Supply Chain Management – How to Reduce Downtime

Supply Chain Management - How to Reduce Downtime S&OP

Manufacturers Can Identify Savings In Downtime

With increasing demand and pressure to deliver on time, no manufacturer wants to hear the words delayed, lost or product defects! Which gets us asking, how do you reduce downtime?

A Logistical Nightmare

Manufacturing is an increasingly global industry. Parts, components, machinery and equipment are sourced via a mix of local, national and international suppliers. When a business is global it is essential to have a well-oiled logistics capability to ensure everything is in the right place at the right time.

The alternative can lead to difficult decisions. Do you delay production and increase the backlog of work? Do you make do with what’s available to get the product out the door? Do you source more expensive materials or equipment? Do you fast track orders when materials come in and invite other complications through work around and juggling priorities?

Such problems can lead to shipping substandard product, incomplete orders leading to dissatisfied customers and a stressed workforce.

Your logistics team is there to help you avoid supply chain surprises by providing instant visibility of your materials and equipment at all times. A good logistics team is best supported by systems that share information easily across divisions and different parties, no matter what system they use or whether your goods are with your supplier, in transit, in the warehouse or on their way to the customer.

Dominate Downtime

While you cannot completely eradicate downtime, you can put measures in place to stop it eating into your schedule so heavily. Streamlining your technology and processes are important to creating a much more efficient supply chain. For example, you can investigate:

  1. Improving your ability to predict orders and improving the downstream communications or
  2. Measuring and tracking the time it takes from order and receipt of the goods through the supply chain

Good Record Keeping

A proportion of downtime lies within ineffective data entry from manual paperwork to systems that are not up to the task. Valuable time is often lost with systems and processes that underutilise staff and are unable to accurately pinpoint and update the necessary parties when issues arise.

For example, many manufacturers now use automatic identification to record and track the whereabouts of your goods. According to the University of Wollongong, Automatic Identification, also known as Auto ID, better devices now enable voice or image recognition, GPS tracking or RFID for user-friendly and rapid data entry. However, if data is entered incorrectly or not at all, then it can result in delays.

Inaccuracies create issues with freight too. For example, if a carrier has been given a heavier load than originally expected, this would slow the shipment process down either within the factory while new barcodes/paperwork is generated or whilst in transit because goods can’t be tracked.

Ensuring you have well-trained staff and providing incentives to keep systems up to date reduce downtime significantly too. For example, one company improved their inventory data when they started using it to track weekly warehouse staff performance.

Visibility and Predictability

Having visibility of your supply chain is one thing. You can take your business to the next level by linking your sales to your orders to your manufacturing processes to your end customer via Sales and Operational Planning (S&OP) tools. These tools allow businesses to couple accurate sales predictions with your inventory and manufacturing times to increase the speed with which you get orders to customers. Such tools also help to reduce overstocking, thereby reducing your operating costs too.

Leading businesses in manufacturing have an established S&OP process in place and rely on it to perform well.

However, the S&OP process has to allow for collaboration across multiple business areas by having a view of the expected number of orders coming in, the parts, components, materials that will be required to service the orders, keeping data updated across the manufacturing lifecycle.

Often there is a disconnect between planning and execution. There are tools available that translate plans into action allowing manufacturers to save time by the execution.

From Planning to Execution in Days

For example, FreightExchanges’ S&OP tool uses optimisations and modelling to rapidly analyse supply chain costs and identify tests to reduce their costs by double digits in days instead of weeks or even months.

In fact, we helped a leading Services company to analyse their supply chain costs and identify simple strategies to reduce their costs by 18% in days.

The FreightDesk platform links the planning and the execution process automatically. Numerous logistics scenarios can be run. If the company wants to test an idea FreightDesk can do that seamlessly.

For example, the business impacts of changing to a different supplier in a different geography for parts, or even relocating a DC can be rapidly projected. If the company finds it a viable option to test FreightDesk can help to execute the test automatically. Of course, technology is only one aspect of organisational change. Implementing highly flexible systems can significantly increase the speed of which you can affect change.

Very few initiatives match the economic return of a mature Sales and Operations Execution capability and proves that downtime can be significantly reduced and free up your schedule for the bigger things.