Monday, 30 June 2014

Product Inspection… Why Inspection?

What exactly is production inspection and why is it necessary? Inspection takes place during various stages of production to determine what has been to what should have been produced at that stage by referring to the standard specification, drawing or a visual quality standard.  By using suitable measuring instruments and checking appropriately, it is important for the inspector to invest more time on those which are more complex processes and less time on those that are less prone to go wrong. 

A common fallacy of product inspections is that the product quality falls solely on the inspector but this misconception is incorrect as quality is also dependent upon the original designs of the product, methods, materials and equipment that are used along with the skills and the attention of the operator. Without these quality elements, quality cannot be corrected by the inspector.

There are different type inspection forms according to production flow; we will look at these different areas of inspections flow over the next few days:
  • Incoming inspection
  • In-process inspection
  • Final inspection

Saturday, 28 June 2014

Benefits for Retailers’ and Suppliers’ Quick Response (QR)

Retailers’ QR Benefits
Suppliers’ QR Benefits
·         Competitive advantage
·         Competitive advantage
·         Customer satisfaction
·         Closer ties to retailers
·         Faster merchandise flow
·         Frequency of orders
·         Increased sales
·         Ability to monitor sales
·         Reduced costs
·         Reduced costs
·         Reduced inventories
·         Predictable production cycles

Source: Quick Response Services, 1995

Friday, 27 June 2014

What are the Key Principles of Six Sigma Lean Design?

Instead of just reducing waste during manufacturing or service delivery, the key principles of lean design is to create products, processes and services that will prevent waste.  There are two categories of lean thinking, these are:

1)     Design process improvement through lean principle applications

2)     Produce products, processes and services that are lean by design

Applying the lean principles to the design processes involves identifying and removing waste from the design process to create a more agile design and reduction of times it take to market.   By mapping out the current design process and meeting the stakeholder’s expectations, this allows room for waste analysis and help with identifications of opportunities. All waste is removed and non-value adding activities are stopped.

Products, processes and services are created lean by design to maximize customer’s value and built with the least amount of waste opportunities. A good understanding of the stakeholder’s value lever and what processes deplete the value of stakeholders are important.

Here are a few examples of non-value adding processes and activities for stakeholders to avoid or reduced where possible:
  • Difficulties with storage and operation
  • High costs of service delivery
  • High skill needed to use
  • Material s with high cost and low availability
  • Multiple tests and inspections
  • Not environmentally friendly
  • Sensitivity to noise and variations

Thursday, 26 June 2014

What is the 3P (Production, Preparation. Process) Approach in Lean Design for Six Sigma?

Toyota was responsible for popularising the 3P approaches, which concentrates in Production, Preparation and Process. The approach prevents waste by simultaneously performing the design and production processes. By combining the processes it is possible to create a lean manufacturing system that has the following characteristics:
  • Pull Systems – This is when the customer signals the pull systems resulting in production fulfillment. It improves the speed of the processes, reducing product manufacturing times and eliminates waste.
  • Work Cell –Integrated flow lines and work cell systems advances on the pull system resulting in further improved efficiency and reduced waste. Processes and movements that are wasteful and unnecessary are eliminated.
  • One Piece Flow – One piece flow is used instead of batch processes. Inventory is minimised and customers receive a faster service.
The lean design is only achievable by creating simultaneous progression thorough the product design and the production processes. Throughout the stages the information is shared and evaluated. The lean design has a separate evolution from the Six Sigma approach but these have no converged into one. They both work to reduce costs, lead times and result in benefits for all.

Wednesday, 25 June 2014

What are the Potential Threats and Concerns on Healthcare Supply Chain - Part Five

Full Loads

Optimisation distribution is one of the ways costs can be reduced in the supply chain and efficiency improved. By consolidating loads and shipping only full truck load money will be saved and the frequency of the shipments reduced from several a week to just one or two. 

In order to save money healthcare providers are reducing the need to use expedited freight services by using the full truckload process. They are collaborating with their key suppliers and coming up with a freight network solution which is changing the face of healthcare logistics.

