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The Challenge:Over the Counter (OTC) Pharmaceutical
When Capacity LLC first met Origin BioMed, it was a young manufacturer of an Over-the-Counter (OTC) neuropathic topical treatment. Origin had met with success in Canada, its home market, and was looking toward the US. The company was looking for a distribution partner to help with direct to consumer shipments and a planned expansion into the US retail market. Its products required lot code tracking to individual consumers. An outbound serial number and lot code scanning were required in every case. In short, Origin BioMed needed help in boosting its distribution in order to reach the next stage of its development.
The Capacity LLC Solution:
Capacity LLC had worked with other smaller companies, working toward the next stage of their development. We quickly modified our order management system to capture every lot/serial number for Origin. This process extremely important in managing order fulfillment and inventory control. If a number is not captured, the packing list and shipping label cannot be created and the order cannot settle. We have now used this technology for many clients over a period of many years. At the time, we were the only provider readily willing and able to accommodate Origin BioMed’s needs.
April 29, 2014Kraft Foods office (Photo credit: Wikipedia)
From the smallest solopreneur to the biggest billion-dollar brand, the same supply chain question crops up again and again: what can we do ourselves and what operations should we contract out?
Kraft Foods outsourcing its transportation operations shows that even company’s that you might assume can do it all sometimes see greater value in getting an outside expert in to handle key operations.
The nationwide company will divest its private fleet before the year is out, passing on those key distribution tasks to commercial and contract carriers. As a Kraft spokesperson succinctly put it, the move is designed as “part of our broader integrated supply chain focus on supplier integration.” Even more simply? Some of our logistics partners do this better and more cost-effectively than us.
Questions to Consider When Outsourcing
For Kraft Foods outsourcing is just one of many options available. But what about the small and medium sized businesses (SMBs) that make up most of the country’s economy?
A good supply chain partner is the equivalent of a help button for your business. (Photo credit: gruntzooki)
SMB budgets are obviously smaller and need to be stretched further to compete effectively. While experimentation and improvement is important to every supply chain, SMB owners must be even more certain that the logistics decisions they make are going to reduce costs and/or improve productivity.
If you’re in that position and wondering whether certain portions of your supply chain activities would be better off in the hands of a trusted supplier, ask youself the following questions:
What are the costs? – Consider every element of the operation and what it costs your business to perform. Compare the price and value (note the difference) of what your own internal team would provide versus a third party.
How do those costs vary? – There are more moving parts when you undertake your own logistics. While this gives you individual insight into every detail, it also means that you’ll pay the price for every error, cost increase, or new employee. When you outsource operations, you can often limit your business exposure to such changes, or lock in a fixed price entirely.
Which is more efficient? – Only your own employees can truly know your business inside out, but a third party provider lives and breathes their own industry and will have unique insights to help you improve. If greater efficiency is a key objective, outsourcing might provide not only a supplier but also a consultant for the same price.
What are your key performance indicators? – We’ll make this point again below, but you can only manage what your measure. Having KPIs available to compare performance of internal and external operations will help to make future decisions about who is best suited to the task at hand.
Are you able to apply new technology and methodologies easily? – Your business may be on the cutting edge of technology, but are you able to frequently make large investments to improve your supply chain. For some SMBs these changes need only be minimal and the answer is yes, but often the best way to take advantage of new technology and supply chain methodology is to find a partner whose business it is to stay on top of these things.
The proof is always in the performance, so any outsourcing your business undertakes should be measured from the outset. Hold suppliers to even higher standards than you would expect from your own operation. The best aren’t afraid to report, review and improve (if we do say so ourselves!)
In tough times people often look to the wisdom of leaders – whether political or cultural – to guide their decisions.
General Dwight D. Eisenhower with Sir Winston Churchill, 1951. (Photo credit: Wikipedia)
We thought it would be fun to run some classic quotes through the lens of the logistics professional… it turns out there are plenty of lessons to be learned about the supply chain from these wise voices from the past!
Here are six classic quotes that also hold value for supply chain management:
“Let our advance worrying become advance thinking and planning.”
~Winston Churchill
Worrying solves nothing, of course, but we take this British bulldog’s words in terms of recognizing potential kinks in the supply chain before they occur. As a logistics professional it’s important to run “what if” scenarios and dig into any areas that give you pause for thought. That’s where you’ll find those advance worries turn into advance planning!
“Planning is everything. The plan is nothing.”
~Dwight D. Eisenhower
With rigorous military planning running through his veins, Eisenhower still understood that the majority of plans become useless not long after they’re rolled out. The value of planning is high, however, as defining objectives drives long term strategy. Don’t stray too far from your overall supply chain strategy, but be flexible enough to change the logistics tactics you use to get there.
“Perseverance is not a long race; it is many short races one after the other.”
