Monday, August 24, 2020

Supply Chain Competencies

8 Must Have Supply Chain Competencies to Triumph in Your Career

The underlying Supply Chain technical competencies are skills, knowledge and characteristics that support the effective performance as Supply Chain professional. Given the global Supply Chain demands Supply Chain professional should never stop developing new skills and enhancing existing ones. Here are 8 core supply chain competencies that Supply Chain professionals need to master and continually improve (in no particular order!).

8 Technical Supply Chain Competencies

1.    Capacity Planning
Assuring that needed resources (e.g., manufacturing capacity, distribution centre capacity, transportation vehicles, etc.) will be available at the right time and place to meet logistics and supply chain needs. In other words, capacity planning focuses on determining the appropriate production levels that the company is capable of completing.

This also includes capacity planning with suppliers, at all manufacturing cells and also critical machine/equipment; this also includes overall Equipment Effectiveness (OEE) and Sales Inventory & Operations Planning (SIOP

2.    Demand Management
The demand management is the process of determining what customer will purchase and when, in other words predicting demand. The good demand management uses qualitative and quantitative methods to use customer data to reduce uncertainty, predict short-term incoming demand for use as input into the Sales, Inventory, & Operations Planning (SIOP) process.

The competency includes the use of high analytical techniques, excel spreadsheets and maybe software to generate baseline statistical forecasts. In my view demand management is one of the most important Supply Chain competencies.

You can use this Demand Forecast Guide to take your Demand Management Skills to the next level.

3.    Order Processing
Out of all supply chain competencies, Order Processing is the most underrated competency. Order processing entails the system that an organisation has for getting orders from customers, checking the status of orders, communicating with customers about them, and actually filling the order and making it available for customers. In some business, it also includes processes until invoicing.

Part of the order processing includes checking inventory status, customer credit and accounts receivable in some businesses. Because the order processing cycle is a key area of customer interface with the organisation, it can have a big impact on a customer’s perception of service and, therefore, satisfaction (Shapiro, B.P. et. al. 1992).

The knowledge and skills are necessary to manage the receipt and scheduling of customer orders. Processes included in this competency include standard order receipt, exception identification, and exceptional resolution. Key to the success of this function are 1) the ability to work effectively with customers to clarify requirements and negotiate solutions when constraints exist, and 2) the ability to work effectively with other company functions to assess the ability to meet customer needs and to develop workaround solutions when necessary.

4.    Master Production Scheduling
The Master Production Scheduling is a statement of the anticipated manufacturing schedule for selected items by quantity per planning period (Fogarty and Hoffman 1983; Higgins and Tierney 1990). It is a response to the forecast demand described by the production plan, and the actual demand in terms of received customers’ orders.

This supply chain competency also includes evaluation of plant capacity effectively, attaining the strategic objectives of the business as reflected in the production plan.

Unlike a forecast of demand, the master schedule represents a management commitment, authorizing the procurement or manufacturing or materials in most cases.

5.    Inventory Management & Optimization
Inventory management is a practice to manage inventory as working capital. The key objective of inventory management is to increase corporate profitability through improved inventory activities such as demand planning, inventory optimization, safety stock management, excess and obsolete inventory management or right inventory levels to meet customer services expectation with a minimum possible inventory. You can read another useful The Ultimate Guide to Inventory Planning Methods and Excess and Obsolete Inventory Policy Guide – Revised & Updated to get in-depth knowledge of Inventory Management and improve this move have competency.

You can find also refer to 18 Targeted Inventory Reduction Strategies for Supply Chain Professionals

6.    Materials Replenishment Planning
SAP has defined this competency very well as, “the main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.

In doing so, material requirements planning tries to strike the best balance possible between

  • Optimizing the service level and
  • Minimizing costs and capital lockup.

The material requirements planning process needs all the information on stocks, stock reservations, and stocks on order to calculate quantities, and also needs information on lead times and procurement times to calculate dates. The material requirements planning defines a suitable MRP and lot-sizing procedure for each material to determine procurement proposals“.

This supply chain competency includes the ability to take the Master Production Schedule replenishment quantities and “explode” quantities through the bill of materials to create component requirements, which are compared against on-hand and on-order and forecast. Purchasing or manufacturing orders are subsequently planned and either placed or deferred by pull in or push out messages.

To Improve this competency I have developed an inventory planning pack, where you can find all the tips, trick and theory on how to manage materials replenishment and Excess and Obsolete inventory.

7.    Logistics, Warehousing and Distribution
One of the key supply chain competence is to management physical flow of the goods, which mean the knowledge and skills necessary to effectively manage logistics communication, warehouse and storage management, material handling and distribution of goods (including reverse logistics).

This includes activities like Goods-in (receiving), put-a-way to stores, picking, packing, shipping and managing return goods from the customer. The competency includes the knowledge and understanding of above-mentioned activities, creating the right processes as well as effective application. You should refer to blog 5 Basics Warehouse Activities You Should Focus to Improve to understand more details.

Furthermore, you should use this Self-Assessment type Warehouse Audit Tool. This warehouse audit tool enables you to identify areas for improvement.

8.    Knowledge of Continuous Improvement Processes or Methods
As the name suggests knowledge of the processes or methods that seek to improve performance, which assumes more and smaller incremental improvement steps. In general learning and implementing the best known of these are the aforementioned: lean manufacturing (JIT), Six Sigma, Lean Six Sigma, and Agile.

Bu learning these philosophies it is not the rate of improvement which is important, it is the momentum of improvement in the area you want to improve.

If you are looking for Six Sigma Project Examples you can find here. And refer to this 5S Kaizen Guide to Eliminate the clutter with Sort, arrange with Straighten, sparkle with Shine, create a proper guideline with Standardize, and inspire with Sustain.

Final Thoughts:
Those are the 8 most indispensable Supply Chain competencies I believe. Each of them has definitely given my career a huge technical edge.

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Wednesday, August 19, 2020

Ongkos Logistik RI

Ongkos Logistik RI Masih Mahal, Kalah dari Tetangga di ASEAN

17 August 2020

Biaya logistik melalui laut yang mahal menyebabkan transportasi maritim Indonesia masih tertinggal jauh dari negara lainnya. Sekretaris Kementerian Koordinator Bidang Kemaritiman dan Investasi Agung Kuswandono menyebut ini sangat disayangkan.

Sebab, Indonesia merupakan negara maritim terbesar di dunia, sehingga potensi menggali transportasi laut sangat besar.

"Biaya logistik kita di RPJMN 2015-2019 yang lalu itu sebesar 23,2%, relatif lebih tinggi dibanding negara-negara ASEAN, apalagi Asia. Mereka sudah sampai 4%-5%. Artinya masih banyak cost yang perlu kita turunkan. Target 2024 di 18%, meski target turunnya gak terlalu jauh, tapi jangan membuat kita kerja slow," kata Agung dalam webinar Marine & Logistics Academy, Senin (17/8/2020).

Menurut dia, jika ada negara Asia lain sudah bisa mencapai angka 5%, maka usaha untuk ke arah sana perlu ditingkatkan. Kerja sama untuk mencapai itu pun perlu ditingkatkan, bukan justru bekerja sepotong-potong dan tidak terintegrasi antara satu instansi dan lainnya.

"Padahal di luar negeri pelanggan kita luar besar tapi di dalam kita kejar yang sifatnya kecil-kecil. Pelabuhan Indonesia mana yang bisa disandari kapal kargo dengan kapasitas besar seperti di Singapura atau Abu Dhabi? Pelabuhan-pelabuhan kita paling besar kapasitasnya menengah, itu pun baru-baru ini saja mereka bisa masuk," ujar Agung.

"Infrastruktur kurang bagus, draft (badan kapal yang tenggelam di air) masih dangkal, pelayanan kurang baik dan seterusnya. Ini jadi PR yang kita perbaiki bersama," lanjutnya.

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Monday, August 17, 2020

3PLs Add Value

November 13, 2019

Increasing consumer expectations, market uncertainty, and other recent trends have only enhanced the value 3PLs bring to shippers. From technology innovations to process insights, here are the ways 3PLs unlock and increase supply chain efficiencies.