Another challenge relates to security, especially those in charge of global healthcare supply chains. According to a recent survey the cost of product security was the second biggest concern in 2013. The main areas of concern were the sophistication of counterfeiting and a poor visibility within the supply chain.

Systems need to be introduced that will reduce the risks to the security of the products. Options include the introduction of software management systems, tracking and systems that will help the industry track the reliability of the suppliers.

With so many concerns and threats the healthcare industry need to come up with long term solutions and focus on bring their logistic processes up to par with other industries around the world. Improving visibility, making the supply chain leaner and increasing security will all need to be addressed.

Tuesday, 24 June 2014

What are the Potential Threats and Concerns on Healthcare Supply Chain - Part Four

Healthcare at Home

One of the other trends that the healthcare industry is facing relates to technological advances. Thanks to technology more patients are able to receive care from their homes, helping to reduce the need for frequent visits to the Dr. Patients are able to get help by using portable devices that will check vital signs in the home. The data is sent directly to the Dr, who is then able to monitor levels in areas such as blood pressure, brain waves and glucose for example.

Healthcare and technology together are expected to reduce the number of hospital visits and the length of hospital stays dramatically in the future. Providing healthcare products directly to the home is therefore expected to grow. In order to meet the new demands and expectations the healthcare providers will need to work on improving the distribution of their products, be able to deliver quickly at low cost and reduce the errors that occur. Additionally this trend will require the healthcare providers to be up to speed with the latest technological tools.

Monday, 23 June 2014

What are the Potential Threats and Concerns on Healthcare Supply Chain - Part Three

How to Deal with Inefficient Supply Chains

Inefficient supply chains are one of the contributing factors that increase the costs in the healthcare industry. These costs are often unnecessary and with good management the logistics side of the industry offers opportunities for costs to be reduced and efficiency to be improved all with reasonable running costs.

One of the major problems is the high rate of errors that relate to the medical devices procurement processes. Industries usually combat problems with error rates by using electronic ordering, accuracy controls, product scanning and a number of other processes that the healthcare industry is yet to implement.

The healthcare industry including the providers, manufacturers and distributors need to re-work their systems, update from manual to electronic and create a more sophisticated system in order to reduce the running costs, reduce errors and improve overall efficiency. With electronic systems the collection and recording of data will also have fewer errors, saving time and money.

Saturday, 21 June 2014

Comparison between Supply and Demand Chain

Supply Chain
Demand Chain
  • Cost is the key driver

  • Cash flow and profitability are the key drivers

  • Efficiency focus, cost per item

  • Effectiveness focus; customer-focused, product market fit

  • Focuses on immediate resource and capacity constraints

  • Focuses on long term capabilities, not short term constraints

  • Historical focus on operations planning, and controls

  • Historical focus on demand management and supply chain alignment

  • Processes are focused on execution

  • Processes are focused more on planning and delivering value

  • Short term oriented, within the immediate and controllable future

  • Long term oriented, within the next planning cycles

  • Typically the domain of tactical manufacturing and logistics personnel

  • Typically the domain of marketing, sales and strategic operations managers

Source: Langabeer and Rose, 2001, in Walters, 2006b

Friday, 20 June 2014

What are the Potential Threats and Concerns on Healthcare Supply Chain – Part Two

One of the major concerns found in the healthcare supply chain is the uncertain regulatory environment. This is a top concern and therefore one that needs to be dealt with quickly and efficiently as and when the regulations and compliance demands change, which they do and will continue to do on a frequent basis.

There are several factors within the industry that heighten this concern, such as:
  • Safety of patients, security
  • Cross border controls
  • Temperature sensitive products
One of the major issues is the healthcare companies’ lack of in-house knowledge that would help them to comply with regulations concerning security, environment and safety. Outsourcing is proving to be essential as the companies are able to draw on the expertise of the third party logistics providers so they’re able to understand and follow the regulations and run an efficient supply chain that is flexible to change. 

It is also thought that if the FDA in the US and the Customs and Border Protection push for computerised and streamlined operations the healthcare companies would improve their systems and supply chains along with working with the 3PL’s.