~Walter Elliot
This prominent Scottish politician also saw the important distinction between tactics and strategy. Logistics involves successfully piecing together any number of moving parts into one working supply chain. Although it may look like one long process, supply chain managers need the patience to think in terms of both the end-to-end system and its constituent parts.
“Geeks are people who love something so much that all the details matter.”
~Marissa Mayer
Marissa Mayer (Photo credit: Wikipedia)
Yahoo’s CEO continues to drive relentless change at the company as she seeks to reinvigorate its name, but that doesn’t mean that she’s not laser-focused on the little things. In a supply chain, the geeks are the managers who still need to poke and prod every idea to understand how it will work to improve their supply chain. Of course micro-management is usually something to avoid, but seeing the supply chain from both a birds eye view and in its minute details is an ability that’s worth its weight in gold.
“Innovation is saying no to a thousand things.“
~Steve Jobs
Apple’s main man always said that he was as proud of the things his company didn’t do as those that it did. Strange words for a man who drove so many innovative products from concept to reality? Not really. It’s easy to get attracted to every new idea that comes our way under the justification of “innovation,” but that word is used to describe almost any process different to what is already being done. A truly innovative logistics mind understands the difference between an oversold suggestion and a game-changing idea.
“Intelligence is the ability to adapt to change.”
~Stephen Hawking
Few would argue with the world’s foremost physicist and a man who can write a book entitled “A Brief History of Time,” and his nuanced take on intelligence. Your business can employ the smartest logistics graduates and theoretically-inclined minds, but experience in the industry is the most important skill when it comes to adapting to unexpected supply chain challenges. Knowing where to look and how to adjust is often a more critical skill than getting a great plan down on paper and expecting it to run without surprises.
Take some time to think about the quotes that inspire you. Can they also be turned into lessons in logistics?
Share your favorites with us in the comments or over on Facebook and Twitter!
3D printing holds a lot of promise and is heavily backed by investors, but only really came to wider media attention this year.
At the Consumer Electronics Show in January, pioneering companies like Makerbot and 3D Systems, Inc. showed off the vast potential for the technology.
The 3D Printing Impact on Supply Chain Management
What hasn’t been discussed quite as widely is just how 3D printing impacts the supply chain, not to mention the managers who must predict and adjust to such changes.
At first glance, 3D printing could easily be seen as a damaging development for existing warehouse and supply chain solutions.
The linear make, move, store and distribute model of the supply chain is clearly disrupted when the means of production can be purchased by anyone, for uses personal or professional. So doesn’t this technology bypass almost all of the traditional process?
The Current Limitations of 3D Printing
Not exactly. There are a number of limitations to consider before a game-changing technological breakthrough hits your supply chain. These include:
Early stage technology – For all the attention being paid to 3D printing, the products themselves are still limited and in the early adopter stage. The hallmarks of this stage are high cost and limited products, which prevent mass adoption. Realistically we have several years before this begins to change, so you have some time to ponder your company’s response!
Regulations – New technology is always (eventually) subject to new regulations that govern its use. Home manufacturing takes this to another level because of the ability to produce potentially dangerous items – guns, for example – and the uncertainty over operational safety. Even with 3D printers hitting the consumer market, lawmakers and industry watchdogs will be watching to ensure that safety standards are established and adhered to.
Liability – In a similar vein, companies will need to ensure that any part they play in a 3D manufacturing process, whether providing hardware or the software and blueprints required to use it, is subject to liability insurance. This will be another new field to explore and draw up policies, adding to the many hurdles before providers can enter the 3D printing market.
Quality – The types of product that can currently produced by 3D printers is wide but not so deep, meaning that everything from replacement parts to candy can be created, but not necessarily to the level of quality that consumers expect. The hype around the technology can easily overtake the reality of its current abilities, which again means more testing and transition time before runaway disruption occurs.
3D printed products: Intriguing but still early days (Photo credit: Creative Tools)
For the moment 3D printing is a promising technology with huge potential to disrupt the supply chain, but it will still take many years to realize that potential. The transition is likely to be far slower than the media portrays.
In short this means that supply chain managers should prepare for 3D printing, but not panic over it!
3D Printing and Supply Chain Integration
With those limitations acknowledged, it’s important to focus on the areas of the supply chain where 3D printing could have a more immediate impact.
A current favorite is towards low volume production, the scale of which tends to prohibit more extensive supply chain access by its very nature. A small crafts maker, for example, may not have access to a full warehouse assembly solution due to the size of its operation.
In this scenario, a smaller 3D printing solution will be worth the initial investment to produce small run volumes at a lower cost. The same company could employ the device to create basic packaging as well, making the limited “in-house supply chain” a reality. At higher volumes this same company will currently struggle to keep up with demand, however, at which point they would probably need to move to more traditional high-volume supply chain solutions.