Through a continued focus on innovation, technology, and fostering strong client relationships, third-party logistics providers (3PLs) are thriving as they help clients move and store goods more efficiently and effectively. Indeed, the 3PL industry is the healthiest it has been in a long time, says Joe Couto, chief operating officer with HighJump, a provider of supply chain solutions.

Companies turn to 3PLs for several reasons. One is economies of scale. When 3PLs purchase technology and equipment, they're able to amortize their investments over the many shippers with which they work. As a result, most can make investments that would be outside some shippers' budgets. "For many small shippers, transportation can be an afterthought," says Amit Saini, vice president of enterprise services with, a provider of enterprise artificial intelligence solutions. That's not the case with 3PLs.

Indeed, many 3PLs continually invest in warehouse, transportation, and labor management systems. "Those are real-time execution systems to help plan labor and equipment and maximize space,"says Michael Wohlwend, managing principal with Alpine Supply Chain Solutions Consulting. "Slotting optimization is also popular to support a 3PL customer's lifecycle."

In addition, many 3PLs are looking for capabilities, such as the ability to pick and fill online orders and provide next-day service, that will enable them to help clients more effectively navigate a market increasingly ruled by e-commerce.

The current interest in warehouse robots that can bring goods to people will continue, says Jack Buffington, director of plant logistics with MillerCoors Brewing Company in Golden, Colorado. Fueling this trend is the move by many robot manufacturers to offer "robots as a service." 3PLs can add to or subtract from their robot workforce as needed, and with a more modest investment than many previous automating systems required.

Along with automating previously manual tasks, robots will be able to provide analytics and data based on their constant observations of the workplace. For instance, a robot may be able to suggest a more efficient warehouse layout. "While robots' primary value is productivity and automation, in the near future it will be to analyze data," predicts Stefan Nusser, vice president of product with Fetch Robotics.

Artificial intelligence (AI), while still an emerging capability, will become increasingly critical to 3PLs. While most transportation management systems (TMS) operate by rules—if A, then B; if C, then D—the real world rarely does.

"AI systems, by definition, are probabilistic," Saini says. They can incorporate external data, such as weather forecasts, and find opportunities to optimize all legs of a journey. AI will help 3PLs keep their assets moving and full, generating savings they can pass on to shippers.

Because 3PLs work with multiple shippers, they're often able to identify opportunities for transportation network improvements that might not be readily apparent, Saini adds. Similarly, they may see patterns in an overall market that show, for instance, a shift in demand that an individual shipper might not be in a position to notice.

The growth of online ordering has enhanced the value 3PLs can provide. Customers' increasing expectation of next- or same-day delivery adds to transportation complexity. Many 3PLs have gained experience in tight delivery deadlines and omni-channel distribution, and companies in other industries are leveraging that expertise.

"Companies are focusing on their core competencies and letting companies that specialize in logistics manage the distribution," Wohlwend says.

For instance, by leveraging a 3PL, beer company MillerCoors doesn't have to invest in trucks and other transportation assets. Instead it can allocate its budget to the areas where it's an expert. Indeed, by working with 3PLs, shippers can access transportation and warehousing assets on a variable, rather than a fixed-cost, basis.

And because 3PLs often have space in a network of warehouses, they may be able to cut the time required to deliver goods to customers, says Jim Fleming, supply management program manager with the Institute for Supply Management.

Many 3PLs also have gained expertise in handling the myriad tax and regulatory responsibilities inherent in importing and exporting goods. Their knowledge of international shipping also can help shippers navigate sudden changes in trade agreements and tariffs.

As the cost and complexity of technology integrations continue to decline, communication between shippers and 3PLs has become easier and less expensive.

The Transportation Intermediaries Association, a trade group for 3PLs, has formed a technology committee to work on the "neutralization" of technology, says Robert Voltmann, president and chief executive officer. That is, in an ideal world, a 3PL would be able to move information between carrier and shipper, no matter which system each is using.

Today's 3PLs are increasingly interested in establishing partnerships with their clients. Many of the largest players can handle all parts of shippers' supply chains across the globe, Couto says. Regional players are offering more value-add services, such as returns management or light assembly work, he adds.

Since its launch 20 years ago, Jarrett Logistics Systems has earned the trust of numerous clients, from Fortune 500 firms to small- and mid-sized companies. Together, its clients span nearly 500 locations in 43 states, all Canadian provinces, and locations across Mexico. Jarrett remains one of the largest privately held 3PLs in North America.

The keys to Jarrett's growth and success? Its employees, as well as industry-leading technology. "We have great people who provide exceptional customer care," says founder Mike Jarrett.

One sign of this: between 7 a.m. and 9 p.m., no calls go to voice mail. "If you call, you're going to reach someone to speak to," he adds. Similarly, the information and logistics employees in the JLS Routing Center are accessible around the clock, 365 days a year, with an average answer time of less than 8.5 seconds.

When recruiting, Jarrett looks for candidates who embody character, integrity, honesty, and a strong work ethic. "You can train someone to do a specific job, but you can't train someone to be honest and hardworking," Jarrett says.

When new employees learn the company's processes, procedures, and technology platform, they also learn "the why." "That is, why do you come to work every day?" Jarrett says. "There's a sense of purpose, a passion in working here."

With this foundation, employees understand both the business functions with which they'll be working, as well as the way Jarrett cares for its customers. "Customers do business with us because they not only value the services we provide, but they also know us, like us, and trust us," Jarrett says.

Through a "mass customization" approach, Jarrett tailors its services and technology—such as jShip, its proprietary and cutting-edge transportation management system—to best meet the needs of each customer.

For instance, Jarrett helped a large client in the rubber industry eliminate most of its safety stock. To achieve this, its systems provide complete visibility to all goods coming from suppliers, as well as their forecast arrival dates.

The result? "The company no longer needs large amounts of safety stock when scheduling production," says Matt Angell, vice president, logistics operations.

Jarrett manages the returns logistics process for many of its consumer packaged goods clients, and helps them with OTIF—the on-time, in-full metric that many retailers use to score their suppliers. Jarrett can manage the delivery process with the precision and efficiency required to comply with OTIF, helping clients avoid costly penalties and fines.

As part of its commitment to remain at the forefront of technology, Jarrett is implementing new software with AI capabilities. An algorithm quickly analyzes customers' shipping patterns to predict future behavior. By leveraging this information, they're able to shift to lower-cost options. "We're excited to be at the forefront of this technology," Jarrett says.

Jarrett's dedication to cutting-edge technology and exceptional customer care helps explain why the company has earned a spot on the Inc. 5000 Growth List 14 times—an accomplishment only five other businesses have under their belt.

It's safe to say few 3PLs trace their roots to a 19th-century paper company, and Sunset Transportation is proud of its industrial history. More than 100 years after John R. Williams and Melville C. Libby formed Williams Paper, a family-owned business still operating today, Jim Williams—John's grandson—leveraged the company's fleet of trucks to start a successful backhaul program. With that, he entered the logistics field, bringing a strong focus on high customer service and family-style values.

The program Jim created grew so quickly that in 1989, he left Williams Paper to open Sunset Transportation, now a thriving 3PL based in St. Louis, Missouri, with seven branch offices throughout the Midwest and southern United States, along with over 40 agent offices nationwide.

Jim serves as chief executive officer and his daughter, Lindsey Graves, now runs the company as chief operating officer. She has grown from the bottom up, working through all departments for the past 15 years and was a finalist for the 2019 Distinguished Woman in Logistics Award, sponsored by the Women in Trucking Association, the Transportation Intermediaries Association, and

While Sunset traces its roots to the 1800s, it has always focused on driving shipper innovation, as shown in its LOGIK platform, scheduled for full release in late 2019. A proprietary, web-based portal, LOGIK offers shippers unprecedented visibility to both their domestic and international shipments, across all stages of the freight lifecycle, including shipment history, in-transit tracking and shipment status, and freight audit and payment analytics.

By providing on-demand visibility to all domestic and international modes, even before pickup, shippers can address non-compliance and overspend before they occur. Historically, shippers often had to wait several weeks after a shipment concluded before they could access post-shipment analysis and reporting.

