Are you making the most of your (shrinking) space? Tanel says that most companies do consider adding space. “However,” he says, “it is sometimes necessary to review the presently occupied facilities to determine if one can increase productivity by changing the physical and spatial relationships between operations,” he explains. According to Thomas Tanel, president of CATTAN Services, before you can consider making any changes in your current mode of operation, you have to thoroughly understand how your warehouse runs.
Recriminations the need to reevaluate manufacturing offshoring and outsourcin...Thomas Tanel
It is increasingly popular now for companies to reevaluate offshoring and the outsourcing of manufacturing and other services. Now we hear about onshoring, near shoring and right shoring. Are you dazed and confused? Who’s right and who’s wrong? More importantly, organizations need to do the necessary due diligence as part of their sourcing decision. It has been my contention that in addition to the basic item’s purchase price; we need to seriously
consider the ultimate cost of delivering the goods to the buyer's facility.
Supplier financial stability and risk differentiation in turbulent times -sup...Thomas Tanel
There is a Darwinian effect occurring in the supply chain as Fortune 1000 companies cut weaker suppliers. The simple fact is that in today’s longer global supply chains, product
moves over greater distances and across more multinational borders than in the more localized supply chains of the past. In an era of wildly fluctuating commodity prices and security regulations, the coordination and execution required for international shipments has become
more of a challenge than in the past.
Out with the old, in with the new intra-logistics--mmg news letter 2013Thomas Tanel
I would like to introduce the concept of Intra-logistics as the new mantra for Materials Management. Intra-logistics is a recent European term that describes the internal flow of materials between different logistics nodes within a company. Conceptually, Intra-logistics includes the set of logistical activities necessary to find, purchase, receive, store, process, issue, and deliver materials.
Mitigating supply chain risk in uncertain times murphy's law--mworld volume 1...Thomas Tanel
The simple fact is that in today’s longer global supply chains, product moves over greater distances and across
more multinational borders than in the more localized
supply chains of the past. This distance-based supply chain, whose links are forged by many supplier tiers in various countries, carries a risk dependent on its length and
diversity. The longer and more diverse it becomes, the
more it is susceptible to unforeseen circumstances.
Nine ways warehousing adds value -logistic insight asia november-december 2012Thomas Tanel
With new trends and an 'e-volution' in moving and storing materials comes the inevitable need to reconceive how we operate our warehouses and distribution centers to stay competitive.
The Art of Planning and Writing Specs and Requirements--ISM 2010 TanelThomas Tanel
One of the most difficult tasks that purchasers face is converting user or internal
customer needs to new specifications and requirements. For most, it’s easier said than done,
while others simply dread the thought of constructing a Statement of Work. Failure to develop
a properly defined scope of work, specification, or requirement may mean the solicitation will
need to be abandoned and repeated with corrections. Purchasers who are involved in putting
together specifications, requirements, or SOWs need to be aware that it is worth the
investment, time, and effort to create a high quality outcome. Thus, it is important that
purchasers understand the importance of good specifications and requirements, as well as
their contractual and practical significance. This proceeding will offer you practical techniques,
tools, and process methods for constructing effective specifications, requirements, and SOWs.
Supply chain performance reporting and metrics -logistics digest 091112Thomas Tanel
Many managers see supply chain performance reporting and metrics as a huge time drain that results in a series of uncomfortable conversations and confrontations they would rather not endure. You cannot manage what you cannot measure, and your supply chain is one of the most important functions to manage. The good news is that you’re Logistics and Supply Chain Management people
are probably already doing a lot of measuring. The bad news is that they might not be measuring the right things. To measure your supply chain effectively, you must identify metrics that are appropriate for your organization and that will improve business performance.
Recriminations the need to reevaluate manufacturing offshoring and outsourcin...Thomas Tanel
It is increasingly popular now for companies to reevaluate offshoring and the outsourcing of manufacturing and other services. Now we hear about onshoring, near shoring and right shoring. Are you dazed and confused? Who’s right and who’s wrong? More importantly, organizations need to do the necessary due diligence as part of their sourcing decision. It has been my contention that in addition to the basic item’s purchase price; we need to seriously
consider the ultimate cost of delivering the goods to the buyer's facility.
Supplier financial stability and risk differentiation in turbulent times -sup...Thomas Tanel
There is a Darwinian effect occurring in the supply chain as Fortune 1000 companies cut weaker suppliers. The simple fact is that in today’s longer global supply chains, product
moves over greater distances and across more multinational borders than in the more localized supply chains of the past. In an era of wildly fluctuating commodity prices and security regulations, the coordination and execution required for international shipments has become
more of a challenge than in the past.
Out with the old, in with the new intra-logistics--mmg news letter 2013Thomas Tanel
I would like to introduce the concept of Intra-logistics as the new mantra for Materials Management. Intra-logistics is a recent European term that describes the internal flow of materials between different logistics nodes within a company. Conceptually, Intra-logistics includes the set of logistical activities necessary to find, purchase, receive, store, process, issue, and deliver materials.
Mitigating supply chain risk in uncertain times murphy's law--mworld volume 1...Thomas Tanel
The simple fact is that in today’s longer global supply chains, product moves over greater distances and across
more multinational borders than in the more localized
supply chains of the past. This distance-based supply chain, whose links are forged by many supplier tiers in various countries, carries a risk dependent on its length and
diversity. The longer and more diverse it becomes, the
more it is susceptible to unforeseen circumstances.
