Guest Commentary: Four Critical Elements for Excellence in Supply Chain Execution

Our clients in industries such as automotive, aerospace, hi-tech, retail and consumer goods are emerging from one of our nation’s most trying economic times. Faced with serious pressures to cut costs and boost profits, many companies have re-examined how they source, store and deliver their products. Flexibility, innovation and the ability to operate with virtually no margin of error have become requirements when it comes to logistics outsourcing.

A company’s ability to respond to change, to be nimble and innovative, depends on its ability to execute at the highest levels. Here are some of the elements of good supply chain management that must come together to achieve exceptional execution:

Proven template: Firms that are undertaking a significant change to their logistics network are most often successful if they have a model to follow. This model becomes a pattern for a standard, replicable solution set that can be applied across different areas of the supply chain. This is not to say that all supply chains should be approached with a ‘cookie cutter’ model. Rather, a standard solution set comprised of best practices becomes foundational and can then be customized to meet each specific logistics engagement undertaken. In the absence of a proven model, it can be difficult to know what best practices or methods will breed success.

Deep Expertise: Today’s complex supply chains require applied knowledge not only in their inner workings, but also with big-picture insight of the impact that changes made in one area of the supply chain will have across the network. Great execution requires functional expertise in distribution management, transportation management, cross-docking and network design; it also requires industry expertise in the unique aspects of customer requirements, drivers of profitability, challenges and trends for a particular industry segment. Functional and industry-specific knowledge allow companies to better synchronize supply and demand to achieve the optimal flow of goods across the network.

Lean principles: Applying lean processes is key to delivering long-term value and consistent performance. In a lean culture, logistics teams are empowered to identify and eliminate waste in every process that occurs as an order is fulfilled. Lean tools, such as visual cues, problem solving jackets, and root cause analysis, result in shortened lead times, built-in quality and continuous improvement – ultimately increasing speed to market.

Continuous improvement: We’ve found that ongoing, incremental improvements – both small and large in scope – add up to a significant edge. An important tool for continuous improvement is Value Stream Mapping. Value Stream Maps are created for many aspects of the supply chain such as detailed workflow management, warehouse productivity, route optimization and, on a larger scale, total landed costs. They combine engineering talent with practical operational knowledge to find the best opportunities for change and continuous improvement.

Here’s a recent example of these principles at work in our multi-client operations: A few months ago, we assembled a team of hourly employees at our packaging facility in Athens, Georgia. The team was tasked to evaluate and reduce the time it takes to changeover one of the facility’s packaging lines in order to achieve more frequent and variable runs of our clients’ products. Using a lean tool called a Problem Solving Jacket, the team was able to identify areas to improve, make changes, test the changes, measure the time savings, make more changes, and test the next round of changes and so on. Ultimately, this team reduced the process time for the changeover from 140 minutes to 27 minutes! As this example illustrates, empowering  employees to eliminate waste from processes they know and participate in every day can dramatically impact productivity.

In conclusion, by achieving the right combination of proven templates, deep expertise, lean principles, and continuous improvement, your supply chain will ultimately get products to market faster, improve efficiencies, reduce costs, open new markets and enhance customer satisfaction. That’s why when it comes to logistics, execution is everything.

John H. Williford is President, Global Supply Chain Solutions for Ryder System, Inc. As a member of Ryder’s Executive Leadership Team, he is responsible for management, operations, sales and marketing, and the financial performance of Ryder’s Supply Chain Solutions and Dedicated Contract Carriage business segments.

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