Saturday, 31 May 2014

Lean Design Implementation: Strategies for Maximising Value-enhancing Levers

Maximising Strategy
Ease of disposal
Use disposable materials, modular assembly/disassembly.
Ease of installation
Simplify installation process; create modular designs and mistake-proof designs.
Ease of operation
Create mistake-proof design; simplify operation approach.
Ease of maintenance
Use modular design, access to subsystems.
Ease of product or service acquisition
Lean out the process steps so that customers can educate themselves about the product or service and easily acquire the product or service (just-in-time).
Environmentally friendly
Design for environment.
Features of the product or service
Prioritise on customer expectations and ensure that we deliver options and features customers desire.
High barrier against imitation
Obtain patent protection, copyright, trademark.
Leverage the design for new products or service
Use platform design, reuse concepts, and modular designs.
Perception and image
Develop the right image and perceived value of the solution.
Performance level of supplied functions of the product or service
These items include quality, reliability, and other performance levers. Deliver on these expectations at the correct level. Undershooting and  overshooting generates waste.

Source: Rajesh Jugulum, Philip Samuel. Design for Lean Six Sigma, John Wiley & Sons, Inc.  2008

Chit Chat: Common differences between B2B and consumer marketing

B2C Consumer
B2B Consumer
       Accept the stated price
       Negotiate on price
       Buy on impulse or with minimal processes
       Use formalised, lengthy purchasing policies and processes
       Buy in small quantities and frequently
       Buy in large quantities and infrequently
       Happy with a standardised product package targeted at a specific market segment
       Want a customised product package
     Suffer minor irritation if supply fails
       Suffer major problems if supply fails
       Find switching to another supplier easy
       Find switching to another supplier difficult
       Justify an emphasis on mass media communication
       Justify an emphasis on personal selling
       Purchase goods/services to meet individual or family needs
       Purchase goods/services that meet specific business needs
       Purchase as individuals or as a family unit
       Involve large groups in purchasing decisions
       Purchase from intermediaries
       Purchase direct from suppliers
       Emphasis on psychological benefits
       Emphasis on economic benefits

Friday, 30 May 2014

What are the 4 Key Components of the Framework in Agile Supply Chain?

  1. Agile supply chain requires virtual integration - It is necessary to leverage all the skills and resources across all the divisions in order to create an agile supply chain. The communication across these divisions and throughout the various sectors involved in the supply chain need to be seamless and instant and shared goals must be created
  2. Agile supply chains depend on the sensitivity of the market - Market sensitivity means that the internal measures are sources from the external market, not internally. When measuring data the results are often focused too highly on the internal operations, but it is necessary to ensure consumers are taken into account. Measure how quickly you’re able to get your goods or services to market and how quickly you’re able to react to changes in demand if you want to benefit from the agile supply chain process.
  3. Agile supply chains require improvements in the process integration - Internal operational processes including sales, sourcing, delivery, production and forecasting need to be integrated when creating an agile supply chain. With close integration it is easier to spot trends or problems early on so the supply chain is able to change accordingly for the good of the consumer and the organisation.
  4. Agile supply chain benefits from a dynamic network base - Managers must be better connected throughout the agile supply chain. There are two types of networks, the stable network and the dynamic network. The stable networking is the typical supply chain configuration where suppliers and buyers are formed into tiers along the chain. Suppliers have a fixed role, operational guidelines are formalised and the positioning in predetermined. The dynamic network is what is more suited to the agile supply chain as it is far more flexible. The tiers are less set in stone, independent organisations can come on board for short periods, virtual relations are increased and the different parties are bonded together rather than working on a separate playing field. It is necessary to have excellent information systems when using dynamic networking.

Thursday, 29 May 2014

Royale International at the In Bed with Designers Expo

Royale International were proud to be the nominated logistics provider for the recent In Bed with Designers expo at The Mini Hotel in Central in early May. 