Prototyping and R&D will also be less costly for many companies. The ability to produce small scale test versions will have similar cost advantages to the example above, even when applied to larger organizations before they spend more on larger scale production.
Extending that idea, 3D printing could also be used to bridge smaller production problems at first – tough to obtain products or on-demand requirements, for example – which could actually boost existing supply chain’s ability to react. Think in terms of replacement parts or value-added production items integrated into existing areas of the supply chain, where the need to special order can sometimes cause a bottleneck. In this scenario, traditional production methods benefit substantially from the increased efficiency that the technology affords.
For the near future, 3D printing’s impact on the supply chain is likely to be limited to these low volume and targeted operational ends. This will inevitably expand in the years to come, however, so supply chain managers must understand the changes and be ready to react.
In future pieces we’ll be looking at specific industries and how 3D printing will impact supply chain logistics in those fields. Keep up with these updates by connecting with us on Facebook, Google+, or Twitter.
Do data solutions make sense of your supply chain? (Photo credit: / // /)
Logistics professionals rely heavily on supply chain data, both in real-time and after the fact reporting. Supply chain data solutions can be tough to manage, however, particularly as the trend towards ‘Big Data‘ impacts our industry.
Improved data clearly benefits a sector that is hungry for information, yet the sheer volume of data makes measurable improvement a complex task for any business and its supply chain.
In many cases, businesses have found that the promise of Big Data has not proven itself to be the reality. Research by Wikibon recently found that 46% of organizations that have invested in Big Data solutions simply aren’t seeing the expected return on investment. At the extreme edge, a small segment of respondents even claimed their ventures into the field had been “total failures.”
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More Than ‘Big’: Defining Supply Chain Data
Defining Big Data itself is a good place to start before diving into your own supply chain data solutions, as the two can be quite separate considerations.
More often than not, the big data label applies to data sets too large or diverse to be processed by standard database platforms and analysis tools. This can easily lead to more confusion, especially if you don’t have a great head for analysis, as data solutions vary greatly subject to the size and scope of the operation to be measured.
An easier way to approach a review of how you manage your supply chain data, is to focus less on labels and more on the specific data challenges of your business and its supply chain.
Data, big or otherwise, is the foundation of effectively managing complex order fulfillment and shipping operations. Clients of Capacity LLC vary greatly in size, from small craft ecommerce sites to household-name retailers such as Macy’s and Target. The most unique aspect of our data solutions isn’t providing the biggest, feature-bloated data solutions, but in emphasizing client customization. We find that creating a comprehensive database of shipping details and rapidly, reliably deploying them for each new client/retailer relationship is the best approach to build efficient, effective supply chain data systems.
From this base of rapid EDI (electronic data interchange) implementation and customization, the challenge of data management shifts away from intangible terminology. The nuts and bolts of using your supply chain data is to deliver a detailed perspective on – and control over – the order fulfillment process. Offering this advantage puts logistics providers in a pivotal position to define data-driven business solutions for those we serve.
Zero In On Your Data Challenges
The crucial element of adjusting your data systems to define and improve distribution lies in understanding where exactly you need it to go to work.
As highlighted in this MDM article, perhaps the full extent of the Big Data movement is only fitting for global, techno-centric companies.
For logistics professionals, a more selective approach is needed. Rather than letting the tools define the work, we should look at the pain points along the supply chain itself and select those that need to be more deeply analyzed. From there, key data points can be identified, monitored, and drawn together to form a basis for better decision-making. In this sense, logistics on an individual business level benefits more from data niches than the somewhat overwhelming Big Data label.
Knowing where to look becomes the next skill and there is a great deal of potential for hiring in this area of expertise. Already the role of ‘Data Scientist’ is spreading into the language, propelled by such high-profile analysts as Nate Silver. Businesses seeking enterprise-wide levels of improvement through data will certainly need a team of these experts, but smaller firms may find that existing team members with a good head for numbers and analysis can do the job.
Whatever the size of your business, ensure that you have the right people crunching the numbers, and someone well versed in your industry requirements to check and put them information into context.
The Bottom Line
Specific areas of the logistics, warehouse management and order fulfillment processes will see clear benefits from time invested to improve supply chain data solutions. Digging out the right data and using it to define and solve existing challenges is the objective, rather than reporting vast amounts of information just because it’s there.
We already see major benefits for our clients in the technology we use to manage orders, particularly when customized to fit a previously identified supply chain need. Getting into the nuts and bolts of data is certainly tricky and comes back to having the right resources at your disposal and the right people to manage them.
Grasping the moving parts of a supply chain will stand managers in good stead to confidently decide where practices can be made more efficient. Big Data, however we choose to define it, clearly has a role to play in this analysis but should be used as a foundation for decisions, rather than driving them in its own right.