Nine ways warehousing adds value -logistic insight asia november-december 2012Thomas Tanel
With new trends and an 'e-volution' in moving and storing materials comes the inevitable need to reconceive how we operate our warehouses and distribution centers to stay competitive.
The Art of Planning and Writing Specs and Requirements--ISM 2010 TanelThomas Tanel
One of the most difficult tasks that purchasers face is converting user or internal
customer needs to new specifications and requirements. For most, it’s easier said than done,
while others simply dread the thought of constructing a Statement of Work. Failure to develop
a properly defined scope of work, specification, or requirement may mean the solicitation will
need to be abandoned and repeated with corrections. Purchasers who are involved in putting
together specifications, requirements, or SOWs need to be aware that it is worth the
investment, time, and effort to create a high quality outcome. Thus, it is important that
purchasers understand the importance of good specifications and requirements, as well as
their contractual and practical significance. This proceeding will offer you practical techniques,
tools, and process methods for constructing effective specifications, requirements, and SOWs.
Supply chain performance reporting and metrics -logistics digest 091112Thomas Tanel
Many managers see supply chain performance reporting and metrics as a huge time drain that results in a series of uncomfortable conversations and confrontations they would rather not endure. You cannot manage what you cannot measure, and your supply chain is one of the most important functions to manage. The good news is that you’re Logistics and Supply Chain Management people
are probably already doing a lot of measuring. The bad news is that they might not be measuring the right things. To measure your supply chain effectively, you must identify metrics that are appropriate for your organization and that will improve business performance.
Why Digitalization is Raising the Bar for Transportation ProcurementXeneta
When it comes to determining the most effective of procurement companies, the crucial factor comes down to technology. While technology has always played an important role, it will be the digital transformation in procurement that separates the wheat from the chaff when it comes to world class performance and world class operations.
Learn from the lessons from decades of real experience with real (and successful) BPM initiatives for taking BPM from promise to practice. This will be great primer for beginners and will provide new insight & fresh ideas for people with experience in BPM.
Product Compliance Software Vendor Sourcing Guide Matt Whitteker
Choosing a Product Compliance Software / Services Vendor can be a daunting prospect. At Assent we've made things easy with the following guide. We look at best practices, different service, business models and give you an indepth look at how to source a product compliance vendor for software and services.
A recent article from the Australian Logistics Bureau spoke about supply chain trends that could cause shake ups and even precipitate a fatal collapse. However, one trend was overlooked. It is this one trend that, when used in conjunction with the singularly most important supply chain resource, has the potential to revolutionize all aspects of supply chain more than software and the various process models combined.
Top 5 Supply Chain Leaders: What Your Competition is Doing BetterDavid Kiger
Every company should be working towards improving their supply chain. It does not matter how big or small your company is, the supply chain is one of the most important components of your revenue generation.
Read the case If the Shoe Fits (and Even if It Doesnt) Custome.docxmakdul
Read the case "If the Shoe Fits (and Even if It Doesn't): Customer Service at
Zappos" at the end of Chapter 14 (p.22-23).
Book Citation: Abrams, R. (2012). Entrepreneurship A Real-world Approach. Planning Shop.
Answer the following questions and/or statements in detail:
1. The great customer service at Zappos increases costs -- free same-day shipping; extensive employee training; and so on. Do you think the company can reduce costs in other areas of operations to help offset these costs? If so, how? Use credible sources and research to support and explain.
2. By off-shoring its customer call center, even if Zappos offers wages and perks much higher than the going rate, it would stand to save substantial amounts of money. Do you think Zappos should consider this? Why or why not? Use credible sources and research to support and explain.
3. In what other ways do you think Zappos can affordably enhance its customer service? Use credible sources and research to support and explain.
Make sure you format your papers in proper APA 6th. Be sure to properly cite your sources inside your text using APA 6th citations rules as well as proper APA referencing guidelines in your “References” (bibliography) section at the end of your papers.
Your written weekly assignment paper should be at least 1,000 words in length.
Chapter
14
How Will You Run Your Business? 332
Facilities 333
Manufacturing a Product 335
Design your production process 336
Best practices in manufacturing 337
Quality management: ISO 9001 338
Outsourcing and offshoring 339
Producing a Service 340
Research and Development 341
Supply Chain Management 342
Finding suppliers 342
Inventory management 343
Order Fulfillment and Customer Service 347
Insurance 348
Emergency Preparedness and Disaster Recovery 349
“Green” Your Operations 350
Other Operational Issues 351
Real-World Case
If the Shoe Fits (and even if It Doesn’t):
Customer Service at Zappos 352
Critical Thinking Exercise
turn the tables on Costs 354
OPERATIONS
ERA_Ch14.indd 331 6/18/12 9:54 AM
e N t r e p r e N e U r S h I p a r e a L - W O r L D a p p r O a C h332
How Will You Run Your Business?
Entrepreneurial ventures often are launched and funded based on a great
idea or a terrific management team, yet they rise and fall—make profits
or lose money—based on their operations. How will you actually produce
and deliver your product or service? How will you make sure you have the
right goods at the right time—and not too many goods, or the wrong ones?
How will you ship, store, and manage your inventory? If you run a service
business, how will you make certain that your service providers are in the
right place at the right time with the right materials to do their jobs?
The term “operations” covers the entire infrastructure, equipment, processes,
and procedures that enable you to produce and deliver your product or
service in a way that lets you run a profitable business. ...
