Supply chains have had a torrid time over the last 2 years and just when you think COVID is dissipating, Putin kicks off!
One of the problems faced by senior leaders seeking performance improvement is that it takes an age to get going and it all seems to take far too long. While transformational structural changes should not be rushed, there are several initiatives you can consider to make rapid improvement in your supply chain.
What can you do to effect meaningful change sooner rather than later in Transport?
The Enchange 6-Part Model
In a simplified view of the FMCG supply chain, the priority of leaders is to get their stuff in front of consumers. With so many hurdles and unknowns, this is not necessarily easy.
These are the 6 simple steps:
Step 1: Sourcing
Step 2: Demand Planning – Supply Planning
Step 3: Manufacturing
Step 4: Warehousing
Step 5: Transport
Step 6: The all-important Consumer Shelf
The approach helps people to understand the day to day operational difficulties and challenges experienced by colleagues along these 6 steps and what you can change, now.
- What happens at the important handovers/pinch points?
- What can go wrong at these interfaces?
- How do you identify and solve problems?
- How can you improve the data and information hand-shakes?
Four Frequent Flaws – Transport
As we move towards the end of the Enchange 6-part model we approach the ‘trucks and sheds’ end of the supply chain. This article considers transportation and four actions you might take to improve service to customers and consumers, quickly.
If your core business is FMCG and you own and operate your own transport fleet then you might consider if that really works for your company. Ownership and management of a transport fleet is a heavy financial burden and from an operational perspective, others can probably do the job better - transport experts.
Here are the four frequent Transport flaws you can avoid.
1. Route Planning - way to go! Like many potential initiatives identified in this series, this one is not rocket science. Nevertheless, not everyone appreciates the role route planning must take in order to keep costs under control and provide the best possible service to customers. Some companies still give a pack of delivery notes to the driver and send him on his merry way around the road network.
You can spend a lot of money on a shiny IT tool but with today’s sophisticated satellite navigation this may not be necessary. A pan-European operation may well benefit from the crutch of an IT system but smaller businesses can work equally well with freely available map and road applications.
2. Fuel Consumption. This was always important but more so now we are approaching the highest ever Brent Crude price and the need for control is paramount. Leading edge vans and tractors now contain IT analytics way ahead of the tachograph. (I was surmised to hear that the tachograph was invented in 1844 and originally used in trains.)
Modern analytics will tell you almost everything about your transport and how the units are being driven. Keep an eye out for any unusual consumption and outliers which may indicate something or rather somebody, is driving badly or borrowing the fuel. Soon, the value of the fuel in the tank will be even more significant and you need to ensure this expense is secure and used wisely.
3. Air is bad for you! Air may keep us going but it is the scourge of transportation. Moving half empty vans and trucks really is like emptying your wallet into a shredder. Inefficient, partial loads also have a tendency to be unstable, leading to damages and customer returns so it is best to avoid for many reasons.
Again, IT can help you optimise truck weight and volume but the human brain can come to the rescue once more. Take a physical look at how you are shipping your goods and challenge the internal department or the 3PLP to optimise loads. From the producer perspective, can you help by increasing your pallet height/utilisation? Similarly, 3PLPs should not be reluctant to bring opportunities to the producers.
4. Front & Back Hauling. What’s that all about? Well, I think I may have just coined front hauling in a logistics context! If you are forced to operate transport below the optimum loadings for volume/weight, you could approach other producers heading to the same locations. For example, if you have free headspace you could ship tissues, toilet rolls or crisps above which are lightweight (as Pepsi does in-house with drinks and chips/crisps).
How many times do your trucks return empty (lots of air there)? Sell this space on empty journeys and even if it is a part load of a few pallets you will cover some of your costs. Riding empty is another example of a visit to the shredder with your cash. With some effort and a little investment you can become quite agile in selling your empty space.
In the next article we will look at the last step in the Enchange 6-Part Model, getting your stuff onto shelves.
If you need to make supply chain change in the next 2/3 months, we are just a call away.
Feel free to use any of our contact routes including Live Chat, if you have any questions about how the Enchange Supply Chain House can assist your journey to supply chain excellence.
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