"We wanted to get ahead of common issues by creating a dashboard that's dynamic, actionable, and cutting-edge," says Tracy Meetre, vice president of sales and marketing.

To meet its goal, Sunset partnered with Information Builders, which helps companies leverage data and analytics to drive digital transformation. Together the companies created a data warehouse and portal that merges data from multiple systems, enabling shippers to see their shipments in transit. "Customers can identify any shipment's location on a responsive map and watch the shipment as it travels across the water," Meetre says.

LOGIK also can sound an alert if, for instance, an employee is initiating a shipment with a non-preferred carrier, incurring additional costs. While the shipper may still choose to use the carrier, it's an intentional decision. "We provide information that's upfront and actionable," Meetre says.

Moreover, Sunset can provide this state-of-the-art technology to customers that may have assumed such tools were outside their budgets. Because Sunset is smaller than some other 3PLs, its overhead also tends to be lower. Yet as shippers grow, Sunset's technology and culture are nimble enough to scale alongside them.

Sunset employees want to "make the person who engages our services look like a superhero," Meetre says. They do this by building strong partnerships and leveraging robust, accessible tools and analytics that help clients take an intelligent approach to managing their supply chains. Some of Sunset's customers have been with the company for generations. "We invest in them and become extensions of their organizations," she adds.

Over the past decade, LFS, Inc. has "built a spirit of entrepreneurship, which now defines our culture, along with creativity, passion, commitment, attitude, and teamwork," says Andres Lopera, chief executive officer and integrator with the Florida-based firm. "We engage shippers in the way, shape, and form they ask, and are committed to providing substantial, differentiated value to their supply chains."

This approach has helped propel LFS from five to more than 200 teammates. Along the way, it has helped its partners improve their ground transportation processes and productivity in the United States, Mexico, and Canada, with Europe as a recent addition.

While LFS remains largely focused on transportation operations, it has also opened sister companies with different focuses. This includes SKHOLL, a cargo insurance broker underwritten by some of the biggest names in the industry.

LFS also offers a unique loyalty program, LFS Rewards, through which shippers accrue rebates and value-adds like insurance coverage and credits to offset their accessorial charges, all at no additional cost. What's more, shippers don't have to hit a spend tier to activate LFS Rewards.

LFS has long offered shipper-specific, real-time pricing for all modes of over-the-road transportation. To accomplish this, LFS draws from its comprehensive database of full truckload (FTL) rates that can be searched, or fed via API, in live production.

LFS' internal Quality Assurance (QA) team ensures adherence to both shippers' and LFS' processes and expectations. QA teammates maintain live visibility of all operations in progress. As a result, they can quickly identify divergences and coordinate with the LFS operations teams to return an operation to proper functioning.

Recently, LFS went through a vendor compression process with an existing partner that had been working with 60-plus truck brokers. Not surprisingly, this approach bloated its transportation costs and degraded operational performance, with no consistency in dispatches or lane awards.

LFS is one of four 3PLs remaining with the company. Because of this consolidation, the shipper improved on-time performance by 7% and boosted billing accuracy and timeliness by 14%, among other benefits. "The consolidated vendor scope allows them to focus on process adherence and consistent performance against those processes across vendors," Lopera says.

Technology continues to be LFS' primary investment, with a focus on business intelligence and the graphic user interface of all its platforms. "As we add more functionality, we also add more simplicity, so users can find the data they're seeking with as few movements as possible," Lopera says.

Unlike some brokers that focus on the number of offices and head count, LFS prefers to strategically place sales personnel who work remotely and, when requested, ops personnel who act as in-house team extensions of its partners. Keeping costs in line is key, Lopera says, given the likelihood of continued margin constrictions and greater use of technology. At the same time, the services offered by 3PLs will, ideally, be more bespoke.

"LFS is well poised to crush performance expectations with customized service, innovative solutions, and a very attractive cost structure," Lopera says.

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Sunday, August 16, 2020

Empowering Smallholders To Access the Supply Chain

By Jeandré van der WaltAugust 16, 2020 8:21 am

Black smallholder farmers are often excluded from the supply chain due to high barriers of entry. A fund established by Tiger Brands is now trying to address this problem. Mary-Jane Morifi, chief corporate affairs and sustainability officer at Tiger Brands, spoke to Jeandré van der Walt about the company’s plans to empower these farmers, as well as black suppliers and distributors.

Smallholder farmers frequently lack advanced farming skills as well as machinery and equipment. Tiger Brands intends providing their member farmers with rigorous training as well as access to finance in order to buy equipment.
Photo: FW Archive

What is Tiger Brands’ enterprise supplier development fund, and why was it started?

We established it to drive our enterprise and supplier development agenda. The fund, which is called the Dipuno Fund, will support black smallholder farmers, with particular focus on women, black suppliers providing goods and services within the supply chain, and black distributors supplying the market with Tiger products through its value chain.

Tiger Brands wants to help these farmers develop a solid asset base and liquidity to enable their operational and technical capability to deliver on market opportunities.

The Dipuno Fund was established against the backdrop of a serious lack of access to finance for many black suppliers of Tiger Brands (including smallholder farmers) and Tiger Brands distributors.

This has had a negative impact on their ability to supply goods and services to Tiger Brands, and distribute Tiger Brands products.

With the Dipuno Fund, R100 million was set aside to provide corporate and micro-financing support, while a portion of this was invested in providing non-financial support, such as connectivity, office space, mentorship, training, and business and management systems.

How will the farmers be chosen? Are there specific criteria to meet?

They will be selected based on their skills and experience. It’s imperative that they all have basic farming skills and experience. They must also have access to farmland, as well as water and electricity.

Farmers operating in areas closer to Tiger Brands’ supply chain network will also be selected. In some instances, we’ll also look at farms that have access to a warehouse and/or vehicles, which the farmers either own or lease.

What are some of the biggest challenges faced by small-scale farmers trying to enter the value chain, and how do you plan to address them?

Security of land tenure and lack of finance are probably the main challenges. In addition, they lack adequately sized land that would enable them to move towards commercialisation.

These farmers also don’t always have access to farming mechanisation, farming equipment, infrastructure and tooling, which can hinder production. They also have a need for farming skills.

With this fund, Tiger Brands will address some of these challenges by facilitating procurement from smallholder farmers directly and also through agricultural aggregators. We’ll also provide access to finance in order to fund input costs, mechanisation and infrastructure.

Each member farmer will go through a rigorous training schedule. This will include agricultural training and mentorship, and business management and back office training and support. They will also receive business management tools such as a financial accounting system, and human resources and payroll systems.

We’ll support farmers with access to farming properties to link them to leasing opportunities.

What controls and mechanisms will be put in place to ensure that limited funds will be distributed and applied optimally?

Proper due diligence will be conducted for all fund applications. To ensure that the funds are applied for their intended use, and that the beneficiaries derive benefit, all funded beneficiaries will be audited annually. We’ll also monitor the commercial performance of each beneficiary on a quarterly basis.

Has Tiger Brands been involved with similar projects in the past, and if so, what results did they deliver?

Yes, we’ve already supported 58 wheat and oats farmers in North West and the Western Cape with technical support and input finance. The guaranteed offtake agreement for their produce had assisted many people, directly and indirectly.

What needs to be done to lower the barriers of entry for smallholder farmers to formal markets and value chains?

Formalising integration of smallholder farmers is probably the most important task. This includes company registration, compliance and certification. However, it’s also important that these farmers receive the necessary support, such as business skills and help in understanding commercial agriculture.

Exposure to procurement divisions is also critical, as this is the backdrop of commercialisation capacity-building.

To achieve this, big corporations such as Tiger Brands need to play a linkage role between smallholder farmers and the commercial sector.

We need to target the agricultural mega aggregator’s suppliers – the new, expert, black-owned farming companies who work directly with farmers to provide technical and management skills – in order to incorporate smallholder farmers in their procurement volumes and growing plans.

We want smallholder farmers to operate in collectives in their areas and clusters in order for them to be able to produce the quantities that we require as Tiger Brands.

As smallholder farmers, they’re not able to deliver to the scale we need, as they produce too little on their own and are thus unable to penetrate our supply chain.

