Supply Chain Footprint: "Consolidate warehouse operations"
We use the term "supply chain footprint" to describe your entire supply chain from the point of goods arrival to the point of final despatch. This would typically incorporate the facilities being used to either manufacture, store or distribute goods and services rather than the transportation component. Whether these facilities are owned, operated by 3PL or leased, your supply chain manager must have an inate knowledge of all facilities, warehouses, distribution centres and fulfilment centres to understand the real cost and capability of your supply chain.
Your organisation may be planning growth through acquisition, pursuing new market segments, or simply looking to consolidate its profit position, any changes to the current supply chain model must support these strategic objectives for your business. The success of your new supply chain strategy is driven by a detailed understanding of your current supply chain. The ability to create and recreate your supply chain through 3D simulation simplifies the decision making process and avoids costly changes to your business.
SME's: "Our tips to consolidating your supply chain"
Based on our research, most SME's within Australia are focussing their efforts on growing their businesses by adding new clients, maintaining their existing customer base and investing in infrastructure integrated with technology to remain in a healthy state for the future. SME's can concentrate on consolidating their supply chain.
In a multi vendor supply chain, inventory is created to support customer demand and leadtime variability. The traditional model of inventory management creates multiple stocking points where safety stock is increased to offset this uncertainty. Improving forecasting is always problematic and will only go so far to minimise this variability. By getting closer to your customers demand decision points will allow for inventory to be made as late or purchased as possible in your supply chain reducing inventory carrying costs.
Inventory range consolidation
This is always a balance between the value proposition developed by a marketing team and the ongoing supply chain costs by carrying non working and working inventory. Rationalising a range is an emotional decision that is difficult to qualtify at times as the true value to a customer varies. Supply chain analytics is an approach that is used to make decisions on range consolidation by using fact based data over a period of time. A range versus stock tradeoffs can be achieved if the emotion is removed.
Outsource to 3PL
A difficult decision when the operation is heavily commited to extended leases on its existing supply chain footprint. Transitioning to a 3PL is a consideration as the benefits of cashlflow relief may be realised through reduced fixed costs, demand fluctuations can be more easily supported and your business can focus on core competencies rather than supply chain management. Relationship management and loss of direct customer interaction need to be carefully considered.
3rd party logistics (3PL) assessment
Scope of works
- Understanding of client requirements, planned cost and service expectations.
- Understand the existing or proposed cost base against demand patterns.
- Review of contract agreement to understand the terms of reference.
- Review of performance metrics and service capability to determine level of scale.
- Identification and selection of the right 3PL provider to support your business.
- A clear understanding of the supply chain costs and opportunities for savings.
- Formulation of a balanced heads of agreement with cost and service levers.
- Identification of shared performance improvement opportunities