender Management Consulting (bought by SynQuest) developing first generations of supply chain solutions. In 2003, Dr Kim started Agillence to develop next generation optimization solutions.
During the last 5 years, we developed the following solutions to address the special needs of our customers.
ALLO (Agillence Lean Logistics Optimizer): Manufacturers successfully adopting lean in their production but are willing to expand beyond factory to logistics. Their dilemma is lean Vs costs in logistics. Over the last four years, we developed a special solution for Toyota Manufacturing to design their inbound network with different lean constraints practiced by Toyota. Interestingly, we found interest for the same solution for the distribution side also. Dr Jeffrey Liker even took our Toyota project as a case study in his “The Toyota Way Fieldbook” on how Toyota adopts technology. I am enclosing a soft copy of the chapter.
ASCD (Agillence Supply Chain Designer): Traditional supply chain design tools approximate the last mile costs (DC to customer). We found that this approximation leads to larger error in actual implementation. Hence we developed a design tool which does network design along with customer routing also. Our routing considers even varying customer service requirements. We have successfully adopted this solution in the top 2 of 4 beverage companies in US.
Vice President, Professional Services
Ken Miesemer makes several good points in his ‘count-back’ article. I applaud his thoughts on taking a look at the costs and benefits of count-back across the entire supply chain. As most supply chain people know, the cost to correct picking errors is often not fully evaluated or even worse, it goes ignored.
A simple mis-pick can result in subsequent mis-picks based on bad inventory quantity and the whole thing begins to snowball. A simple mis-pick has a huge ripple effect in terms of order accuracy, shipping costs, administrative costs to deal with customer satisfaction/inventory management issues, etc. – add the true cost to correct a mis-pick across the supply chain, coupled with customer dissatisfaction, and I agree with Ken that the cost/benefit would be very, very compelling in favor of count-back.
It’s the old saying…”if you don’t have time to do it right, when will you have time to fix it." Thankfully, newer supply chain applications are adopting process modeling and workflow to help analyze these supply chain processes more effectively. We are working with customers to use workflow technology to more accurately map out and improve processes within the DC in order to improve overall supply chain costs and accuracy resulting in tremendous benefits for customers, warehouse operators and the bottom line.
On Chrysler Versus Plastech:
Chrysler’s tactics simply sped up the inevitable. Chrysler just miscalculated by bringing a knife to a gun fight. I wonder how big the check was that Chrysler had to scratch Plastech to continue supplying parts? Probably $1 less than the cost Plastech calculated it would cost Chrysler to idle their plants until their scheduled court date next week. I agree with Chrysler when they throw out the word “blackmail." The bean counters at Cerberus knew that the $200-250 million bailout package was not going to keep Plastech’s outstretched hand from coming back a few months later. This story is better than a novel and if you follow the money all the way through various “shell companies” I’m sure you will find it leads right to Julie and Jim Brown’s Swiss bank account.
On Wood Versus Plastech Pallets:
On wood vs plastic pallets, several of my clients are working with a company called IGPS, who is in competition with CHEP for the Pallet Pool Market. Thought I would comment on this article. The company uses synthetic pallets with an RFID chip imbedded in it, which is intriguing in and of itself (think Sam’s Club Mandate). I’m not a chemist so I don’t know specifics, but I don’t think IGPS’ pallets are made from polyethylene, which was the subject of this study.
From my understanding, their pallets are made from materials much friendlier to the environment. It might be worth some follow up to clarify. Other benefits I can see using plastic pallets are much longer life, recyclable, more sanitary and free of insects. There are many applications where synthetic pallets are superior to wood pallets, and I hate to see the entire category painted with the same brush in terms of impact on the environment.