When aggregated, however, they can fulfill the tonnage we require because of scale of land and productivity, as well as the quality we require, because they will receive technical and agrarian support, and thus can enter the supply chain.

Email enterprise&

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Friday, August 14, 2020

The Unsung Heroes of The Pandemic

The unsung heroes of the pandemic – supply chain managers 

Curtis Lancaster’s job is to make sure Dartmouth Hitchcock Health system, including all its buildings, five hospitals, and 1,800 employees have att the supplies and personal protective equipment they need.

Concord Monitor

To do Curtis Lancaster’s job, you need to be a little paranoid, he said.

Lancaster works for Dartmouth-Hitchcock Health, a system that has more than 1,800 providers across the state and touts being the largest private employer in New Hampshire.

He is responsible for making sure all of the buildings, including five hospitals, are stocked with anything and everything they might need — every piece of linen that touches a stretcher, every glove or mask donned by a doctor, every contractor that shovels snow or washes laundry.

The supply chain team is constantly bringing new supplies to the warehouse, shuttling items to hospitals, and picking up soiled sheets (in a year, they clean about 4 million pounds of laundry).

As vice president of the supply chain, Lancaster’s job is to anticipate any event that could jeopardize the stockpile of supplies. Or, as he puts it, “scan for the boogeyman.”

Each product is manufactured and shipped from various parts of the world, creating a seemingly infinite number of global events that could deplete essential materials.

In the early months of Lancaster’s debut in the health care industry at United Parcel Service, SARS made national headlines. UPS desperately scrambled to find N95 masks for their employees. At that point, Lancaster didn’t even know what an N95 mask was.

“That sort of left an indelible mark on my psyche,” he said. “Everywhere I’ve been, I’ve tried to prepare for whatever the next thing was.”

Lancaster had been anticipating some disaster that would put a strain on his stockpile.

He didn’t know exactly what form the disaster would take. It could be a chemical attack, a natural disaster, or — his worst fear — a disease. To prepare, he made his team do extra emergency drills to ensure they knew what supplies they had stocked inside and out.

He also partnered with a resiliency mapping service that constantly sends notifications to his phone about world events that could have an impact on his supplies — a new CEO at a manufacturing company, a volcanic explosion, a worker strike. He then matches these events to an expansive database of where his supplies are manufactured to see if it will impact his hospitals.

Lancaster sees the world in terms of medical supplies. Every news story can be traced back to an item in his warehouse. For example, any current event involving Thailand, one of the few countries that have rubber trees readily available, makes Lancaster immediately think about surgical gloves.

“When I see something in Thailand, I think, ‘Holy smokes, are my gloves OK?’ ” he said.

Yet, for even someone as vigilant as Lancaster, COVID-19 was a shock.

“I knew something was going to happen and I wanted to be prepared and was not,” he said. “Nobody could have anticipated what happened.”

On Jan. 3, months before ‘COVID-19’ was in the public’s vernacular, Lancaster’s phone buzzed with a notification — there was an emerging pneumonia-like virus spreading through Wuhan, China.

He and some of his supply-chain colleagues were worried, as many of their supplies, like hospital gowns, were manufactured in the city. Furthermore, this was happening right around the same time as Cardinal Health, a large health care supplier in the United States, recalled several products. Lancaster began strategizing and planning how he would find new suppliers. Slowly, an even more grim possibility dawned on them.

“We noticed, holy smokes, the Chinese New Year is happening,” he said. “Wouldn’t it be horrible if this virus spread?”

Lancaster almost immediately knew what the shortages were going to be — N95 masks, isolation gowns and gloves. He started stocking up.

Quickly, his usual providers started becoming overwhelmed with orders and Lancaster was forced to scour the market to find new providers he could trust. Even if he successfully ordered materials, there were often delays at airports and ports that extended delivery times.

“What would be a normal one week delivery time started to be one month or two months,” he said.

Supply chain management also starting receiving emails from suppliers they had never worked with before, asking for upfront payments for PPE. Lancaster said he received several hundred of these emails, sometimes with counterfeit FDA certificates. In one case, a supplier offered N95 masks with the wrong type of ear strap, a telltale sign of a fake product.

“You start dealing with less than honest people,” he said.

It was sometimes difficult to distinguish from legitimate, as some companies were new to the health supply industry and needed money upfront to order the supplies themselves.

The product prices were also thrown into flux. Products Lancaster might ordinarily pay 60 cents for, were costing upwards of $10 apiece.

Faced with shortages and delays, some hospitals in New Hampshire, like Concord Hospital, started bartering for supplies.

Jodi Panzino, the director of Supply Chain Management at Concord Hospital, said every week, the medical supply distributor who supplies to Concord Hospital and several other hospitals in the area, sent an email to all of their clients, asking what they had shortages of, and what they had to offer. Supply chain managers responded, offering to trade disposable stethoscopes for goggles or surgical masks for isolation gowns.

“Everybody is trying to get supply to make sure their hospital is well-established but no one is out for themselves,” Panzino said.

The pandemic has changed her hospital’s supply chain philosophy, she said. Unlike Dartmouth-Hitchcock Health, Concord Hospital does not have a warehouse to hold a stockpile of supplies. The hospital orders supplies as it needs them and they are shipped to the facility every weekday morning. But the pandemic has exposed real problems with that system, the most glaring of which is the supply chain isn’t always stable.

“If you place an order, you might be placing an order for October or November delivery,” she said. “Not for tomorrow, like we’re used to.”

Concord Hospital is now changing its system to keep a stockpile of PPE. She knows several hospitals that bought warehouses for this purpose, as well.

Lancaster said he is grateful New Hampshire was not an early hot spot for COVID-19. It bought hospitals time to construct a new supply chain and stock up on essential items — Dartmouth-Hitchcock Health didn’t face any shortages that significantly impacted their services.

For the most part, the scramble for supplies has eased as the market for N95 masks and other PPE has become less competitive. Some raw materials are still high demand.

“From our known world, yes, things are easier,” he said.

The known world is not Lancaster’s concern, though. He is already onto the potential problems of the future, as is only appropriate for a boogeyman scanner.

Sumber :

Thursday, August 13, 2020

3PLs Coming to the Rescue

July 24, 2020 | By Karen Kroll

When supply chain and logistics trouble brews, companies summon third-party logistics providers for their expertise, technology, and dedication to customer service.

Communication, honesty and transparency, and a willingness to compromise are keys to most strong partnerships, including those between supply chain teams and their third-party logistics (3PL) providers. Communication and honesty, for instance, help establish trust, says Robert Voltmann, president and CEO of the Transportation Intermediaries Association (TIA), an industry group. In turn, trust fosters collaboration and the ability to work as a team.

An openness to change is similarly critical, say Geoff Milsom, vice president of transportation consulting with enVista, a software solutions firm based in Indianapolis, Indiana. At times, both sides want to hold onto existing processes, even when they're less than optimal. "Both need to make concessions to get to better answers," he says.

Most 3PL-shipper partnerships encompass several features not relevant in personal relationships. One is an appropriate incentive structure, Milsom says. Often, a pricing structure that works well in the first year of an engagement becomes less effective over time.

That's because many new contracts are calculated based on the savings the 3PL will generate. This tends to work well early on, as it requires little upfront investment by the shipper, while the 3PL typically can find substantial savings. Over time, however, a 3PL's efficiency increases, leaving less waste to cut. Shippers question whether they're still benefiting from continuous improvement. The 3PL points to the risk they took early on, as well as the improvements they've made. "It leads to a breakdown in the relationship," Milsom says.

Instead, Milsom advocates structuring the contract to keep the cost savings incentive in the first year or so, and then moving to a model that factors in the cost to do business, along with some level of profit. At the same time, both parties need to continue to focus on improvement.

To make this happen, many 3PLs invest in technology, people, and processes that enable them to efficiently and securely move shippers' goods. As important, shippers can access these investments on a variable, rather than a fixed cost basis.


Many 3PLs also provide a banking function, Voltmann says. TIA data shows most members pay carriers within one month, and some within one or two days. That's quicker than some shippers, particularly since the pandemic. More than 25% of respondents to a recent Gartner survey indicate they will delay payments by at least 30 days as they struggle to navigate the tightened economy (see chart).

