4 keys to a successful supply chain

A successful supply chain is vital in a world that is becoming faster and more demanding

10/29/2013


At the 2013 Association for Manufacturing Excellence Conference in Toronto in October, Michael Rackley, head of supply chain solutions for Ryder Systems, talked about the increasing demands by manufacturers and consumers on the supply chain. Rackley identified nine major trends affecting the supply chain today:

  1. Increasingly shorter lead time (“Speed is worth more than cash these days,” he said.)
  2. Impact of online and mobile information access
  3. Acceleration of social media
  4. Heightened susceptibility to natural disasters
  5. Political and currency turmoil
  6. Shorter product lifecycles (He noted that Apple has had seven new iPhone models since 2007.)
  7. Faster delivery
  8. More, lower cost competitors
  9. Demanding shareholders 

“We have to perform even more efficiently than ever before. What does that do to the supply chain? Our 12- to 14-week lead times have to get a lot smaller,” Rackley said. “Speed is driving the supply chain. Customers are defining the mark we have to hit and the speed we have to hit.”

The key to hitting these new marks, Rackley said, is collaboration. “We have to create a new network, a multi-tiered network of people working together, rather than individuals creating plans for the supply chain,” he said.

The demand-driven supply chain, said Rackley, “has got to be around customer and consumer. We’ve got to listen to that customer. We now have to manage supply at the pull of the customer.”

It also, he noted, changes the relationship between sales and manufacturing. “Manufacturing, distribution, and sales all have to be working together,” he said. “Everyone has to have visibility to actual consumer demand. They need to know, what are consumers actually buying?

The dynamic of such a system changes from a linear process to a wheel-and-spoke system. “In a multi-tiered network, the consumer is actually in the middle, with factories, OEMS, distributors, Tier 1 and Tier 2 manufacturers around them,” he said. “Visibility is the key. The most difficult part is building the network, but you’ve got to build the multi-tiered network, and then get that visibility.” Where that system has occurred, Rackley said, companies have seen increased sales, a 5% to 10% reduction in operating expense, and between 20% and 30% reduction in inventory costs.

He cited four main ingredients in a successful system:

Product/package design 

Rackley cited the example of two different grilles for a vehicle front—one with a V6 logo and one without. By making that logo a clip-on rather than a molded change, they were able to produce one grille and reduce inventory.

Network 

“You need to look at best-cost areas vs. simply the low-cost areas,” he said. By localizing the finished goods and spares, delivery times can be reduced, which can offset any piece price differences from a lower cost supplier with higher transportation costs or longer lead times to delivery.

Visibility and collaboration 

Rackley noted the manufacturer who re-examined his logistical system for inbound supplies. The manufacturer created a material flow center strategically located to support the assembly plant, with material flow center sequencing parts to each assembly line. “It’s getting the parts to the right place at the right time,” Rackley said. “Sequencing is very important. It’s getting visibility to all that inbound material.”

Lean execution 

That would include not just working internally, but with all parts of the supplier base. “You’ve got to take it out from the four walls (of the plant) and move it across the entire supply chain,” Rackley said.



The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by Control Engineering subscribers. Vote now (if qualified)!
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Maximize ROI with integrated control system approach; Microcontrollers vs. PLCs; Power quality; Accelerate and rewire IIoT; Traits for excellent engineers
HMI effectiveness; Distributed I/O; Engineers' Choice Award finalists; System Integrator advice; Inside Machines
Women in engineering; Engineering Leaders Under 40; PID benefits and drawbacks; Ladder logic; Cloud computing
Programmable logic controllers (PLCs) represent the logic (decision) part of the control loop of sense, decide, and actuate. As we know, PLCs aren’t the only option for making decisions in a control loop, but they are likely why you’re here.
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
This article collection contains several articles on how advancements in vision system designs, computing power, algorithms, optics, and communications are making machine vision more cost effective than ever before.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Control room technology innovation; Practical approaches to corrosion protection; Pipeline regulator revises quality programs
Cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by Control Engineering subscribers. Vote now (if qualified)!
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Maximize ROI with integrated control system approach; Microcontrollers vs. PLCs; Power quality; Accelerate and rewire IIoT; Traits for excellent engineers
HMI effectiveness; Distributed I/O; Engineers' Choice Award finalists; System Integrator advice; Inside Machines
Women in engineering; Engineering Leaders Under 40; PID benefits and drawbacks; Ladder logic; Cloud computing
Programmable logic controllers (PLCs) represent the logic (decision) part of the control loop of sense, decide, and actuate. As we know, PLCs aren’t the only option for making decisions in a control loop, but they are likely why you’re here.
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
This article collection contains several articles on how advancements in vision system designs, computing power, algorithms, optics, and communications are making machine vision more cost effective than ever before.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Control room technology innovation; Practical approaches to corrosion protection; Pipeline regulator revises quality programs
Cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by Control Engineering subscribers. Vote now (if qualified)!
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Maximize ROI with integrated control system approach; Microcontrollers vs. PLCs; Power quality; Accelerate and rewire IIoT; Traits for excellent engineers
HMI effectiveness; Distributed I/O; Engineers' Choice Award finalists; System Integrator advice; Inside Machines
Women in engineering; Engineering Leaders Under 40; PID benefits and drawbacks; Ladder logic; Cloud computing
Programmable logic controllers (PLCs) represent the logic (decision) part of the control loop of sense, decide, and actuate. As we know, PLCs aren’t the only option for making decisions in a control loop, but they are likely why you’re here.
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
This article collection contains several articles on how advancements in vision system designs, computing power, algorithms, optics, and communications are making machine vision more cost effective than ever before.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Control room technology innovation; Practical approaches to corrosion protection; Pipeline regulator revises quality programs
Cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me