You have to make sure that your supply chain management is at full optimization. Using a sophisticated and new direct plant shipping software program can minimize costs. The right software program can redirect multiple SKU orders. One is simple, but when you multiply the number of SKU orders, it can get complicated. A good software program can make all the difference.
Another reason - you may be dealing with product that is incomplete. For example, how do you determine to ship from the plant if only 95% of the product is at the plant site? Also, how do you get the remaining product to that location to make the shipment complete? It is difficult to do, so most companies will give up. They revert to old antiqued practices and find a location with all the stock and send the order from there. You can lose out on a lot of business this way ultimately minimizing market share.
But KISS is high cost. On local campuses consisting of a plant and several warehouses, companies like Procter & Gamble have realized there is a better way. In their extensive supply chain management program, P & G uses a distribution master scheduling system called AutoScheduler from Transportation l Warehouse Optimization to optimize their direct plant shipping by:
A. Maximizing DPS by pre-positioning inventory; B. Identify the best place to ship from; C. Ensure the shipment is complete by re-deploying the inventory; D. Define the customer service goal of on-time, every-time and establish the dock and staff schedule to make sure this happens
Effective supply chain management requires more timely decisions. Because many order management systems subscribe to the KISS principle, the creation of optimized rules to determine where orders should ship from is often determined by a strategic location analysis. This analysis, done every few years, looks at average shipments to determine, for example, that Denver is best served from Salt Lake City. However, not all orders are average. What if the order is far from average with the majority of the product being manufactured in Chicago? The stock would travel 530 miles past Denver, only to travel 530 miles back to the customer.
What is needed is a timely, capacity balanced optimization system that performs the sourcing analysis in near real-time and determines that the order should ship from the Chicago plant. There are tools for distributed order processing - but most of those are designed for the likes of catalog shippers. In the catalog world, if there is insufficient inventory in one location, then the order will be redirected to another. Most applications that tackle the more substantive issues of ship point optimization in companies shipping truckloads of consumer-packaged goods have been custom built. One new entry in the market is AutoSPA (Automatic Ship Point Assignment), also from Transportation l Warehouse Optimization. This system looks at the total cost of delivery - from producing plant to customer - as well as potential costs for product expiring in one location and being scrapped.
At the same time, AutoSPA can limit the number of shipments that can be made from any site. For example, if there are 200 shipments to be made in the South East, there is no sense in overbooking the Miami DC when Atlanta is idle. Rather, Miami should work to its capacity leaving some volume for Atlanta.
The savings from scheduling software and ship-point assignment are significant. In most cases, you can cut total supply chain management costs by nearly twice as much as DPS alone - so it is worth doing. It forms the basis of effective supply chain management.
If you need the expertise of the best in transportation consulting, check out Transportation l Warehouse Optimization. They already work with the best of the best. Procter & Gamble - a long-term client since 1992 - along with other top Fortune 50 Companies are among their client list. They have saved them millions of dollars with transportation consulting solutions. Taking the long-term approach, they understand the industry, the market place and like good consultants do, keep the client as top priority. Contact them at www.TransportationOptimization.com today. While visiting their website, sign up for their exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for truck operators. Transportation l Warehouse Optimization - Solutions that work. Solutions that save. - 15478
Another reason - you may be dealing with product that is incomplete. For example, how do you determine to ship from the plant if only 95% of the product is at the plant site? Also, how do you get the remaining product to that location to make the shipment complete? It is difficult to do, so most companies will give up. They revert to old antiqued practices and find a location with all the stock and send the order from there. You can lose out on a lot of business this way ultimately minimizing market share.
But KISS is high cost. On local campuses consisting of a plant and several warehouses, companies like Procter & Gamble have realized there is a better way. In their extensive supply chain management program, P & G uses a distribution master scheduling system called AutoScheduler from Transportation l Warehouse Optimization to optimize their direct plant shipping by:
A. Maximizing DPS by pre-positioning inventory; B. Identify the best place to ship from; C. Ensure the shipment is complete by re-deploying the inventory; D. Define the customer service goal of on-time, every-time and establish the dock and staff schedule to make sure this happens
Effective supply chain management requires more timely decisions. Because many order management systems subscribe to the KISS principle, the creation of optimized rules to determine where orders should ship from is often determined by a strategic location analysis. This analysis, done every few years, looks at average shipments to determine, for example, that Denver is best served from Salt Lake City. However, not all orders are average. What if the order is far from average with the majority of the product being manufactured in Chicago? The stock would travel 530 miles past Denver, only to travel 530 miles back to the customer.
What is needed is a timely, capacity balanced optimization system that performs the sourcing analysis in near real-time and determines that the order should ship from the Chicago plant. There are tools for distributed order processing - but most of those are designed for the likes of catalog shippers. In the catalog world, if there is insufficient inventory in one location, then the order will be redirected to another. Most applications that tackle the more substantive issues of ship point optimization in companies shipping truckloads of consumer-packaged goods have been custom built. One new entry in the market is AutoSPA (Automatic Ship Point Assignment), also from Transportation l Warehouse Optimization. This system looks at the total cost of delivery - from producing plant to customer - as well as potential costs for product expiring in one location and being scrapped.
At the same time, AutoSPA can limit the number of shipments that can be made from any site. For example, if there are 200 shipments to be made in the South East, there is no sense in overbooking the Miami DC when Atlanta is idle. Rather, Miami should work to its capacity leaving some volume for Atlanta.
The savings from scheduling software and ship-point assignment are significant. In most cases, you can cut total supply chain management costs by nearly twice as much as DPS alone - so it is worth doing. It forms the basis of effective supply chain management.
If you need the expertise of the best in transportation consulting, check out Transportation l Warehouse Optimization. They already work with the best of the best. Procter & Gamble - a long-term client since 1992 - along with other top Fortune 50 Companies are among their client list. They have saved them millions of dollars with transportation consulting solutions. Taking the long-term approach, they understand the industry, the market place and like good consultants do, keep the client as top priority. Contact them at www.TransportationOptimization.com today. While visiting their website, sign up for their exclusive free Truck Loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for truck operators. Transportation l Warehouse Optimization - Solutions that work. Solutions that save. - 15478
About the Author:
Tom Moore and his Associates at Transportation l Warehouse Optimization will help you maximize Supply Chain Management and save you money. Sign up for a exclusive free truck loading Manual that can SAVE YOU MONEY and offer you the perfect Operator Manual for Truck Operators. Transportation l Warehouse Optimization - Solutions that work. Solutions that save.