Adapt, overcome, and improvise words to live by for the supply chain--e parce...Thomas Tanel
In the movie Heartbreak Ridge, Clint Eastwood as Gunny Highway says, “You're Marines now. You adapt. You overcome. You improvise.”
With more than 40 plus years of seasoned and practical supply chain experience, I would like to share with you a military perspective on what Gunny Sergeant Thomas Highway meant and its application to the supply chain.
Management by walking around is a good start here’s what to do while walking-...Thomas Tanel
‘Management by walking around’ is a good start; here’s what to do while walking. Getting out on the floor of the
DC is a crucial management tactic. But if you walk around only once in a while, you run the risk of what Tom Tanel calls the “lip-service presentation and eyewash tour.”
Identifying vulnerability is step one to mitigating supply chain risk -my pur...Thomas Tanel
Supply chains are becoming increasingly complex. Yet many procurement teams are not working to prevent and manage disruptions that could prove costly. In a recent webcast, “Preventing and Managing Supply Chain Disruptions,” Tanel describes costs of disruption to the supply chain and explains why it’s important for procurement to learn to identify vulnerabilities and develop a plan to mitigate risk.
How to make eoq relevant again -logistics & supply chain world july 2012Thomas Tanel
The concepts of Just-in-Time (JIT) and Lean have led many to question the continued relevance of Economic Order Quantity (EOQ), whose function is to identify the optimum order with the lowest cost parameter. In response, yes, it is still valid as a basic analytic tool, however, many supply chain industry executives perceive it as “old school” or don’t even know about it. My experience has shown that
many individuals and some companies cannot apply it—even if they wanted to—because they do not know their acquisition costs to place an order or their yearly inventory carrying cost rate.
More Related Content
Similar to Spaced out are you making the most of your shrinking space--werc sheet (may-june2013)v41
Why Digitalization is Raising the Bar for Transportation ProcurementXeneta
When it comes to determining the most effective of procurement companies, the crucial factor comes down to technology. While technology has always played an important role, it will be the digital transformation in procurement that separates the wheat from the chaff when it comes to world class performance and world class operations.
Learn from the lessons from decades of real experience with real (and successful) BPM initiatives for taking BPM from promise to practice. This will be great primer for beginners and will provide new insight & fresh ideas for people with experience in BPM.
Product Compliance Software Vendor Sourcing Guide Matt Whitteker
Choosing a Product Compliance Software / Services Vendor can be a daunting prospect. At Assent we've made things easy with the following guide. We look at best practices, different service, business models and give you an indepth look at how to source a product compliance vendor for software and services.
A recent article from the Australian Logistics Bureau spoke about supply chain trends that could cause shake ups and even precipitate a fatal collapse. However, one trend was overlooked. It is this one trend that, when used in conjunction with the singularly most important supply chain resource, has the potential to revolutionize all aspects of supply chain more than software and the various process models combined.
Top 5 Supply Chain Leaders: What Your Competition is Doing BetterDavid Kiger
Every company should be working towards improving their supply chain. It does not matter how big or small your company is, the supply chain is one of the most important components of your revenue generation.
Read the case If the Shoe Fits (and Even if It Doesnt) Custome.docxmakdul
Read the case "If the Shoe Fits (and Even if It Doesn't): Customer Service at
Zappos" at the end of Chapter 14 (p.22-23).
Book Citation: Abrams, R. (2012). Entrepreneurship A Real-world Approach. Planning Shop.
Answer the following questions and/or statements in detail:
1. The great customer service at Zappos increases costs -- free same-day shipping; extensive employee training; and so on. Do you think the company can reduce costs in other areas of operations to help offset these costs? If so, how? Use credible sources and research to support and explain.
2. By off-shoring its customer call center, even if Zappos offers wages and perks much higher than the going rate, it would stand to save substantial amounts of money. Do you think Zappos should consider this? Why or why not? Use credible sources and research to support and explain.
3. In what other ways do you think Zappos can affordably enhance its customer service? Use credible sources and research to support and explain.
Make sure you format your papers in proper APA 6th. Be sure to properly cite your sources inside your text using APA 6th citations rules as well as proper APA referencing guidelines in your “References” (bibliography) section at the end of your papers.
Your written weekly assignment paper should be at least 1,000 words in length.
Chapter
14
How Will You Run Your Business? 332
Facilities 333
Manufacturing a Product 335
Design your production process 336
Best practices in manufacturing 337
Quality management: ISO 9001 338
Outsourcing and offshoring 339
Producing a Service 340
Research and Development 341
Supply Chain Management 342
Finding suppliers 342
Inventory management 343
Order Fulfillment and Customer Service 347
Insurance 348
Emergency Preparedness and Disaster Recovery 349
“Green” Your Operations 350
Other Operational Issues 351
Real-World Case
If the Shoe Fits (and even if It Doesn’t):
Customer Service at Zappos 352
Critical Thinking Exercise
turn the tables on Costs 354
OPERATIONS
ERA_Ch14.indd 331 6/18/12 9:54 AM
e N t r e p r e N e U r S h I p a r e a L - W O r L D a p p r O a C h332
How Will You Run Your Business?
Entrepreneurial ventures often are launched and funded based on a great
idea or a terrific management team, yet they rise and fall—make profits
or lose money—based on their operations. How will you actually produce
and deliver your product or service? How will you make sure you have the
right goods at the right time—and not too many goods, or the wrong ones?
