Value for the customer service, management, operations & logistics
Communication: we all have it on a personal and professional level. It’s called tribal knowledge. Tribal knowledge means doing something a certain way, because it has âalways been done that way,â without regard to why it was done.
I witnessed a great example of tribal knowledge in the past year within one of my clients’ operations. This particular customer is a major supplier to Boeing. They recognized that with each budget season came a significant increase in logistics costs due to expediting products to Boeing to meet product delivery demands.
Sometime in the past, their team determined that in order to meet the commitment of parts delivery they would need to use an expedited carrier to deliver that product with a guaranteed day and time of delivery. This was only to be done for a short time in order to get past the material constraints placed on them by a supplier. Years later, and long after the material constraints were remedied, they continued to expedite the parts to Boeing.
We were asked to facilitate a Kaizan event on their behalf and discovered the annual expense of $650,000.00 to expedite these parts could be reduced to just under $120,000.00 annually. That is significant savings, and today they continue to challenge us to help them reduce that $120k by 10% every year. We gladly accept the challenge.
Who, on a personal or professional level, doesn’t love budgets? No matter who you are or what industry budgetary constraints are clearly evident, we all are asked to do more with less from both a fiscal and personal time perspective.
I have been extremely fortunate to work with multiple companies, and one item that is gaining more scrutiny is the logistics budget, given the ever-evolving fluctuation of fuel and carrier’s stricter interpretation of rules governing their pricing application or tariffs.
One of my customers was bidding on new business from a valued client. The client would award the business based on the bidder’s ability to fix material and distribution costs for three years. My client’s concern, like most, was how they could possibly budget something of that magnitude given all the variables. We put together a model analyzing the costs of shipping durable goods over the last 15 years. We then applied the math to costs of future shipments, and even different methods of shipping, for their review. Once they were comfortable with the analysis, they applied a margin to each shipment as outline in their deliver schedule, and they were awarded the bid.
Technology is great when applied and used effectively. It can be automated to minimize human error, which can be especially valuable when meeting on time delivery demands of your customers.
Commitments in ‘on time delivery’ are critical in today’s world. For example: in reducing raw inventory levels in just-in-time manufacturing/distribution environments or getting product to your customerâs home to make a special birthday gift for that special someone. In either scenario, your success hinges upon error-free communication and sometimes includes additional costs assumed by your customer.
Consider using automated tracking software within your operation. A retail client of mine offers a broad range of shipping options to their customers and uses just such a system. The proactive system automatically communicates delays and delivery times and is administered by a 214 EDI transmission method we maintain and cleanse on their behalf.
It enhances your customer’s experience, reduces your stress, and gives you more time.
Your Guide in the Supply Chain World
Source: New feed