Thursday, 19 June 2014

What are the Potential Threats and Concerns on Healthcare Supply Chain – Part One

The cost of healthcare is increasing at an alarming rate. With this in mind it is vital that supply chains are efficient and regulated and that security concerns are managed. Optimised logistics helps to keep the costs under control and therefore it’s an area that cannot be pushed to the side – controlling costs now involves logistics.

Healthcare businesses must try to save money wherever they can. One of the reasons for this is the ever rising costs in research and devilment, which have quadrupled over the last three years. Supply chains is an area of the business that could be leaking money needlessly, which is why it must be looked at, evaluated and managed effectively to stop the financial haemorrhage.

The healthcare companies had always had healthy margins, but the increased costs are now threatening those margins. Managing operations is essential and healthcare companies also have to improve their visibility across entire supply chains and ensure all their decisions make sense down the lines.

With increased regulation, problems with the inefficiency of supply chain and the concerns surrounding security now plaguing the industry we will be looking at ways health care companies are now finding solutions with their supply chain partners to combat the problems.

Wednesday, 18 June 2014

How to Select WMS – Part Three

We have reached the final day of our series on how to select your warehouse management system. Let’s get straight to it and look at the final three steps that will help you to make the perfect decision when upgrading your system.
  1. Prepare the Request for Information Document - Your RFI document needs to describe your business, the future goals and direction of the business, the warehouse and the future direction and plans for your warehouse. It doesn’t need to be a huge document, just a few pages will do. Remember to include what you want the WMS to help you to achieve. Ask the suppliers for information such as the budget costs, time frames and the number of other sites that use their WMS. When you have completed your RFI send it around to at least six to ten suppliers.
  2. Your Short List - Once you have the replies narrow them down to no more than five suppliers and don’t make the price your main criteria at this time so long as they are within budget. Ask the suppliers for an informal meeting and check each supplier for compatibility and suitability. Ask for their references and call at least six of them for feedback. Don’t make any decisions until you’ve had demonstrations and you’ve visited the head office.
  3. Your Decision - When you have completed the steps you will have enough information to go ahead and make the right decision for your business and your warehouse.

Tuesday, 17 June 2014

How to Select WMS – Part Two

Today we’ll be looking at the first four of seven steps on how to select your warehouse management system. You must be able to justify your investment as it will be used as a business improvement strategy that requires energy, time and capital. These first four steps will help you to decide upon the best solution for your warehouse.

Calculate the return on investment
Set your budget and decide what you have to have as part of the WMS and which of the features you would like but that you could do without. The main areas include: reducing errors, improve traceability, increased productivity and cost savings and improving customer service.

The Process Decision

The great thing about modern WMS is that they can be configured to suit you and the type of warehouse and system you have. You can configure using ITT documents that are downloaded but you will need to take care and customise them to ensure they’re the perfect fit.

Analyse Your Current WMS

It’s vital that you truly understand your current WMS and analyse it to learn the areas of weakness that need to be improved.

Consider the In-House Capabilities of each Vendor Regarding Development

Not all in-house vendors will be viable when it comes to development. Usually the viable vendors will be the ones that are specialised or that need to be integrated with the in-house systems.

Tomorrow is the final part in our How to Select WMS series when we’ll be looking at the final three steps in the decision making process.

Monday, 16 June 2014

How to Select WMS? – Part One

Are you on the hunt for a new warehouse management system? If you make the right choice now you could benefit from an improved inventory visibility, improved order fulfilment and automate all of your data collection. It’s never an easy job to decide the right WMS system for you so over the next few days we’ll be sharing our tips on how to make the perfect choice to improve and optimise the operation of your warehouses.

Before we begin let’s take a look at some of the benefits that come with having an up-to-date WMS.
  • Automatic replacements
  • Better responsiveness
  • Customer service improvements
  • Improved accuracy across reporting
  • Inventory accuracy
  • Labor management efficiency
  • Reduced paperwork
  • Return reductions
  • Picking error reduction
  • Remote data visibility
  • Stock transparency
As all WMS require capital investment you must be certain you’re making the right decision and that the business benefits are worthwhile and achievable. Energy, commitment and enthusiasm are also required from the entire warehouse team and management so the new WMS is set up correctly, used effectively and optimised on a regular basis.