How will you ship, store, and manage your inventory? If you run a service
business, how will you make certain that your service providers are in the
right place at the right time with the right materials to do their jobs?
The term “operations” covers the entire infrastructure, equipment, processes,
and procedures that enable you to produce and deliver your product or
service in a way that lets you run a profitable business. ...
Adapt, overcome, and improvise words to live by for the supply chain--e parce...Thomas Tanel
In the movie Heartbreak Ridge, Clint Eastwood as Gunny Highway says, “You're Marines now. You adapt. You overcome. You improvise.”
With more than 40 plus years of seasoned and practical supply chain experience, I would like to share with you a military perspective on what Gunny Sergeant Thomas Highway meant and its application to the supply chain.
Management by walking around is a good start here’s what to do while walking-...Thomas Tanel
‘Management by walking around’ is a good start; here’s what to do while walking. Getting out on the floor of the
DC is a crucial management tactic. But if you walk around only once in a while, you run the risk of what Tom Tanel calls the “lip-service presentation and eyewash tour.”
Identifying vulnerability is step one to mitigating supply chain risk -my pur...Thomas Tanel
Supply chains are becoming increasingly complex. Yet many procurement teams are not working to prevent and manage disruptions that could prove costly. In a recent webcast, “Preventing and Managing Supply Chain Disruptions,” Tanel describes costs of disruption to the supply chain and explains why it’s important for procurement to learn to identify vulnerabilities and develop a plan to mitigate risk.
How to make eoq relevant again -logistics & supply chain world july 2012Thomas Tanel
The concepts of Just-in-Time (JIT) and Lean have led many to question the continued relevance of Economic Order Quantity (EOQ), whose function is to identify the optimum order with the lowest cost parameter. In response, yes, it is still valid as a basic analytic tool, however, many supply chain industry executives perceive it as “old school” or don’t even know about it. My experience has shown that
many individuals and some companies cannot apply it—even if they wanted to—because they do not know their acquisition costs to place an order or their yearly inventory carrying cost rate.
Count the ways distribution centers add value 2nd--supply chain digital septe...Thomas Tanel
N RESPONSE TO THE “NEW Normal”, the business
landscape has changed fundamentally; tomorrow’s
distribution environment will be different, but no less
rich in possibilities for those who are looking for ways
to add value. With new trends and an “e-volution” in
moving and storing materials comes the inevitable need
to reconceive how we operate our distribution centers
to stay competitive. Outdated philosophies not based
on the “New Normal” may prevent us from recognizing
and integrating some of the new ways the distribution
facility or DC can add real value to our operations.
Count the ways distribution centers add value 1st--supply chain digital augus...Thomas Tanel
IN RESPONSE TO THE “NEW Normal”, the business
landscape has changed fundamentally; tomorrow’s
distribution environment will be different, but no less
rich in possibilities for those who are looking for ways
to add value. With new trends and an “e-volution” in
moving and storing materials comes the inevitable need
to reconceive how we operate our distribution centers
to stay competitive. Outdated philosophies not based
on the “New Normal” may prevent us from recognizing
and integrating some of the new ways the distribution
facility or DC can add real value to our operations.
Assurance in uncertainty -logistics insight asia september 2012Thomas Tanel
For purchasers and suppliers who increasingly share vital information and resources, their relationship has evolved from mere transactions into a working business relationship.
A shift in sourcing strategies by mary seigfried -inside supply management ma...Thomas Tanel
Low-cost-country sourcing became popular decades
ago, but many supply managers found it to be a shortterm
strategy, says Thomas L. Tanel, C.P.M., president
and CEO of CATTAN Services Group, Inc. in College
Station, Texas. Now supply management professionals
are turning to best sourcing, which Tanel says also is
referred to as best-country sourcing or value-country
sourcing.
Where's my stuff -logistic insight asia october 2012Thomas Tanel
Trading partners need the capabilities to track, trace, and control the progress of the entire logistics transaction. All partners need access to real-time information for collaboration to work. Supply chain celerity is necessity as today's supply chains move at a higher velocity than in the past.
Help employees meet great expectations -mh&l august 2012Thomas Tanel
Warehouse workers don’t do the same task the same way each and every time. Observing what really happens on the floor is key to developing good performance standards. Every warehouse manager has likely heard “What
gets measured gets done.” Measuring and
monitoring operations are key to managing an
efficient, productive facility. Therefore, developing and
implementing an employee performance expectations
program shouldn't be taken lightly.
The 4 s how do you bring purchasing skills to the process of 3pl selection--m...Thomas Tanel
The 3PL contract cycle can be managed just like any other outsourced services
procurement, and has four distinct segments that we will call the four S: Source,
Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.
Buying Transportation and 3rd Party Logistics Services-Part IIThomas Tanel
This executive briefing will help purchasing and supply professionals better understand their transportation and 3rd party logistics needs and develop sourcing strategies to fulfill those needs. Part II of two parts.
The session will focus on three topics. First, the terminology and economic basics of transportation and 3rd party logistics will be discussed. Next, alternate transportation/3rd party logistics strategies will be discussed. This topic will include a discussion of the advantages and disadvantages of private and for-hire alternatives. The final topic will identify and discuss alternative sourcing strategies when using for-hire transportation and 3rd party logistics services.
