Supply Chain Synchronization: The tight co-ordination of a variety of data, transaction and physical process and activity schedules of a number of players in a given supply chain or grouping of supply chains.
As supply chain management advances to extend across the supply chains of multiple companies, it becomes necessary to tightly synchronize supply chain data, methods and scheduling.
Supply Chain Synchronization begins with base product data in electronic catalogues, to standard transactions such as purchase orders, shipment notices and supply chain exceptions.
Eight dimensions of the supply chain are listed below and are a compendium of various individual supply chain strategies which are to be now combined on a multi-company basis for greatest success and effect;
1. People Communication, Co-Ordination & Education
The people or cultural issues surrounding Supply Chain Synchronization are hugely important. That is why we have identified People Communication, Co-Ordination & Education as the first dimension requiring synchronization as a key foundation for the success of the supply chain synchronization process.
Regardless what anyone tells you about the latest and greatest of supply chain, materials handling or logistics systems, it is still to this date the people that make it all happen. Without the support of motivated, interested and educated people not even the worthiest of supply chain ventures will succeed even in half measure. In fact because of the cross company, boundaryless nature of the synchronization project, this type of human understanding and buy in is even more critical. Synchronizing people to ensure the synchronization of process, information and supply chain activities can be one of the most challenging and time consuming activities around, but the results can lead to greater synergies and levels of integration than have ever been previously achieved.
The first step in the People Synchronization process is education and literally explaining in as simple terms as possible what the Synchronization process is, what it intends to achieve, how it intends to achieve it and what is the individual’s or group’s part in making it all happen. This level of direct communication must be continued throughout the process in order to facilitate the gathering of needed information and the development of the detailed linkages required between the employees of participating firms to ensure success. Additionally, once the information has been gathered and analyzed, direct facilitation between the parties must be carried out to ensure product, ordering and systems information are correctly updated to support the co-ordinated scheduling upon which supply chain synchronization is based. Again it is the people aspects and diligence of those involved which support this and ensures that as few exceptions as possible exist once the scheduled supply chain is actually ” switched on “. Beyond this level comes the actual execution layer when after implementation, effective communication is needed to tweak and fine tune the synchronized supply chain. Often this occurs when faced of unforeseen difficulties, and it is the strength of prior personal contact and buy in to the vision which makes the difference in motivating individuals to make the rapid changes required to keep the initiative on track. All of the following dimensions described throughout this article are important to the process, but without effective synchronization of the people involved, you are probably doomed to failure or at best mediocre success. As you can see from above, the people aspect touches all of the other dimensions and therefore justifies its position as the first dimension in Supply Chain Synchronization.
2. Complete Process and Delivery Timing
Once one is on top of the people aspects and has achieved buy in from all involved players, the next dimension of Supply Chain Synchronization is the development of Complete Process and Delivery Timing or the actual supply chain schedule. This development is somewhat of an art in itself as it is different for each supply chain studied and involves the mapping and understanding the current supply chain flows and timings followed by the development of the new or optimized supply chain synchronization model. The interesting aspect of this comes from the fact that the diverse flows and eccentricities of multiple companies are coming together presenting simultaneous multiple challenges from cube, weight, density and compatibility standpoints, all within the associated cube and weight capacity parameters of the transport mode selected. On top of this, it is also important to note that due to capabilities and limitations of various firms, that this schedule will almost always vary between different participants and ultimately require ongoing change and modification as these capabilities and technologies change over the life of the program.
The first step in the synchronized design is mapping of the current process to be synchronized from start to finish, including volume and timing aspects for all potential participants. Once this is completed, a number of trends and levels of competency within the group of players will become apparent.
As well current start to finish supply chain timing can be compared with the potential optimal timing model to develop a comparison of the current reality to the proposed vision and identify the rough magnitude of the opportunity at hand. Based on the optimal model developed, the new process flow and timing should then be defined allowing appropriate variance in timings for the different levels of players identified. Initially, it is always better to error on the safe side when setting delivery lead times for given firms to ensure that the schedule is consistently met, which lead times can subsequently be tightened should improved capabilities be confirmed.