The novel concept of designer displaying their goods in individual hotel rooms made for an interesting weekend for all visitors. Royale assisted in moving product from France, Macau, Malaysia, Japan, India and also locally from some Hong Kong based designers to the show. We thank the Buy Me Design team for the collaboration.

What is Agile Supply Management?

An agile supply chain requires the use of:
  • Organisational structures
  • Value chain configurations
  • Logistic processes
  • Information systems
Combine these processes with a strong mind-set and you’re on your way to creating your own agile supply chain. However, without flexibility you won’t be successful.

Flexibility is required both inside and outside of the supply chain. You need to be flexible when it comes to your own configurations and the supply chain has to delivery on time the products and the services that are viewed from the perspective of the consumer. This flexibility makes it possible to jump on short profit windows and to become the market leader through innovation.

Customer demands change quickly and it is necessary to be able to adapt to these changes as soon as possible. Organising systems based on the customer rather than focusing on beating the competition is the best route to take.

When you focus on the demands of the customer you need to listen to the market and learn what it wants, not try to force your products or services on a market that isn’t interested. Focus on customer value when using the agile supply chain, be responsive and use systems that will allow you to make changes in a way that won’t harm your bottom line. The initial set up of such processes will require investment, but the gains in the long term far outweigh the initial costs.

Wednesday, 28 May 2014

What Makes a Supply Chain lean?

There are six key points that result in a lean supply chain:

Waste Reduction
It is necessary to work hard to reduce waste if you want to create a lean supply chain. Waste comes in various forms such as time, inventory, defeats and unnecessary processes in manufacturing. Assess the waste from the perspective of the supply chain wherever possible.

Demand Management
If you want to compete in the market place you need to focus on demand management. Focus on the supply chain as viewed by your customer, ensuring excellent performance, fulfilment and satisfaction.

Process standardisation
With the standardisation of the processes it is possible to create a continuous flow throughout the company and the supply chain. Products or services shouldn’t be interrupted at any point. Use horizontal connective processes rather than vertical organisational structures and avoid roadblocks from systems such as work in queue, batch processing and in the transportation of goods.

Engaging with people
Managers must engage people, creating lean campaigns that reach throughout the organisation. Engage people through sharing intellectual assets, motivating people and creating a lean supply chain that is built to last.

Working together is essential when creating a lean supply chain. Organisations can come together and share resources, risk and information for joint success.

Once you have begun to benefit from the lean supply chain you must continue to work on improving the processes and operations. Monitoring, auditing and evaluation are essential.

Tuesday, 27 May 2014

What are the Current Trends in Global Supply Chain Management?

The global supply chain is experiencing some clear development trends that are shaping the operations involved. These trends are as follows:
  • Supply chain volatility is increasing. As a result of fast changing demands and uncertainty in the markets it is necessary for the supply chain to continue focusing on being flexible and having fast response times.
  • Market growth is dependent on the global customers as well as the supplier networks. Outsourcing and reducing in house facilities is expected to continue to decline while outsourcing and the use of off shore international contractors is expected to rise. It adds value and creates a more consolidated supply base.
  • Cost optimised supply chain configurations are expected to increase over the next couple of years. The gains are going to be from a reduction in the cost of the end to end supply chain using outsourcing as a function that will control the costs efficiently.
  • Risk management involves the end to end supply chain with trends moving towards placing risks from one part of the chain to another. The practices used to effectively mitigate the risks in the end to end supply chain include inventory management, joint production and resource planning and improved deliveries for customers.
  • Placing more emphasis on supply chain integration and empowerment allows action to be taken when necessary. Being able to make decisions down the chain requires improvements and supply chain managers require leading roles in how the business develops.