Cost Reduction Strategies:Focus and TechniquesThomas Tanel
This is a highly concentrated presentation that addresses the differences among price, cost, and TCO; what cost reduction strategies to focus on; and an overview of various techniques, as well as when and where to use them. Faced with excruciating competitive pressures, many senior C-Level executives require maximum effort from every part of their organization to survive. Today, purchasing, acquisition, procurement, contracting, and supply management professionals must be the most progressive cost reduction oriented group in the company.
For many organizations, senior C-Level executives set forth annual purchasing, acquisition, procurement, contracting, and supply management goals that mandate cost reductions. Regardless of the cost savings, avoidances, or containments achieved previously, you are faced with new cost reduction initiatives and objectives.
To make the goal of cost reduction a reality, we cannot focus solely on the price. We must examine the total cost of ownership to your organization, which means moving beyond the organizational environs to include suppliers, internal customers, other allied business functional entities, and external customers. By working both internally and externally with these stakeholders, cost reduction opportunities will become visible.
A typical purchasing, acquisition, procurement, contracting, or supply management professional will help reduce supplier prices and avoid incremental costs. A good purchasing, acquisition, procurement, contracting, or supply management professional will reduce costs by lowering both costs of acquisition and risks of supply. A great purchasing, acquisition, procurement, contracting, or supply management professional will reduce total costs across the board, increase service levels to the internal customer, make a significant contribution to the bottom line, seek value-added opportunities, and help to delight the organization’s customer. This type of professional also balances supply related costs and cycle time for the lowest overall cost, at the best value, while seeking risk optimization rather than risk minimization strategies.
International Logistics & Warehouse Management Thomas Tanel
This presentation is designed to take an astute quick look at international logistics and warehouse management, both in terms of today's global supply chain and in the demand flow management process, so you can know how to make the most of this strategically. You've probably heard something about these topics. You may even be somewhat familiar with them. But how much do you really know about their strategic importance?
In an international logistics and warehouse management system, cost-to-cost "trade-offs" available through systems analysis are easy to identify. One example is using premium transportation for small, time-phased purchased lots to reduce inventory investment and lower safety stock. Another might be using a distribution center for freight consolidation or Crossdocking to improve customer service levels and avoid material handling inefficiencies. Yet another might be the use of a blanket agreement (with a rolling forecast) with your supplier. By aligning supplier capacity to your customer schedules and your inventory goals, you gain pipeline visibility through automated order tracking and alerts in addition to lowering costs and raising customer service levels. The overall goal, to achieve a fully integrated logistics approach, is to realize maximum trade-offs among basic functional activities such as warehousing.
Traditional Logistics and Warehousing channels are indeed changing. As organizations move from mass production and mass distribution to lean manufacturing, postponement, and mass customization, creative approaches are needed in the management of logistics and warehousing. The challenge is always present, because different customers may demand different levels of service. Demand often cannot be forecasted, especially if one must deliver customized products or services exactly where the customer needs them on a global scale at multiple locations.
Businesses today must understand that they are competing on the basis of time more than on any other factor. The rigors of international logistics require that you take action to meet your customers’ demand for faster, more frequent, and more reliable deliveries. Your suppliers need to meet increasingly precise inbound schedules. Tomorrow’s customers are more likely to be in another country or continent than they are likely to be from across town, in another state, or in another province. In addition, diverse countries use different formats for weights and other units of measures, as well as many countries and localities have different licensing requirements and charge different duties, value-added taxes (VAT), and fees, which altogether amount to a major content-management challenge for your Global Trade and Logistics IT systems.
This presentation is designed to give purchasing, materials, supply management, sourcing, contracting, logistics, acquisition and procurement personnel a process of value measurement to quantify the value of purchased goods or services. Learn how to use Value Analysis to target goods and services where cost can be reduced, performance improved, quality enhanced, non-essentials eliminated, downsized, or consolidated through a step-by-step process of value identification and measurement.
The genesis of value analysis and value engineering can be traced to similar, parallel developments in the late 1940’s taking place at General Electric Company and Ford Motor Company. As a concept definition: it is the organized and systematic effort and study directed at analyzing the functional requirements of the system, product, equipment, facility, service or project for the purpose of achieving the lowest overall total cost at the best value. This means consistent with the needed performance, reliability, quality, and maintainability.
Join the trend of many purchasing, sourcing, contracting, and supply management organizations who are reaping the rewards of Value Analysis (VA) and Value Engineering (VE) as a practical tool to improve performance and reduce the cost of goods and services. Their experience with cost reduction projects reveals that by merely determining what things cost and documenting cost breakdowns, one can reduce costs 5%. Improving the choice of material, conceptual design, and methods can further reduce cost by another 10%. Finally, developing a better way to perform what a project or a service was originally intended to do, one can save even more—20-30% and beyond!
Not convinced of the critical importance of value analysis/value engineering VA/VE--- then you must not be interested in product enhancement, service concept augmentation, cost reduction, and profit improvement. Those kinds of payoffs don’t come easily, however. Success depends on three things: understanding of the concept by those who will be involved, strong top management support, and enthusiastic team or project oriented direction to get and keep the program rolling.
No wonder that Purchasing magazine for years dedicated an annual issue to its “Value Analysis of the Year” Awards. Why? According to experts, VA/VE can make a difference: simple projects can take anywhere from one day to six weeks to implement with savings up to $2,000; intermediate projects can range from six weeks to six months with savings of $2,000 to $10,000; and complex projects can take six months to six years with savings ranging from $10,000 to $1 million.