Along with technology and banking services, the lengths to which many 3PLs will go to keep their clients' shipments on track are also key. That's the case with the decade-long partnership between Gebrüder Weiss (GW), a 3PL with expertise in the automotive sector, and Tianhai Electric North America (TENA), a manufacturer and supplier of automotive wiring harnesses.

GW manages TENA's air and ocean transportation, as well as warehousing, fulfillment, and distribution in Europe.

When one of Tianhai's ocean shipments was delayed due to weather, all but ensuring it would miss the weekly rail connection from Seattle to Detroit, "nothing short of a miracle would avoid a production plant shutdown of Tianhai's customer," recalls Merlin Dow, sales manager with GW.

GW set to work on that miracle. Dow, based in Chicago at the time, flew to Seattle and oversaw the unloading of the ocean container carrying the parts. He separated enough pallets and cartons to keep the production lines running for several days. These were loaded onto a small plane GW had chartered.

Once the plane was airborne toward Detroit, two drivers began a 2,300-mile road trip to the Motor City, transporting the pallets that remained in the truck. Because they could spell each other, the drivers made the trip in one straight shot. Both plane and truck—and the parts they were carrying—made it to Michigan in time to avoid a shutdown.

"Gebrüder Weiss went above and beyond and personally flew to Seattle to get the parts across the U.S. border and on a charter plane in to avoid shutting the lines down," says Tim Howick, executive director of supply chain management with Tianhai.

"This business will always throw you a curveball," Dow says. "The more chaotic it gets, the bigger the opportunity for 3PLs to be a lifelineand partnerfor their clients." He credits planning, constant communication, mission alignment, and trust to helping GW meet this challenge.

The two companies also work together in Europe. Tianhai faced increased transportation costs, in part because its distribution center was located in Italy, at a distance from customers and without easy access to ocean and air freight.

GW helped move the distribution center to Germany, closer to Tianhai's customer base and ocean shipments. Airfreight lead times and costs also dropped due to the greater availability of commercial airports in Germany.


Do it Best, a U.S.-based, member-owned comprehensive hardware, lumber, and building materials cooperative, and Miami, Florida-based Ryder System have worked together since the early 1980s. "Our long relationship has proven to be reliable, trustworthy, and a great collaboration," says Tim Miller, vice president of logistics with Do it Best.

From eight distribution centers in the United States, Do it Best serves about 4,000 domestic brick-and-mortar retailers, as well as retailers in 50 other countries, and e-commerce sellers. Each store receives inventory shipments at least once weekly.

Ryder employees, typically including a dispatcher and site manager, are on-site at Do it Best's warehouses and distribution centers.

Do it Best also receives support from Ryder's strategic planning efforts. At quarterly business review meetings, the two companies go over strategic initiatives and key performance indicators (KPIs).

"Our on-time performance leads the industry at about 93%," Miller says, adding that Do it Best doesn't cut itself any slack for mechanical failures or inclement weather.


Do it Best was one of the first companies to agree to test RyderShare, a new, collaborative logistics platform. Miller notes that he sometimes prefers to be a fast follower, rather than a first adopter, when it comes to technology innovations. He went ahead based on his trust in the relationship with Ryder, as well as Ryder's vision for this tool.

RyderShare facilitates collaboration between all parties involved in moving goods through supply chains, including shippers, receivers, carriers, and service providers. Historically, addressing a problem meant starting a chain of emails and phone calls that take hours or days, says Steve Sensing, Ryder's president of global supply chain solutions. By helping to identify and resolve challenges in minutes, RyderShare can boost productivity and enhance decision-making.

In the run-up to the test of the system, the Ryder team, including management and developers, spent considerable time at Do it Best's offices. "We sat side by side so they could learn our jobs and pain points," Miller says.

Do it Best launched RyderShare about one year ago. Its benefits became particularly clear during the pandemic. Sales at Do it Best rose by about one-third and have remained higher than normal.

The number of drivers, tractors, and trailers needed to move products also rose. Maintaining Do it Best's on-time delivery levels would have been impossible without the instant visibility to hundreds of routes provided by RyderShare, Miller says.

Ryder's help accessing additional trailers, tractors, and drivers—in some cases, in the wee hours of the morning—also was critical. Ryder was able to shift some drivers from retailers that had closed because of the pandemic. "They were able to find hundreds of surge drivers for several months," Miller says.

The ability to maintain consistent deliveries, aided by RyderShare, has helped Do it Best sustain its market share gains.


As the contracts to manage two finished-goods Panasonic North America warehouses were coming up for renewal, management was also discussing a shift to a more strategic approach with its 3PL partners, says Joe Haury, vice president of global logistics with the Newark, New Jersey division of Panasonic Corporation.

"This would let us align the relationship with our priorities and goals, such as Lean deployment, using data to drive decisions and leveraging KPIs to track improvement," he says.

In spring 2019, Sunland Logistics Solutions, based in Simpsonville, South Carolina, was awarded the RFP to manage the warehouses. A key reason was Sunland's "open-mindedness and willingness to understand and respond to the voice of the customer," Haury says.

From the start, the two companies have employed a collaborative approach to addressing challenges. One was the tight time frame in which Sunland would have to assume operation of the warehouses—just five months, and that included moving the warehouse operations from Aurora, Illinois, to a new location.

Robust engagement with key stakeholders from both parties was critical. This included employees not just from logistics, but also from customer service, order fulfillment, and procurement. "All were available to talk through potential challenges," says Elijah Ray, chief customer officer with Sunland.

Detailed planning was similarly key. "Along with tools like block diagrams and process flows, we planned down to the detailed SKU and inventory quantities to be transferred to the new location," Ray says.

The hard work paid off. The handoffs occurred with minimal impact to Panasonic's supply chain or customers.

Once the new team was in place, the real successes in warehouse operation have come from deploying Lean tools to address challenges and continually improve operations. To start, Panasonic and Sunland jointly hosted several Kaizen events (Kaizen is a philosophy of continuous improvement).

For several days, employees from both Panasonic and Sunland focus on an area, starting by crafting a problem statement that all parties agree captures the challenge. From this, they work to identify the root cause.

A next step is "Go to the Gemba," or observe the process under review to understand it in action. Operational problems are best solved when the team goes to the floor to see what the real issues are, Ray says.

These ongoing efforts are helping to drive sustained improvement in warehouse operations. "You can't allow operations to become stagnant," Haury says. "Incremental small changes are a fundamental principle of Lean."

As Sunland continues to focus on continuous improvement, they challenge both themselves and Panasonic. "They've been highly engaged, from top leaders to analysts," Haury says. "With a key strategic relationship, we can rely on them to make us better."

Between 2014 and 2019, the number of Iowa retail outlets that receive and sell hard liquor has grown from about 1,200 locations to 1,700. In 2018, the Iowa Alcoholic Beverages Division (IABD) decided to establish a partnership with a 3PL. "The growth in the number of outlets we had to service was so big, we couldn't do it with our existing framework," says Stephen Larson, IABD administrator.

Ruan Transportation Management Systems earned the business in April 2019. The Des Moines, Iowa-based firm handles all functions from receiving to delivery, including inventory management, picking, and staging.

The partnership is "like a well-oiled machine," Larson says. He credits preparation, including carefully outlining goals and expectations during the RFP process, as well as Ruan's fulfillment experience. "They were able to integrate operations and hit the ground running," Larson says. In fact, turnaround time improved, with most orders delivered within 36 hours.


The relationships where Ruan provides more than one service tend to be the strongest, says Marty Wadle, the 3PL's senior vice president of commercial solutions. The reason? Ruan becomes better ingrained in the shipper's supply chain, gaining an in-depth understanding of it, and enhancing its ability to make improvements.

Between Ruan and IABD, a joint "system of accountability and communication" ensures service and safety remain high, Larson says. That includes regularly monitoring and measuring on-time deliveries, breakage, and mispicks. In all areas, IABD is trending above industry standards.