Return tomorrow when we’ll be looking at the first four steps in how to select your WMS.

Saturday, 14 June 2014

Performance measures in Supply Chain Management

· Accuracy of
forecasting techniques
· Order entry methods
· Product development 
cycle time
· Total cycle time
·  Total cash flow time
· Supplier interest in
developing partnership
· Supplier delivery 
· Supplier cost saving 
· Supplier lead time 
against industry norm
· Supplier pricing 
against market
· Manufacturing cost
· Capacity utilization
· Economic order 
· Effectiveness of 
master production 
· Production/process
cycle time
· Delivery lead time
· Effectiveness of 
delivery invoice 
· Information richness 
in carrying out delivery
· Number of faultless 
· Customer query time
· Flexibility to meet 
particular customer 
Plan Performance
Source Performance
Production Performance
Delivery Performance
Customer Service and Satisfaction
·  Information carry 
· Order lead time
· Net profit vs 
productivity ratio
· Range of product 
and services
· Rate of return on 
· Achievement of 
defect free deliveries
· Mutual ability to 
respond to quality 
·Purchase order cycle 
time Supplier booking in 
Inventory level as:
· Incoming stock
· Inventory in transit
· Finished goods
· Scrap, waste Work 
in progress
· Response to number 
of urgent deliveries
· Total distribution cost
· Level of customer 
perceived value of 

Source: Measure and metrics at four basic links in a supply chain (Gunasekaran et al 2001)

Friday, 13 June 2014

Warehouse Management

Here are some of the main factors to consider when managing a warehouse:
  • Warehouse safety is top of the priority list. Work hard to reduce risks by implementing systems and offering training to employees. Keep the warehouse clean, tidy and well organised.
  • Manage the employees effectively. Ask supervisors to have a say in the employment process, praise employees and identify areas of weakness so they can be tackled.
  • Oversee the operations in the warehouse. You must designate areas for merchandise, check pallets for damage, and perform visual checks of the storage areas and record findings. All key staff should attend regular meetings where problems can be raised and ideas can be discussed.
  • Review the delivery schedules. All deliveries need to run smoothly. Manage the schedules of so there are enough employees available at key periods, such as during deliveries. All back orders need to be checked and staff should know what to do when stock is damaged. Consider investing in up to date software to help with tracking and the inventory management.
These four areas will help you to manage a productive warehouse that is safe to work in. Use them to come up with your new management systems for your warehouses.

Thursday, 12 June 2014

Tips on Managing Supplier Risk in FMCG

There are risks that need to be managed and prevented in supply chains. If they are not managed the damage that is caused to the bottom line can be devastating. 

Here are five tips on how to manage supplier risks within retail.
  • Collaborate – work together rather than against each other in order to reduce the supply chain risks. Create standardised approaches so the industry is better protected.
  • Double check your information – when you’re given information from suppliers always check it to see if can be verified.
  • Get to know your suppliers – Don’t deal with anyone unless you know them, cost should never be the only factor. Are they compliant with laws and regulations? Check their policies and ethics and ask for up to date information so you’re able to analyse them on a regular basis.
  • Legislation – if you work with suppliers that are high risk due to not meeting compliance requirements that means you’re also at risk. Make sure your suppliers are fully compliant.
  • Understand the tiers of your supply base – make sure you are aware of any sub-contractors that are used in your supply chain. Map the tiers to ensure you know every party involved.

Wednesday, 11 June 2014

Logistics Total Cost Approach - Part Two

Yesterday we looked at the different kind of accounting systems used in the logistics total cost approach. Today we’re going to investigate how the approach is used to improve customer satisfaction and service levels.