Logistics and Supply Chain Management-OverviewThomas Tanel
This presentation is designed to take an overview of global supply chain logistics, both in terms of today's supply chain and in the demand flow management process, so you can know how to make the most of this powerful tool. You've probably heard something about these topics. You may even be vaguely familiar with them. But how much do you really know about their strategic importance and the specific benefits you can gain from having a solid understanding of them?
Here's the best way to investigate global supply chain logistics and the impact it can have on your organization. You will have the opportunity to explore a variety of logistics areas , extrapolate their meanings in ways that are appropriate for strategic planning, and apply the techniques needed to make it all work for your organization.
Your business needs and technology are in a constant state of rapid-fire change, but you can count on one thing remaining constant: the need to align logistics strategically with your market needs in order to gain a competitive advantage. This alignment requires building a supply and demand system that truly helps you respond to worldwide changes in sourcing and ever-shifting customer demand. What is the potential effect that global trade management will have on your supply chain? How do you convert digital value inputs into logistics value-added outputs? How can you harness the power of global supply chain logistics as a significant force in the execution of your corporate strategy? How can you gain the information you need to translate abstractions into concrete benefits through supply chain management and continuous flow distribution?
The 4 S's: For-hire Logistics and Transportation ServicesThomas Tanel
The 3PL contract cycle can be managed just like any other outsourced services procurement, and has four distinct
segments that we will call the four S: Source, Solicit, Select, and Secure. Proper execution of each segment is essential to developing and maintaining successful 3PL relationships.
Warehouse Operations and Inventory Management Thomas Tanel
Companies that make the best use of the basic principles of planning and managing warehouse operations and inventory management have a competitive advantage. Organizations that lack warehouse strategic planning and inventory operational excellence lose profits, market share, cost advantages, and market leadership.
Traditional Supply Chain and Logistics channels are indeed changing. As organizations move from mass production and mass distribution to mass customization, creative approaches are needed in the management of warehousing and inventory. The challenge is always present, because different customers may demand different levels of service. Demand often cannot be forecasted, especially if one must deliver customized products or services exactly where the customer needs them.
Businesses today must understand that they are competing on the basis of time more than on any other factor. The rigors of supply chain management require that you take action to meet your customers’ demand for faster, more frequent, and more reliable deliveries. Your suppliers need to meet increasingly precise inbound schedules. Tomorrow’s customers are more likely to be in another country or continent than they are likely to be from across town, in another state, or in another province.
With a proven inventory management system and an A-B-C Analysis, you can transform your inventory into a proactive force that lowers your inventory investment, reduces carrying costs, boosts confidence in physical supply and distribution service levels, and increases customer and user satisfaction. From a storage and distribution perspective, you, as overseer of the supply management process, should also know how the warehousing layout design criteria and the space and storage schemes affect your material flow, service levels, computerization, and technology options.
Strategic Sourcing: Walking the Tightrope in Developing Sourcing StrategyThomas Tanel
This presentation will focus on developing the sourcing strategy as a fundamental and logical process involving the application of tools by skilled, competent, and knowledgeable purchasers. Simply put, our focus will be on the “how to” in developing a sourcing strategy. Are you experienced?
Topics that will be addressed include spend analysis, categorizing the best opportunities for sourcing group profiles, Porter’s Five Force Model and Sourcing Grids, establishing sourcing group portfolios and supplier portfolios, using the proper RFX format for sourcing, and making strategic sourcing the focal point for supplier negotiations. Participants will view “good practice” examples of the above.
If you find yourself “walking the tightrope” with a strategic sourcing initiative or an ongoing effort, you’ll get valuable information in developing your sourcing strategy. With our five phase approach, we will discuss the following “how to”:
1. Develop sourcing strategies differentiated by expenditure category and based on market dynamics.
2. Deeply involve end-users in sourcing for knowledge and buy-in.
3. Apply a rigorous sourcing approach that examines internal needs against supply market options to find the lowest total cost.
4. Challenge specifications and usage patterns to ensure that each expenditure is providing the best value for the company.
5. Identify, analyze, select, and negotiate with strategically advantaged suppliers, not just the ones with the lowest price today.
This presentation will conclude with a presentation review that can refine your understanding of the factors, tools, and guidelines you need to make your sourcing process more effective and more profitable for your organization.
This comprehensive program covers essential aspects of performance marketing, growth strategies, and tactics, such as search engine optimization (SEO), pay-per-click (PPC) advertising, content marketing, social media marketing, and more
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Exploring Career Paths in Cybersecurity for Technical CommunicatorsBen Woelk, CISSP, CPTC
Brief overview of career options in cybersecurity for technical communicators. Includes discussion of my career path, certification options, NICE and NIST resources.
Spaced out are you making the most of your shrinking space--werc sheet (may-june2013)v41
1. Refocus, Renew Safety
Culture Initiatives
Create environment where individuals
accept personal responsibility for their
safety and their co-workers, too.
A
ccording to the OSHA Pocket Guide, “Warehousing,” more than
145,000 people work in over 7,000 warehouses, and are exposed
to a wide variety of potential hazards. Among the potential hazards that
confront warehouse workers: unsafe use of forklifts; improper stacking of
products; failure to use proper personal protective equipment; failure to
follow proper lockout/tagout procedures; inadequate fire safety provisions; and repetitive motion injuries.
However, most disturbing is the
statement that the fatal injury rate for
…the fatal injury
the warehousing industry is higher than
rate for the
the national average for all industries.