Monday, 26 May 2014

How global supply chain can respond to global challenges by using common approaches

When it comes to surviving the global supply chain it is necessary to work collaboratively. Joining forces together to achieve the common goal makes the challenges less daunting. When facing the global challenges there are obvious reasons supporting the use of collaboration. 
  • Sharing the resources – when two or more firms join forces they are able to make use of the complementary resources and avoid duplication of the more expensive resources such as the equipment, services and maintenance facilities that can be a drain on capital. Other resources including knowledge and intellectual resources that can be extremely valuable and beneficial.
  • Achieving synergy – synergy is when two or more things join together and come up with a result that wouldn’t be possible without the collaboration. Synergy in a business collaboration results in adding value to each side that couldn’t have been achieved if working separately.
  • Sharing risk – Negative impact of the risks from the supply chain can be reduced thanks to the sharing.
  • Innovation – blending experience, knowhow and resources helps collaborative businesses come up with new, innovative ideas.
Supply Chain Integration is required in order to spread the global supply chain over the rest of the world. This is when internal and external coordination are shared between members, using high visibility and short lead times with high quality products. This is a common supply chain approach that is able to withstand the challenges.

Divergent Product Portfolio is a strategy that follows the old saying ‘don’t put all your eggs in one basket.”. With divergent product portfolios it is easier to satisfy the demands of the market on a global scale.

Blue Ocean Strategy is when the head on competition is no longer competed against; instead they work together and reach the market without battling it out. Instead of focusing on the competition learn the market and find your own place in the uncontested market place.

World Class Excellence should be the goal of all businesses when using the global supply chain. The business should be performing at a global level and devised to stand the test of time by excelling in quality, productivity, cost effectiveness and efficiency along with excellent customer services.

Saturday, 24 May 2014

The Supply Chain Operations Reference (SCOR) Processes

Demand/Supply Planning and Management
·      Balance resources with requirements and establish/communicate plans for the whole supply chain, including Return, and the execution processes of Source, Make, and Deliver.
·      Management of business rules, supply chain performance, data collection, inventory, capital assets, transportation, planning configuration, and regulatory requirements and compliance.
·      Align the supply chain unit plan with the financial plan.
Sourcing Stocked, Make-to-Order, and Engineer-to-Order Product
·      Schedule deliveries; receive, verify, and transfer product; and authorize supplier payments.
·      Identify and select supply sources when not predetermined, as for engineer-to-order product.
·      Manage business rules, assess supplier performance, and maintain data.
·      Manage inventory, capital assets, incoming product, supplier network, import/export requirements, and supplier agreements.
Make-to-Stock, Make-to-Order, and Engineer-to-Order Production Execution
·      Schedule production activities, issue product, produce and test, package, stage product, and release product to deliver.
·      Finalize engineering for engineer-to-order product.
·      Manage rules, performance, data, in-process products (WIP), equipment and facilities, transportation, production network, and regulatory compliance for production.
Order, Warehouse, Transportation, and Installation Management for Stocked, Make-to-Order, and Engineer-to-Order Product
·       All order management steps from processing customer inquiries and quotes to routing shipments and selecting carriers.
·      Warehouse management from receiving and picking product to load and ship product.
·      Receive and verify product at customer site and install, if necessary. Invoicing customer.
·      Manage Deliver business rules, performance, information, finished product inventories, capital assets, transportation, product life cycle, and import/export requirements.
Return of Raw Materials (to Supplier) and Receipt of Returns of Finished Goods (from Customer), including Defective Products, MRO Products, and Excess Products
·      All return defective product steps from authorizing return; scheduling product return; receiving, verifying, and disposition of defective product; and return replacement or credit.
·      Return MRO product steps from authorizing and scheduling return, determining product condition, transferring product, verifying product condition, disposition, and request return authorization.
·      Return excess product steps including identifying excess inventory, scheduling shipment, receiving returns, approving request authorization, receiving excess product return in Source, verifying excess, and recover and disposition of excess product.
·      Manage Return business rules, performance, data collection, return inventory, capital assets, transportation, network configuration, and regulatory requirements and compliance

Source: Supply Chain Excellence, Bolstorff & Rosenbaum 2003

Friday, 23 May 2014

What are the strategic, operational challenges of a global supply chain in a changing global business environment?