As important, the partnership has allowed IABD to maintain service levels, even as the number of locations has jumped. Had IABD continued on its own, it likely would have had to take steps that would have cut into service, such as raising minimum order quantities or delivering less frequently.

The efficiencies and value 3PLs can offer their clients are helping to drive growth in the industry at a rate that tops GPD growth by several times, the TIA says. "3PLs are incented to move shippers' goods in the most efficient way possible," Voltmann says.

Sumber :

Jaringan Supply Chain Coca Cola

Apa yang membuat Jaringan Supply Chain Coca Cola begitu bagus?

Published on August 12, 2020

Strategic Supply Chain, Logistics, Customs Export Import, Procurement and Trade Compliance Consultant

Bicara tentang Coca-Cola tidak diragukan lagi sangat terkenal. Hampir ada di mana-mana. Data dari, lebih dari 10.000 botol /detik  minuman ringan Coca-Cola dikonsumsi secara global . Jaringan Supply Chain dan Logistic Coca Cola beroperasi luas dan dan lancar di seluruh dunia.

Apa yang ada di balik Supply Chain Coca-Cola? Teknologi apa yang mereka gunakan? Apa strategi Supply chain Coca Cola?

Beberapa catatan dan data untuk menjawab pertanyaaan di atas adalah ;

1.   Fokus pada Sumber Lokal

Coca-Cola beroperasi di tingkat lokal. Dari situs web resmi Coca Cola ada sekitar 225 mitra lokal pembotolan di seluruh dunia. Secara proses produksi Coca Cola hanya membuat Konsentrate, dan proses pembotolan dilakukan di mitra lokal dengan menambahkan air air, karbon dioksida, dan gula, yang semuanya bersumber dari supplier lokal. Beberapa catatan bahwa gula yang dipakai berbeda beda di tingkat lokal. Di Amerika, gula dari sirup jagung. Di Eropa, terutama gula bit. Di Asia, tebu. Dari Distribution Center lokal tersebut Coca Cola dikemas dan siap kirim ke outlet customer. Coca-Cola telah melelakukan strategi optimalisasi Local Supply Chain.

Dari sisi Lean Manufacturing dalam Toyota Production System ada 7 waste/pemborosan. jenis-jenis pemborosan itu adalah 1) transportasi, 2) Inventory, 3)Gerakan, 4)Menunggu, 5)Proses yang berlebihan, 6) Produksi yang berlebihan, dan 7) kerusakan barang.

Di dalam bahasa inggris, dikenal dengan istilah TIMWOOD (Transportation, Inventory, Motion, Waiting, Over-processing, Over-production, Defect). Tujuh pemborosan ini diperkenalkan oleh Taiichi Ono dari Jepang yang bekerja untuk Toyota dan diperkenalkan dalam sistem produksi yang dikenal dengan  Toyota Prodcution System (TPS), Coca Cola mampu menghilangkan Pemborosan dari sisi fase Gerakan dan fase Transportration dalam Supply Chain, Coco Cola melakukan strategi mendirikan pabrik di dekat tempat gula ditanam. Semakin sedikit waktu yang dibutuhkan gula untuk dikirim ke pabrik pengolahan, semakin sedikit risiko yang bertahan di seluruh proses Supply Chain.

2.   Visibilitas Monitoring Real time

Proses distribusi minuman Coca Cola secara global pastinya sangat komplek dan rumit . Tapi Coco Cola mampu melakukan monitoring proses distribusi menjadi sangat baik. Coca Cola telah berhasil melakukan perpaduan dan sinkronisasi proses bisnis agar dari titik lokasi pabrik bisa terkirim dalam waktu 24 jam sampai di rak toko pengecer.  Coca Coal mampu merencanakan, dan mengimplementasikan   proses kapan pihka Gudang dan kru bongkar muat di pusat distribusi mengetahui ketika truk yang masuk ke gudang dalam waktu satu jam.  Disini Coca Cola telah menggunakan logging yang dilengkapi GPS ke truk pengiriman. Dengan solusi ini, Coca-Cola dapat memberdayakan gudang, departemen perencanaan, dan fungsi produksinya untuk beroperasi dengan informasi yang lebih baik. Dan dapat meningkatkan pelaksanaan dengan koordinasi yang lebih baik. Dengan  mengadopsi pelacak GPS komersial, misalnya, dapat memastikan keselamatan pengemudi, mengelola pengemudi secara efisien, mengurangi biaya transportasi yang tidak perlu.

3.   Penggunaan Teknologi dalam rangka Optimasi Rute

Coca-Cola Enterprises (CCE) adalah produsen dan distributor produk Coca-Cola terbesar di dunia. Tugas CCE ini mendistribusikan konsentrat Coca-Cola ke beberapa pabrik pembotolan sekaligus mendistribusikan minuman dalam kemasan dan kaleng dari pabrik pembotolan ke Distribution Center sampai ke gerai ritel akhir customer.

Di  lapangan, CCE menghadapi banyak tantangan yang sifatnya customized. Pesanan dan outlet tertentu membutuhkan jenis dan peralatan kendaraan tertentu. Misalnya pangkalan militer membutuhkan kendaraan tertentu, sedangkan pusat-pusat di kota besar membutuhkan penggunaan jenis truk kecil. Banyak outlet juga meminta CCE untuk mengirimkan produk baik sebelum dibuka atau setelah tutup. Jadi, CCE harus memastikan  operasi logistiknya sinkron dan lancar. Dan secara internal Coca Cola perlu menetapkan semua pesanan pengiriman dalam urutan perjalanan yang benar sehingga dilakukan oleh kendaraan yang tersedia dan dengan biaya minimum dengan tetap memperhatikan semua kendala.

Solusi Coca Cola adalah menerapkan model pengoptimalan rute yang menetapkan semua gerai ritel ke perjalanan (termasuk urutan kunjungan mereka) dan menetapkan semua perjalanan ke armada truk yang ada dan pengemudi yang tersedia dengan cara yang memungkinkan CCE meminimalkan biaya keseluruhan sekaligus memenuhi semua kendala. Dengan cara perencanaan yang fleksibel yang responsif terhadap perubahan permintaan pelanggan. Rute yang efisien juga berarti bahwa jarak tempuh lebih sedikit, lebih sedikit konsumsi bahan bakar, dan lebih sedikit emisi karbon dioksida. Coca Cola mempunyai Perangkat lunak untuk penjadwalan pengiriman, memberi rute yang terbaik sambil mempertimbangkan cuaca; lalu lintas; waktu matahari terbit dan terbenam; kapasitas berat, beban, dan tinggi; zona penghindaran; belok kiri; dan lainnya. Dan, itu melakukan semua ini hanya dalam 30 detik. Perangkat dengan fitur geocoding ini secara otomatis memperbaiki alamat pelanggan yang salah yang dimasukkan ke dalam sistem untuk memastikan tidak ada pengiriman yang gagal.

4.   Direct to Store Delivery (DSD)

Coca Colam juga melakukan strategi Pengiriman Langsung ke Toko (DSD) memungkinkan Coca-Cola mengirim langsung ke toko ritel swalayan dari fasilitas produksi Coca Cola. Coca Coal telah mengurangi jalur rantai distribusi dengan memotong pusat distribusi sekunder atau tersier, sehingga stok tidak lama di Gudang tapi lama di rak took. Tentu saja ini akan  yang meminimalkan kemungkinan kerusakan, karena barang tersentuh oleh lebih sedikit perantara.

(Dari beberapa Sumber )

Sumber :

The Coca Cola Supply Chain


Talking about Coca-Cola is undoubtedly very famous, almost everywhere. Data from shows that more than 10,000 bottles/second of Coca-Cola soft drinks are consumed by consumers globally. Coca Cola's Supply Chain and Logistics network operates widely and smoothly throughout the world.

What's behind the Coca-Cola Supply Chain? What technology do they use? What is Coca Cola's Supply chain strategy?

Some notes and data to answer the questions above are;

1. Focus on Local Suppliers

Coca-Cola operates at the local level. From the official Coca Cola website stated that there are about 225 local bottlers partners around the world. In the production process, Coca Cola only makes concentrates, and the bottling process is carried out at local partners by adding water, carbon dioxide and sugar, all of which are sourced from local suppliers. Some note that the sugar used is different at the local level. In America, sugar is from corn syrup, in Europe, especially is sugar beet, in Asia, is sugar cane.