Further, addressing those individuwarehousing
als who focus on safety program costs
industry is higher
vs. the potential savings these programs
than the national
can achieve, an APL Logistics white
paper, “Warehouse Upgrades That Pay,”
average for all
reveals, “your payment for workers’
industries.
comp claims might represent as little as
20 percent of what those claims-related
injuries actually cost your company.” It cites a Liberty Mutual survey where
nearly 40 percent of the respondents report that for each dollar in direct
costs they spent on injuries, they spent anywhere from $3 to $5 on indirect costs such as lost productivity and time spent training a replacement.
Bottom line: If you have a profit of just one percent, you’ll need to
earn an extra $100,000 in revenue, according to the white paper, to offset
every $1,000 workers comp injury your employees incur.
continued on page 2
Information for Members of the
Warehousing Education and Research Council
maY –June 2013
In this issue...
It’s Who and What You Know
5
Today’s logistics professionals have more challenges
than ever—here’s how to face them.
Publications from WERC
Consider adding these pubs to your continuous
improvement arsenal.
8
WERCouncil Circle of Acclaim
2012–2013 Recipients
9
2013 WERC Conference a Success
The first highlights from Dallas.
10
Spaced Out
Are you making the most of
your (shrinking) space?
S
candinavian Internet PC and electronics retailer
Komplett recently faced a dilemma that many
companies face these days with its DC: Big growth had
led to a facility that was bursting at the seams. And like
many others in the same situation, expanding the current
facility wasn’t an option, so Komplett had to find another
solution.
For more than a decade, the company had filled
orders manually. This worked until SKU proliferation led
to offerings of more than 10,000. Rather than focus on
more storage, Komplett looked to increase its operational
efficiencies. The company weighed a variety of options
and ended up selecting an automated storage and fulfillment system by Swisslog, called AutoStore, which the
company also provides in North America.
Since implementation, Komplett has added storage
density and now can handle double the throughput it
managed prior and did it with its existing labor force.
Komplett is not alone in the increasingly common
continued on page 6
Conference Highlights, pg. 10
2. faciliti e s
Spaced Out continued from page 1
problem of rapid growth with no option for additional
space. How companies come to this place is varied
and so are the solutions to their problems, but there
are some common guidelines that can be applied in
most cases.
Why the storage shortage?
response times,” says CATTAN Services Group’s Thomas
Tanel, president.
One segment that is particularly hard hit in this area
is processed and frozen foods. “This is an area that has
experienced huge growth over the past 10 years,”
says Leber. “Space is a real premium for this segment
right now.”
What happens to many companies is the need to
manage tradeoffs, says Tanel. “You have to balance transportation, inventory control, warehousing and customer
service,” he explains.
Castaldi adds that many companies are left feeling
torn between traditional warehouse space and distribution space. “If your goal is to pack the most into a space,
you’re looking to maximize your warehousing,” he says.
“If you are looking to get the most out quickly, you’re
talking about distribution. It’s a battle of realities for
most companies.”
Komplett’s issue was the one that causes the majority of space issues today: growth. Chris Castaldi, manager
of business development at Carlstadt, NJ, based W H
Systems, says that SKU proliferation is behind much of
what companies grapple with these days. “Companies
just face more offerings and diversification than ever
before,” he says. “For instance, you’ve got a retailer who
goes direct to consumer with very seasonal items. As it
grows on the Internet, the company can no longer control what people buy and when. So the product is being
ordered year round rather than seasonally, which means
the company must now keep the product in stock at all
times.”
The addition of e-commerce to traditional retail
It would seem that when faced with space conoften puts company’s space availability over the top as
straints the knee-jerk reaction would be to add more
well. “This leaves companies with more SKUs to make up
space via an expansion or a new facility. But for most
their sales, but their sales revenue remains the same,”
companies, that’s not the number-one choice.
says Swisslog’s Bill Leber, director of business developWhy not? It all comes down to capital. According to
ment. “The result is needed space but that can be cost
Leber, “capital investment casts a long shadow. You have
prohibitive.”
to buy land, a building, and new equipment.
British fashion
You need to be very sure about your business
“You have to balance
retailer River Island
needs for a long time to come if you are going
transportation,
found itself in just this
to make that choice.”
inventory control,
situation. When it
added in e-commerce
warehousing and
to its traditional storecustomer service.”
fronts, the added
Tom Tanel
volume put a strain on
its DC. Rather than
investing valuable capital into additional space, the company sought out
high-density storage solutions, which
opened up some 5,000 SKU locations.
There’s also the challenge of
higher volumes of orders. “With an
ambiguous and volatile business
environment where sales are
expected to or will grow, preparing
the product offering for sale becomes
more complicated as the corresponding need for distribution to operate
with higher throughput volume
demands and shorter order cycle
When more isn’t more
6
/ May–June 2013
3. Space Management Guidelines
at a Glance
Tanel says that most companies do consider adding
space. “However,” he says, “it is sometimes necessary to
review the presently occupied facilities to determine if
one can increase productivity by changing the physical
and spatial relationships between operations,” he explains.
Which usually brings a company back to that
big capital investment. “It’s not only looking at the structure investment, but also the internal operating systems
managing material flows,” says Tanel. “Each of these
systems comes with an added cost, and depending on
how advanced the facility is, the costs can be very high.”