Strategic challenges that have an impact on the global supply chain and may varies from industry to industry. Listed below are some challenges:

Marketing dimension – Customer demands are a challenge as they fluctuate and change quickly. It’s necessary to be able to manage lead times and capacity synchronisation to try and control the global supply chain efficiently.

Resource Dimension – New resources can be found all over the world and these must be looked at to see if time and money can be saved. Current resources used by the firm must also be examined to ensure they yield economic outputs. Resource deployment often poses problems including finances, workforce, materials, infrastructure, assets and so on. The global supply chain opens new doors to new resources beyond local and national opportunities.

Technology Dimension – Apply technology in ways that will benefit the supply chain management and overall business competitiveness is essential. Discovering and implementing new technology can be a challenge especially when working together with multiple suppliers and providers.  Technological dimension challenges refers to the development lead time, disruptive technology and the supply chain network challenges.

Time Dimension – Time plays an essential role in the global supply chain challenges. Time differences can make or break the chain and it is usually the one who takes the least time getting to the market who benefits the most. It’s essential to be agile and responsive to the market.

Thursday, 22 May 2014

What are the Key Characteristics that a Global Supply Chain must recognise in a Global Business Environment?

Borderless – Borders no longer cause physical boundaries when it comes to sourcing, delivering, marketing and manufacturing thanks to the globalised supply chain.

Cyber-connected – the business environment is more connected these days thanks to cyber connections.

Deregulated – fair completion and level playing fields have been created thanks to economic and free trade zones that can be found all over the world. The deregulation has simplified the process boosting global economic growth.

Environmental Concerns – being more environmentally conscious has resulted in a move towards sustainable business strategies and this is now an important part of the global supply chain.

Social Responsibility – Being aware of the social environmental impact is part of a business’s responsibility. Social pressures need to be taken to the heart of the company in all areas including purchasing and the supply chain.

Wednesday, 21 May 2014

How to Assess Your Warehouse Operations

Warehouse operations need to be assessed in order to spot issues that could result in loss of money for the company. The job is quite a large one, but it can become more manageable by breaking it down into smaller parts.
  • Evaluate the space by working out the cubic feet of storage you have available and consider how you’re making use of the space.
  • Check your critical inventory levels and set a level by averaging how much products you keep each month plus safety stock.
  • Is time wasted walking to and from stock? Work out the best place for your pick locations that will reduce time pickers take to get around the warehouse.
  • Consider the benefits of bar code technology and how it can help speed up the work processes and track products.
  • Do you have options to expand? Use your sales forecasts as a base and see how much extra stock could be stored at your current warehouse.
  • Look at how you’re storing your stock. Would it be possible to consolidate locations, reduce spreading and avoid delays in filling orders?
  • Are the vendor package products affecting your operational costs?
By focusing on these areas you will be able to discover where time and money is being wasted in your warehouse.

Tuesday, 20 May 2014

What You Should Know When You Outsource Your Ecommerce Order

Outsourcing your ecommerce order fulfillment is an option you have open to you. It’s a common practice because it has many advantages including saving money and time. If you’re considering using this option here are some things you need to know before you start.
  • Ask about the information you’ll be provided. Will you know real time inventory levels? Will you be given a break down on all costs? What will you be charged? Are there software and management systems available and how users friendly are they?
  • Consider the location of your third party providers as location will matter. Will the location result in longer shipping times to your customer?
  • Pick a firm that specialises in order fulfillment and make use of their experience and knowledge.
  • Use a company that owns the warehouses rather than renting.
  • Will the fulfillment provider be compatible with your business model? Will they be able to store and ship the amounts you need each month?
  • Can the provider offer you scalable services? Will they be able to grow as your business grows? Will they be able to support you as you approach new markets?
  • Be prepared to pay for the services, often low costs are associated with inexperienced firms. You get what you pay for.
  • Will a high level of service be provided to you? Can the providers guarantee you on accuracy and shipping times? What are their policies?
  • Customer service is essential and you need to ensure you are given quality customer care.
  • What will you get for your money? Check to see what services are included, what additional services are available and at what cost.