Once this schedule has been developed for each player, all associated volumes and density information can then be overlaid to define the entire supply chain flow. After all have been combined, minor adjustments may be required to fine tune, but now a relevant model will be in place from which expected delivery frequency determinations can be made on the newly synchronized supply chain. This will also now provide you with the information to go back to the participants and define specifically for each, their requirements to become part of the new synchronized process. It will also become apparent over time as volumes grow, the levels at which additional delivery days can be added to the program. Additionally, as other potential destinations are investigated as shipping locations for the program, similar specific process models will be required for each.
3. Product/Information Linking
In order to develop a true synchronization process, it is necessary to connect the physical aspects of the supply chain with the information systems methods which will be utilized to track, manage and improve the supply chain synchronization process. Product/Information Linking is therefore the next dimension in Supply Chain Synchronization and can be rapidly achieved through the use of an accurate product file including unique sku identifiers, cube, weight, unitization, temperature control and product compatibility information. This matched with an appropriate barcode symbology system will allow for the required tracking in a seamless and accurate fashion. It is important out of the gate to rapidly correct any inconsistencies discovered in these files during product processing, and to maintain the product file in an up top date and accurate state as products are added, deleted or modified in cube, weight or tie pattern. Due to the multicompany nature of the supply chain synchronization process, it may be necessary to apply this barcoding at a central processing point unless general buy in and a standardized labeling system can be installed in each participant’s warehouse. It is far better to apply the synchronized labeling at the time of pick to eliminate added steps in the process and the potential for mis-application of labels when this is completed as a secondary process.
4. Order Timing and Unitization
Order Timing and Unitization is the next dimensional level of supply chain synchronization required to assist in achievement of the completely synchronized supply chain. This aspect performs two critical tasks in improving the overall process, both tied directly to the order creation process. One, the timing when an order is generated is a key component in ensuring the supply chain schedule is met. I cannot stress enough the critical nature of correct purchase orders creation at the correct time to support and facilitate the entire synchronization process. In this case, garbage in/garbage out could not be even more appropriate. If the order is generated late, then supply chain partners cannot hope to meet their part of the schedule, causing the order to miss an entire replenishment cycle. This will then throw off the potential balance of co-ordinated loading and movements for any number of other related orders in the same synchronization sequence. In the same way, the order defines the product quantities and to meet the highest level of synchronization efficiency, these should all match tie/tier and or pallet multiples for most products. This is a critical point of control to allow for efficient handling and loading of products for greatest vehicle cube utilization, reduced handling, rapid checking and also practically eliminates damage from the transportation process. Careful initial validation and ongoing follow-up of the synchronization dimension of Order Timing and Unitization is critical to the physical success and efficiency of the overall synchronization effort, and in some cases this important step is overlooked leading to only partial improvements in the total supply chain process. The critical factor for completing and maintaining this level of coordination to the process is by supporting and utilizing appropriate information movement and synchronization activities which will be discussed in the next section.
5. Information Movement and Synchronization
Information Movement and Synchronization Activities must be developed in parallel to the overall effort and the collection and monitoring process streamlined as much as possible to minimize additional data collection. In other words the data collection should take place as a byproduct of the supply chain process, not become an activity unto itself. This is partially completed by the two items identified above, the barcode symbology and the Purchase Order. As the two key data streams, collection can be easily integrated into the supply chain synchronization processes by integrating scanning into the handling process and by collecting electronically at source all of the purchase orders generated for all movements in the process. Now this may sound like and indeed is a large and valuable body of data, but collected in this fashion can be almost transparent and non-invasive to those carrying out the process. A sequence of rules can be developed to effectively test each of these items as they move through the process and flag those requiring attention/action as exceptions, the management of which exceptions represents the next dimension of synchronization to be discussed.