In addition to the costs, says Castaldi, there are other
factors that can make adding space unattractive. “There
are often limitations on labor, tax laws and land, all of
which play into how attractive or unattractive a location
may be for building,” he explains. “So you need to ask: do
you need more space or do you need more efficiency?”
More often than not, the answer is efficiency.
How to gain space efficiency
Leber says that even if a company is not crunched for
space, most DCs have areas where they can improve in
space efficiency. “Most companies don’t use what they
have efficiently—they don’t look in the right places,”
he says.
To figure out the proper space utilization, Castaldi
recommends looking at processes first. “Why do you
need the extra space?” he asks. “What brought you here?”
Tanel recommends conducting a thorough space
survey. He’s designed a system for doing that, which
includes the following columns across the top:
Available at present (sq. ft. and attainable height)
According to Thomas Tanel, president of CATTAN
Services, before you can consider making any changes in
your current mode of operation, you have to thoroughly
understand how your warehouse runs. To do this, you have
to do the following:
Understand your company’s business by quantifying
present requirements and forecasting future growth
potential.
Know your square feet requirements by:
1. Function
2. Material flow
3. SKU volume and velocity
4. Inbound/outbound throughput characteristics
Establish true priorities by employing Pareto’s Principle
and ABC Concept to basic warehouse flow patterns.
Employ aisle layout and allowance that maximizes movement efficiency and maximizes available floor space and
cube loss.
Design your space plan for the rule, not the exceptions,
for smooth, efficient, quick, and direct in-out material and
work flow.
Ensure accurate location, proper identification and good
illumination of all SKUs in storage.
Plan storage space for easy inventory rotation to permit
FIFO or LIFO inventory valuation control.
Review material handling and storage equipment compatibility, adequacy and reliability in space plan analysis.
Develop standard pack and unit load hierarchy for all
SKUs material handling efficiency and material location
storage philosophy.
Needed at present (sq. ft. and required height)
Future needs (sq. ft. and required height) for
1-2 years and 4-5 years
The operational activities that are measured against
this include:
Receiving and inbound
Staging and processing
Put-away and storage
Value-added services
Picking and replenishment
Shipping and outbound
Offices and miscellaneous
After going through the facility space survey, Tanel
recommends companies ascertain whether they have
properly slotted the DC. “If so, it should optimize
your space utilization and minimize the time and
effort required to efficiently receive and store incoming
products,” he says. “This determines the most efficient
placement of products and improves the speed and accuracy of picking and replenishment. Each DC is unique, so
proper slotting depends on factors such as your distinct
product, movement and storage characteristics, product
seasonality, turnover, promotions, and sales or usage
projections.”
Castaldi recommends that you have a leader to
spearhead the assessment process. “You need someone
who can bring everyone together and figure it all out,” he
says. “This might be a consultant or it might be someone
from within.”
The assessment team should include people who
buy, people involved in processing, and people who set
future plans for the company, according to Castaldi. “You
have to pull all the information together and understand
why and when you ran out of space,” he says.
continued on page 8
/ May–June 2013
7
4. Spaced Out continued from page 7
Upon assessment, many companies will learn that
they’ve grown up piecemeal and have added small bits
and pieces over the years, says
Leber. “This happens because it’s
Upon assessment,
impossible to just shut down and
reorganize a DC,” he explains.
many companies
“So companies end up adding in
will learn that
new equipment and processes here
they’ve grown up
and there and you become fairly
piecemeal and have inefficient compared to a new comprehensive integrated facility.”
added small bits
Once all the operations have
and pieces over the
been assessed, a company needs to
put a plan of action into place.
years.”
Options for improved space utilizaBill Leber
tion include right-sizing locations
through improved slotting; using
un- and under-utilized space like floor-to-truss and
closer pallet beams. Get rid of obsolete inventory that
might be clogging up shelves.
There are also higher tech storage density solutions
available, like those from Swisslog. “All of our products
use space better than manual operations,” says Leber.
“You can go higher and use full vertical space as well as
bring goods to people rather than the other way around,
freeing up the travel path.”
Castaldi’s W H Systems works as a systems integrator, helping companies source products and bring it all
together via software. “We take measure of where a
company is and has been and help them figure out
where they can make improvements in their operations’
efficiency,” he explains. “Most people have reached a
point of diminishing returns when they come to us.”
Even when not feeling space constrained, most
companies probably can do better with the space they
have, says Tanel. “I guarantee that a thorough assessment of your facility will turn up a few surprises,” he says.
“And the biggest surprise is going to be this: “You are not
effectively using space.”
Chris Castaldi, W H Systems, www.whsystems.com
Bill Leber, Swisslog, www.swisslog.com
Thomas Tanel, CATTAN Services Group, www.cattan.com
Publications from
2013 DC Measures
WERC members can download the newest report on warehouse metrics for NO CHARGE.
Go to the WERC home page and click on the link you’ll find there.
You might also consider adding these pubs to your benchmarking
and continuous improvement arsenal:
Warehouse and Fulfillment
Benchmark Best Practices
Learn about qualitative warehousing best practices.
Helps identify process strengths and weaknesses in
an organization so a roadmap for improvement efforts
can be crafted.
Warehouse Manager’s Guide
to Benchmarking
Read about the different kinds of benchmarking,
why it’s important to benchmark, how to choose
the right metrics, how to analyze your company’s
performance and techniques for communicating to
get the results you need. 2nd Edition, 2010
www.werc.org
8
/ May–June 2013