From the local Distribution Center, Coca Cola product is packaged and ready to send to the customer's outlet. Coca-Cola has implemented a Local Supply Chain optimization strategy. >>In terms of Lean Manufacturing, there are 7 wastes. the types of waste are 1) Transportation, 2) Inventory, 3) Movement, 4) Waiting, 5) Excessive processing,6) Overproduction, and 7) damage to goods. In English, it is known as TIMWOOD (Transportation, Inventory, Motion, Waiting, Over-processing, Over-production, Defect). These seven wastes were introduced by Taiichi Ono from Japan who worked for Toyota and introduced in a production system known as the Toyota Production System (TPS)<<, Coca Cola has been able to eliminate Waste from the Movement and the Transport phases in the Supply Chain from Lean manufacturing point of view. Coco Cola made a strategy of establishing a factory near where the sugar is grown. It takes less time for sugar to be delivered to the processing plant, the less risk it will endure throughout the entire supply chain process.

2. Real Time Monitoring Visibility

The process of distributing Coca Cola drinks globally is certainly very complex and complicated. But Coca Cola was able to monitor the distribution process very well. Coca Cola has successfully integrated and synchronized business processes so that from the point of location of the factory it can be delivered within 24 hours to retail store shelves. Coca Cola is capable to plan and implement a process by which the warehouse staff and the loading and unloading crews at the distribution center know when a truck arrives at the warehouse within one hour. Here Coca Cola has used GPS-equipped logging to delivery trucks. With this solution, Coca-Cola is able to empower its warehouse, planning department, and production functions to operate with better information. And It can improve implementation with better coordination. Adopting a commercial GPS tracker, for example, can ensure driver safety, manage drivers efficiently, reduce unnecessary transportation costs.

3. Use of Technology for Route Optimization

Coca-Cola Enterprises (CCE) is the largest producer and distributor of Coca-Cola products in the world. CCE's task is to distribute Coca-Cola concentrate to several bottling factories as well as distribute packaged and canned drinks from the bottling plant to the Distribution Center to the customer's final retail outlet.

In the field, CCE faces many customized challenges. Certain orders and outlets require specific vehicle types and equipment. For example, military bases require certain vehicles, whereas centers in large cities require the use of small trucks. Many outlets also require CCE to ship products either before opening or after closing. So, CCE must ensure its logistical operations are synchronized and smooth. And internally Coca Cola needs to establish all delivery orders in the correct order of travel so that they are carried out by the available vehicles and at minimum cost while keeping all constraints in mind.

Coca Cola's solution is to implement a route optimization model that assigns all retail outlets to journeys (including the order of their visits) and assigns all trips to the existing truck fleets and available drivers in a way that allows CCE to minimize overall costs while meeting all constraints. With a flexible planning way that is responsive to changing customer demands. The efficient route also means that less mileage, less fuel consumption, and less carbon dioxide emissions. Coca Cola has Software for scheduling deliveries, giving the best route while considering the weather; traffic; sunrise and sunset times; weight, load and height capacity; avoidance zone; turn left; and others. And, it does all of this in just 30 seconds. This geo-coding device automatically corrects the wrong customer addresses that are entered into the system to ensure that no delivery fails.

4. Direct to Store Delivery (DSD)

Coca Cola is also pursuing a Direct to Store Delivery (DSD) strategy allowing Coca-Cola to ship directly to self-service retail stores from Coca Cola's production facilities. Coca Cola has reduced the distribution chain by cutting secondary or tertiary distribution centers, so that the stock is not long in the warehouse but long on the shop shelf. Of course, this will minimize the possibility of damage, because the goods are touched by fewer middlemen.

(From various sources)

Wednesday, August 12, 2020

How Logistics Became an Essential Service during COVID-19

Jon Stockton looks at the unique role logistics companies have played throughout the COVID-19 pandemic and will be a key part of the economic recovery.

Jon Stockton
Jun 20

Whether delivering essential Personal Protective Equipment (PPE) around the world or supporting small- and medium-sized enterprises (SMEs) as they adapt their business operations, the logistics sector has helped ensure the global flow of goods and has provided an essential service for our society during this unique time in our history.

As lockdown restrictions begin to ease across major European cities, it is time to ask ourselves what the ‘new normal’ will look like and what changes we want to see from a pre-pandemic world. Many will see it as an opportunity to reset and re-evaluate their operating model. Too often, logistics is overlooked as a crucial cog in this model, allowing businesses, individuals, and societies to connect and grow together.

The pandemic has highlighted this need for connection more than ever before, underlining our reliance and dependence on technology to keep the economy moving. It has also demanded agility and, with over 47 years of experience in implementing contingency plans, FedEx has been able to respond quickly, making the necessary adjustments to minimise impact to our customers.

FedEx has played a critical role in transportation of COVID-19-related supplies, including but not limited to PPE, clinical trials, and medical equipment into and across Europe, and around the world. We’ve delivered over two million face masks across Norway, over five million masks from China to Belgium and have also shipped over 2,000 protective screens to shops and pharmacies across the UK, to name a few.

During the pandemic, we’ve seen the need for a connected supply chain become ever more apparent. One small breakdown in a complex network can have a major impact for businesses during uncertain times. A connected supply chain will help ensure visibility for every link in the network, allowing all parties to respond to any possible changes to the shipment. For example, the pandemic has driven a rise in demand for business-to-consumer trade, with some domestic suppliers struggling to keep up, while urgent shipment of medical supplies internationally has added to this pressure. Thanks to a connected supply chain network, FedEx has been able to prioritise handling of medical and humanitarian supplies for our partners and non-profits, while continuing to support existing customers.

As a direct result of the information-intensive nature of our operations, FedEx has been able to quickly respond to this shift in demand. We are one of the few companies globally with the capability to keep commerce moving while responding to the added demand for emergency aid. We are protecting our customers’ base volumes to the greatest extent possible and working together to find solutions, something which is especially important for the millions of small businesses that depend on us.

If recovery from this pandemic offers an opportunity to reset our ways of working, it is time to bring the essential role of logistics to the forefront of everyone’s minds. Without the agility, flexibility and efficiency of essential service providers, we would be facing a radically different situation in terms of supporting those who need it most. Robust logistical networks will continue to connect countries around the world, ensuring the flow of goods and commerce as we face an uncertain economic future.

By Jon Stockton, VP Ground Operations UK, FedEx Express

Sumber :

Tuesday, August 11, 2020

Coca-Cola’s Supply Chain and Logistics

What Makes Coca-Cola’s Supply Chain and Logistics So Great?

Coca-Cola is almost everywhere. Name a country and you will find them there. According to, over 10,000 Coca-Cola soft drinks are consumed globally per second. That’s incredible!

Also, the company tops the chart of the world’s most chosen consumer brand, according to a report by Kantar, a leading data, insights, and consulting company.

The credit for their success goes to the mammoth supply chain network of Coca-Cola and their logistics process. In fact, Coca-Cola’s supply chain management system is one of the widest and most seamless operations in the world.

But, how did they build such a powerful system?
What lies behind the supply chain of Coca-Cola?
What technologies do they use?
What’s their supply chain strategy?
Below, we answer all these questions. Read on.

Focus on Local Sourcing

Coca-Cola operates at a local level. According to the company’s website, they have 225 bottling partners worldwide.

So, the Coca-Cola drink arrives at these partner plants in the form of a concentrate. The soft drink is then prepared at the partner bottling plant by turning the concentrate into syrup and then turning that into the product by mixing it with water, carbon dioxide, and sugar, all of which are sourced locally.

The local partners can only choose the type of sugar to be used. In America, sugar from corn syrup is used. In Europe, mainly beet sugar is used. In Asia, cane sugar is used.

After all the local processes are finished, the finished product is packaged and delivered to customer outlets.

Coca-Cola mainly sources locally because it optimizes the supply chain, with the company needing to set up manufacturing plants close to where the sugar is grown. The less time it takes for sugar to be delivered to the processing plants, the fewer risks persist throughout the supply chain.

