January 17, 2021
supply chain productivity

Supply Chain Productivity improvement : Top 5 Ideas

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supply chain productivity

 

Supply chain Productivity improvement has been one of the key agendas for Supply chain function. Various ideas and approach are used to improve productivity. Lean and Value stream mapping are frequently used tools to eliminate non value add activities.

There is always an opportunity to review the processes with lean mindset and eliminate waste from the value chain.

In Covid-19 scenario, with social distancing as new norm, supply chain productivity improvement and employee productivity has become all the more important. Organizations need to ensure proper distance between working stations and avoid un necessary crowding of people.

Automation which so far was limited to handle complexity and scale and avoid manual interventions has got a new lease of life with organizations leaving behind only return on investment criteria and being more flexible in accommodating automation to improve productivity and sustain business continuity.

By supply chain productivity improvement, employee does more value-add work and achieve more in less time resulting in engagement and satisfaction.


Sharing 5 useful Ideas for Supply chain productivity improvement :

Supply Chain Productivity Improvement 

supply chain productivity improvement

1. Measure productivity  :

First step is to measure the productivity to establish a baseline and understand where do we stand in terms of performance as on date . Productivity and resource utilization to be measured for Manpower, warehouse space, Trucks, Material Handling Equipment, Docks and other resources .

Define a standard performance criteria of productivity which can be derived basis industry benchmarking. Collect data and information from the field on actual performance. For example, in a warehouse operations total output in kilogram to be divided by total number of manhours to arrive at kg/manhour 

Performance of each warehouse activity can be measured by total number of goods handled in kg vs manpower deployed in hours. Compare standard with actual to identify the gaps in terms of where we are are where we need to be. Review the gap and do root cause analysis using 5 Whys method 

Identify action list for supply chain productivity improvement. Primary actions include either increasing volume output with same number of people or reallocating and reducing manpower which are not required. One of the reasons for productivity losses I have experienced is that all the resources are not available which lead to manpower idling.

For example, in loading operations if vehicles, dispatchable stocks, docks and stock plans are not available then loading crew will be idle leading to loss of productivity. 

Benchmarking internally within multiple warehouses can provide a detailed understanding of that which operations are efficient and which one needs improvement. One of the common measure for productivity measurement  for loading and unloading activities is Kilogram handled per manhour .

This measure  can be used uniformly across Finished good loading and  Raw Material unloading activities to compare resource occupancy and take actions to improve utilization 


2. Map resources to activity:

Warehouse and planning activities are not uniform throughout the month and  keep on changing at day level.

Incoming arrivals can be on the higher side in the beginning of the month as suppliers want to push stocks from their factories at month end. Similarly, they is high volume activity in distribution centres during the last week of the month to achieve sales targets.  

Resources can be made flexible to ensure their availability basis the requirement. Planning resource basis the workload pattern can eliminate idle manpower.

3. Go lean for supply chain productivity improvement :

Eliminate unnecessary activities which do not add value. Lean is about identifying waste activities which do not add any value to the consumer which can be done with value stream mapping to identify idle resources, long wait times or non moving inventories. Then by using brainstorming process, opportunities can be listed and actions to be taken for supply chain productivity improvement

Define the work requirement first to estimate resources than defining resources and then estimating the work requirement. Many times idle resources keep adding work to show that they are required although output may be negligible.

Reducing inventories also lower resource requirements like storage space, security personnel, stock counts checks, housekeeping although handling will depend upon volumes. Lean value stream mapping will support to understand the wait time and idle time in material flow.

These non value add activities can be combined or eliminated

 


4. Automation:

Most of the organizations look for automation as a solution when they are not able to handle complexity and scale and errors start having high impact on customer service. Implement automation to handle complexity, scale and achieving work accuracy for supply chain productivity improvement. 

There are many supply chain processes which can be automated using advanced information technology tools for example, supplier selection and price negotiation, production planning and detailed scheduling, auto replenishment system, vendor managed inventory, transportation management system and warehouse management systems. 

Automation in these processes improve performance by bringing process consistency, information visibility and accountability for all stakeholders. Return on investment and adaptability of solution to existing process needs to be evaluated before implementation.

Supplier should be evaluated for good service and  support for any breakdowns post installation of automation solutions.

In planning function, automating the basis processes like Material requirement planning can bring lot of efficiencies. Purchase Requisition creation, PR to Purchase order conversion and sharing Purchase orders with suppliers, all these processes can be automated.

 

5. Information Digitization:

Automate the information systems to collect, analyze and report information. Manual data collection can be stopped if data is entered into the system at the point of generation.  IT systems enabled us to work from home during Covid-19 pandemic and kept the organizations running.


As organizations plan to go lean in their structures , employee productivity is going to be important measure to improve supply chain performance. Companies have realized that Pandemic has provided them with an opportunity to evaluate that how much lean they can go with manpower without any impact on supply chain operations.

With social distancing as the new norm, supply chain productivity improvement and employee engagement is going to one of the most important metrics for organizations to drive efficiencies in future.

How to build Robust supply chain : 50 Essential Building Blocks

To know more about supply chain productivity improvement, also read

Improve your warehouse productivity through product slotting

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Anupam Shrotary

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