6. Process Exception Monitoring and Reporting
Process Exception Monitoring and Reporting is key to actually maintaining the order the synchronization process has put to all of the supply chain activities which are involved in the total process. There are a number of exceptions to both scheduling, format, unitization and base data sets which all will generate relevant exceptions which must be acted upon in some cases and collected for monitoring, reporting and improvement purposes in others. If all of the above dimensions have been properly synchronized, the remaining exception levels should be manageable, however if there are gaps, flaws and inaccuracies in earlier information used to build the synchronized system, then these will become readily apparent. These exceptions require immediate attention and correction or the entire process will be in jeopardy and will rapidly deteriorate back into a chaos perhaps worse than the original supply chain flows merged into the process. There is reporting at two levels, one immediate where exceptions are flagged and delivered for immediate attention to the supply chain partner required to act on correcting the exception, which can be done either electronically through internet messaging or via equally effective auto generated faxes in less sophisticated implementations. The second level of reporting is on a cumulative basis, period by period of the key metrics monitored to maintain and enhance the synchronization process to the key movers and shakers at the partner firms. These are the reports which will point out the significant ongoing issues arising within the process for correction as well as identify perhaps uncooperative players who are not meeting their part of the program objectives. There only remain two dimensions to complete the synchronization octagon and they relate to the actual physical aspects and transportation mode issues which equally require the synchronizer’s attention for complete success in this area. And finally, the need to maintain a dynamic process for continuing adjustment and improvement of the synchronization process to ingrain ongoing change and optimization as the total supply chain changes.
7. Physical Movement and Modal Optimization
In the end it is the actual physical movement of the product successfully, on time and undamaged that defines the success of the supply chain. Synchronization can help this process to be as cost efficient as possible, but it is important not to lose sight of the overall aim. And in the end it is final execution to the customer which will be remembered by clients, not the beautifully attempted synchronization of the process which in their case perhaps failed to deliver. Physical Movement and Modal Optimization is the process which must be synchronized to deliver in this regard and whether services are provided directly by the synchronizing party or by another supporting carrier, they must in either case be bulletproof ! The result of the synchronization process should allow for the accurate measurement of the Perfect Order rate for the supply channel, which if all is functioning well, should represent significantly improved, if not world class results for this metric. The first step in defining the physical movement process is to determine the required service level or delivery lead time that is desirable or minimally acceptable to the supply channel participants, as this is the base level of service provision required. Once this determination is made and a mode selected the next step is to determine optimal load mix density based on the total usable cube of the vehicle and maximum allowable transport weight. Through this process, one should then be in a position to define the optimal or Perfect Trailer as the goal of the load optimization process, which methodology can then be built into load building algorithms in the provider’s system. This program will be based on the total order flow cube, density and quantities for all products moving to a given destination in the same service timeframe.
8. Dynamic Process Adjustment and Optimization
The final dimension for Supply Chain Synchronization is Dynamic Process Adjustment and Optimization which is the art of developing or defining rules and methods for the successful, ongoing adjustment and optimization of the process given the number of rapidly changing variables which can impact the supply chain. Some examples of these things can be the introduction of specialized, express levels of service to seamlessly recover should your service provider partially fail. Also, the ability to switch to varying size and capacity of containers should volume fluctuations on a given lane and given day so dictate. As well, active analysis of cubic imbalances should be maintained and active solicitation of new partners to balance these should be pursued. Finally, as the supply chain synchronization effort proceeds and grows, so do the destinations, complexity of service and opportunities for greater synergies among the players, and these should also be actively monitored and acted upon when appropriate. There is no doubt that the continual addition of critical mass to such a program will at some point hit justification levels for advanced handling and automation equipment to speed and simplify the process. In the end, it is through careful monitoring of these optimization opportunities which will make the appropriate timing for such initiatives readily apparent.
Concluding, although Supply Chain Synchronization along the Eight Dimensions we have identified is a relatively new entrant to the supply chain supremacy race, there is no doubt that some firms are poised to make rapid progress in these regards. Achievement in this area on behalf of client’s has a special meaning and value which can result in the development of longer term and more integrated provider/customer relationships, the likes of which have only been rarely seen in the world of JIT manufacturing and other similar endeavors. Synchronizing a supply chain is akin to the tuning and skilful playing of an instrument which art takes significant training and personal “hands on” practice, and we hope that the song defined in these Eight Dimensions will allow more practitioners to jointly advance the art of true Supply Chain Synchronization.