Another reason is that Coca-Cola wants to contribute to the socio-economic development in the countries where they conduct business.

Since the company places great importance in forming partnerships with the suppliers, the Coca-Cola supplier network is very strong. This allows Coca-Cola to deliver products faster to local stores.

Real-Time Visibility
The management at Coca-Cola Consolidated, headquartered at Charlotte and the largest Coca-Cola bottler in the US, realized that real-time visibility could make the distribution process better.

The challenge was that products needed to be moved from the many manufacturing units and they needed to be on store shelves within 48 hours. Often, it happened that the unloading crew at the distribution center would be sent home when inbound trucks to the warehouse were within an hour of arriving because the warehouses had no idea where the delivery trucks were.

So, the company partnered with a leading real-time visibility solution provider to integrate GPS enabled logging devices to the delivery trucks. With this solution, Coca-Cola Consolidated can empower its warehouses, planning department, and production functions to operate with better information. They can also improve execution with better coordination.

This is because Coca-Cola Consolidated now has better visibility into its own operations. They can use reliable data to communicate better with key partners, which include transportation companies in charge of the deliveries. This would not have been possible without GPS tracking.

There are also many other benefits of adopting a commercial GPS tracker. For example, you can ensure driver safety, manage drivers efficiently, cut down unnecessary transportation expenses, and save on insurance premiums. Find out how GPS tracking benefits your competitors and why you should use one.

Route Optimization Technology

Coca-Cola Enterprises (CCE) is the world’s largest producer and distributor of Coca-Cola products. It distributes Coca-Cola concentrate to some of the bottling plants. It also distributes the bottled and canned beverages from the bottling plants to the distribution centers and from the distribution centers to the final retail outlets.

It’s such a big distributor that its fleet in the US is the second-largest, after the US Postal Service’s fleet.

CCE faced numerous challenges. Certain orders and outlets required specific vehicle types and equipment. For example, military bases required certain vehicles, while the centers in large cities required the use of small truck types.

Many outlets also required CCE to deliver products either before they open or after they close. So, the time windows for delivery are really compressed. At the same time, a driver’s working hours and start time must conform to the Department of Transportation (DOT) rules about service hours. Moreover, traffic patterns in certain areas needed to be avoided, such as city centers during rush hours.

They thus needed to assign all the delivery orders in the correct trip sequence so that they are carried out by available vehicles and at a minimum cost while respecting all the constraints. CCE sought a solution that would fulfill this objective.

The answer was route optimization technology. So, CCE implemented a route optimization model that assigned all retail outlets to trips (including their sequence of visiting) and assigned all trips to existing truck fleets and available drivers in a way that allowed CCE to minimize the overall cost while satisfying all the constraints.

The results were outstanding.

CCE had a flexible planning process that was responsive to changes in customer demand. The efficient routes also meant that there were fewer miles driven, less fuel consumed, and less carbon dioxide emissions.

Also, deliveries were made on time. Because of all this, they managed annual cost savings of $45 million and improved customer service.

And it’s not just Coca-Cola. Route optimization software is a must-have for every field service business to plan accurate and fuel-efficient routes.

The best route planners only require you to input customer addresses to the system and set some parameters. That’s it.

The delivery scheduling software will then provide you with well-optimized routes while factoring in weather; traffic; sunrise and sunset times; weight, load, and height capacity; avoidance zones; left turns; and more. And, it does all this in just 30 seconds.

Also, an advanced route planner comes with a geocoding feature which automatically rectifies any wrong customer addresses entered into the system to ensure zero failed deliveries.

But, that’s not all a delivery route planner has to offer. Read the nine benefits of investing in dynamic routing technology.

Direct to Store Delivery (DSD)

Direct to Store Delivery (DSD) allows Coca-Cola Refreshments and other Coca-Cola bottlers to deliver directly to convenience retail stores from their production facilities, without going through a regional distributor.

Generally, an account manager visits the store to discuss business-building opportunities, checks the in-outlet presentation of products, and writes an order for product replenishment. The order is then delivered to the store typically within 48 hours. The driver stocks the shelves with new stock rotates the product items and fills the coolers. This process usually happens once a week, but can be more or less frequent, depending on demand.

DSD ensures that Coca-Cola products are in stock and properly displayed to drive sales. Convenience retail store owners also get the support of professionals who are dedicated to serving small format outlet owners.

Also, by cutting out secondary or tertiary distribution centers, the items spend more time on the store shelves which minimizes the possibility of damage, since the items are touched by fewer intermediaries.

You too can do DSD with the help of an advanced delivery route planner app like Route4Me.

Route4Me receives the orders directly from your order management or point-of-sale system and optimizes the routes to your direct retail locations.

Our route optimization engine takes over 20 other constraints into account, including road restrictions, weight, and the receiving store’s loading dock time windows.

It also considers volume, so you won’t cube out your vehicles. Plus, our tracking capabilities permit staff at each receiving retail locations to see where the inbound vehicles are located in real-time. This reduces dwell time at the retail locations.

Warehouse Automation

CCE uses an Automated Storage and Retrieval System (ASRS) in many of its factories.

In this way, the facilities are designed to hold and automatically move nearly 30,000 pallets through the warehouse. This doubles the site’s storage capacity and allows all manufactured products to be delivered to the customers directly.

ASRS also addresses the inadequacies of traditional warehouse systems and equips facilities to seamlessly handle finished products and track them with detailed precision everywhere from the moment they are created to delivery at the designated outlet.

In addition to automating their warehouses, Coca-Cola is using robotics and automation to overhaul its supply chain and logistics. They had integrated standardized automation into their production lines long ago.

The goal of automation is to deliver an expanded and automated operational structure with larger capacities, lower operation costs, and reduced materials handling.

You can also automate your warehouse operations by switching from barcodes to RFID tags and optimizing pick-and-pack routes. Learn how a multi-stop route planner can help automate your warehouse operations.

Performance Monitoring

A wholly-owned subsidiary of Coca-Cola Consolidated, Red Classic, which is also its transportation provider, developed a system whereby weekly Sales and Operations Execution (S&OE) calls engaged teams in reviewing past performance and addressing weekly demand and supply fluctuations.

With greater awareness of critical performance data, the teams could make a timely inventory and transport adjustments based on real-time data. This made the Coca-Cola supply chain management lean and more efficient.

Fortunately, a route optimizer comes with a reporting and analytics feature that gives you all the critical data you need to monitor your team’s performance and improve your operations. The collected data include:

Distance (Planned vs. Actual)
Stops (Planned vs. Visited)
Time (Planned vs. Actual)
Routes per Day
Average Time on Site vs. Allocated Service Time
Stops per Day (Planned vs. Visited)
Total Gas Cost
Average Trip Gas Cost
Average Gas Price

Other Reasons

There are other things that contribute to making the Coca-Cola supply chain management system great.

Focus on Innovation
The Coca-Cola Company is always ready to adopt emerging technologies. CCE  seamlessly integrates modern innovative technologies into its supply chain. For example, it uses 3D printing to manufacture bottles and cans for its drinks.

Long-Term Relationships with Retail Partners
Coca-Cola has proven itself to be one of the most valuable and reliable suppliers for its retail partners. For example, the company has been growing together with McDonald’s since 1955.

Close Collaboration with Bottlers
The Coca-Cola Company provides a standard set of guidelines for all of its bottling partners. As a result, most of the strategic decisions are centralized.

Global Supply Chain Council
One reason why the supply chain of Coca-Cola is so efficient is that there is a Global Supply Chain Council that focuses on adhering to Coca-Cola supply chain strategies.

Quality Control
Coca-Cola has strict quality requirements when it comes to manufacturing practices. For example, Coca-Cola HBC, a bottling franchise partner of CCE, requires quality, environment, and health safety certifications from its suppliers.


Following Coca-Cola’s example, many companies are constantly looking to improve their supply chains. So, they are keeping themselves abreast of the supply chain management trends.

There is a unique amalgamation of advanced technology and the right strategies that make the Coca-Cola supply chain management system one of a kind. This contributes to making the Coca-Cola company the leading soft drink company in the world.

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