Customers are only satisfied when they receive an excellent service. This applies to when the order and delivery goes through without problems and also when issues arise, such as the need to return goods.  This requires a modern logistics system and they sometimes need huge investments, which can take up chunks of the total costs of the company at times. A successful modern logistics system includes:
  • Channels of distribution – different options are available for manufacturers when it comes to distribution. Costs need to be examined in the alternatives to find the right solution without reducing customer satisfaction, such as using wholesale dealers, using an agent at a national level, direct distribution to retailers, customers or different retail outlets.
  • Communication and Data Processing Costs – order pricing, accounts receivable, dispatches, inventory control and dispatches used to improve customer services.
  • Customer service costs – Providing guarantees to customers requires adequate movement and systems in place when goods need to be returned or replaced. Managing customer service needs organisation but results in benefits for the company.
  • Inventory costs – the costs of the transport, warehouses, and levels of inventory maintained etc. The costs include the goods, spaces, losses, theft, damage and insurance and the money it takes to maintain the inventory.
  • Packaging costs – select packaging that considers factors such as handling and transportation.
  • Production/supply costs – as production increases the production costs can reduce. Production costs effects the transit times, warehousing inventory and transit times.
  • Material handling costs – a system that reduces the cost of material handling is essential and requires manual and mechanised handling systems.
  • Transportation costs – costs of transports depends on the speed goods are transported.
  • Warehousing costs – where the goods are stored regardless of the time they are being stored for.

Tuesday, 10 June 2014

Logistics Total Cost Approach – Part One

Customers have to be satisfied at any cost. As the customer service is now an essential part of business it is essential that costing are carefully evaluated in your logistics departments. When using the total cost approach in logistics it’s necessary to use two accounting systems. One is the Financial Accounting System and the other is the Managerial Accounting System.

The Financial Accounting system is used in order to create the necessary reports such as the cash flow statements along with the balance sheets and investments. The managerial accounting system focuses more on the internal needs of the company. One of the methods that are used is the Logistics accounting system as this system is able to assist managers with their planning and implementing the logistics system. All of the information gathered can then be used to budget the logistics and discover where resources need to be allocated.

Financial accounting statements are standardised, but the logistics accounting systems are not. This is a different that is essential as often the information that is used differs between managers and companies. The system is more flexible so that users are able to analyse the decisions that are made based upon the logistics costing.

Tomorrow we will look at the logistics total cost approach in further detail to ensure customers remain satisfied and business is able to boom.

Monday, 9 June 2014

What is a Loading Bay?

The loading bay is where the loading and unloading of goods takes place. The goods are either removed from or loaded onto the transportation vehicle in this designated area. Often the loading bay will have many different bays so that multiple trucks can be loaded or unloaded at once. When the multiple bays are used there is usually a shared platform that spans across the entire length of the area.

Loading bays aren’t only found in warehouses, they can also be found in factories, mail or freight transfer stations, industrial and commercial buildings including theatres and arenas often have loading bays too. The bays will have ramps that lower and raise to the floor up to the level of the platforms as often the work isn’t only completed by hand, equipment such as forklift trucks and pallet jacks are commonly found in the bays.

Safety in the Loading Bays

When vehicles, tools and people work in the same area it is vital that safety is made a priority. Training for all personnel is essential and systems need to be introduced to reduce the risk of injury. These systems include the use of restraining equipment for the trucks and bumpers. Lighting needs to be bright so the area is well lit and mirrors placed in strategic places help the drivers to drive into the bays.

Saturday, 7 June 2014

Lean Design Implementation: Strategies for Minimising Value-inhibiting Levers

Value Inhibitor
Minimising Strategy
Complexity of manufacturing or service provisioning
Design for manufacturability or serviceability.
Cost to customer
Minimise the total cost of ownership, including acquisition, usage, and disposal.
Cost to provider
Standardize components, use low cost, high volume use and robust materials, automation, reduce costs for testing and inspection.
High defects, scrap and
Design for Lean Six Sigma, process design, optimize design after piloting and prototyping, automate manual operations.
High design costs
Eliminate waste from design process, promote design reuse, optimize make/buy decisions, use existing design elements,
platform designs, purchase off-the-shelf elements and subsystems.
Heavy investments
Minimise dedicated equipment use, optimize tooling, jigs and fixture usage, process design to utilize existing processes and equipments.
High operational costs
Reduce handling, minimise transportation and movements, reduce consumable usage, and reduce WIP and inventory.
High test and inspection requirements
Design for Lean Six Sigma to create predictable design; improve design margins.
Sensitive to variation and noise
Use robust designs.
Specialized material
and skill
Use low cost, reliable materials, and reduce part counts.

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