5 Quick Hits for Supply Chain Operational Improvements

Here are my 5 quick hits for quickly transforming your supply chain team into a model of high productivity and service.

Quick Hit #1: Conduct a time study and analysis of the order fulfillment process:

Concentrating a micro-campaign on order fulfillment will focus the team on the caregiver’s needs. Ultimately the less time the direct care team spends on this process the more time they have for patient care… Formally – “release time to care.”

Identify non-value added steps and note the amount of time spent on each of them. Then, assess overall workflow in an attempt to reveal inefficient product pick paths, wasted motion, excessive delays, excessive footsteps, aisle and work area congestion, and equipment availability.

Quick Hit #2: Expunge manual data entry with impunity:

The first level of wasteful manual data entry shows up when a team relies on “requisitions and inventory transfers” written on post-it notes, scrap paper, stickers, and package labels. The second level happens when supply chain associates are seen sitting for long periods of time manually typing data into the MMIS. These practices waste time for inventory control staff and are often rife with errors and multiply the waste by creating new work quality checks in the form of reports and ultimately inventory adjustments and expedited order fulfillment.

The introduction of mobile computers with bar code scanners or RFID readers at the receiving dock to immediately identify products on arrival, and the use of automated supply cabinets and open architecture or weighted bins helps get product off the dock or out of the storeroom efficiently and eliminates nearly all the errors associated with manual receiving and distribution: including identification, counting, and data entry errors. Thus improving upstream productivity and the downstream gains in operating as a high-reliability supply chain team will be substantial as well.

Quick Hit #3: Spend time on inventory management:

Unplanned time spent looking for product, and the checking/re-checking inventory values represented in the MMIS and the resulting reconciliation adjustments are a drain on productivity and service level.

Train your eye to know the red flags and warning signs of wasteful inventory management and dust off your leadership skills in the methods of “behavioral-based lean management.” ABC analysis, SKU Profiling, SKU Optimization, PAR Location Rationalization/Optimization, are great analytics to quickly assess opportunities for improvement. Also consider a review of inbound and outbound freight rate and consolidation contracts and drive even more efficient put-away with receiving appointments for carriers. Establishing formal cycle counts will maintain reliable inventory valuation and critical-for-care stock availability while making radical inventory control process improvements.

Quick Hit #4: Material handling time:

How much do you move materials, people, equipment and goods within a processing step? Wasteful handling is any extra work performed beyond the standard required by the customer or end user. This can be less of a “quick hit” just because the measurements yield trends against performance standards that can take time to identify and correct, but the improvements are often significant.

Measure over-all transportation time: Is there unnecessary (non-value added) movement of parts, materials, or information between processes?

Measure time spent waiting for someone to handle product: Are people or parts, systems or facilities idle – waiting for a work cycle to be completed?

Measure stasis inventory and over-stocked PARs: Are you stocking sooner, faster or in greater quantities than the customer is demanding? That can produce wasteful use of valuable facility real estate by bloating storeroom footprints.

 Quick Hit #5: Truck and container:

Measure inbound freight unloading time. Improvements are made in collaborating with originators of regular shipments and discussing beneficial pallet architecture, delivery documents that match internal POs and receiving documents, SKU requirement segmentation and order consolidation to optimize line count.

With your internal distribution and fulfillment team review outbound delivery trucks, carts, and LUM repack containers, and exchange carts and drawers. Besides traditional measurement of fill rate, turnover, also track truck and container fill percentage. It’s more efficient to transport full bins, containers, and truck loads when viewed as a cost of product transported and a percentage of direct operating expenses (% TDE Trans) or the net-net total cost of goods sold (GOGS).

Keep filling the hands that heal!

TH

If your boss asked for your top cost reduction ideas by the end of the day, do you know what recommendations you would make? Use this Expense Reduction Idea Log regularly and you will never have to stall for ideas again. Order one for each person on your purchasing and sourcing teams today!