PART TWO: Optimisation Squared
The Perfect Load: It Begins in the Warehouse
Providing warehouse and transportation planners with simultaneous visibility into orders, as well as network constraints, allows them to focus collaboratively on a concept called the perfect load. Though traditionally associated with transportation management, perfect load planning actually relies heavily on warehouse visibility and cross-functional optimisation.
What is the perfect load? It's the load that maximises routing by aggregating many different kinds of transportation demand including inbound, outbound and inter-facility movements of inventory. By stitching together these moves in an optimal way, perfect loads maximise transportation and warehouse efficiency, as well as financial results.
The perfect load also maximises the containerisation, or load building, of products; all the activities from building cartons and pallets to loading onto the container. Perfect load building maximises the available three-dimensional space across all these stages, matching customer orders to physical capacity in the most precise and profitable manner.
Perfect loads also take advantage of sophisticated order splitting and scheduling strategies to further reduce costs whenever possible. Traditionally, individual customer orders were considered inviolate and non-breakable, but today transportation planners are recognising that orders can often be strategically split to maximise utilisation of assets such as trucks or ocean containers. While customer delivery commitments are still paramount, perfect loads increasingly represent partial orders that are spread out over multiple assets in order to create new transportation and warehouse efficiencies.
Because perfect load building depends on managing constraints across the dynamic warehouse and transportation functions, it's essential that these two areas work together if companies are going to achieve the perfect load on a consistent, day-to-day basis.
While perfect route planning has to consider such nuances as cross-docking opportunities and the three-dimensional space available inside various containers, the entire customer delivery process also depends on products being ready at the loading dock when trucks arrive.
Unless real-time warehouse constraints are considered simultaneously with real-time transportation constraints, this process will not be fully optimised.
Iterative Planning: Creating Real-Time Agility
Bringing the warehouse and transportation functions together under one umbrella allow the introduction of a new concept that maximises moment-by-moment agility: iterative planning.
Every day, planners build the best-possible routes, pallets and containers from a transportation perspective. But they may not consider that these plans could result in warehouse inefficiencies. For example, by sending employees across the facility three times to pick different products.
While multiple trips across the warehouse aren't necessarily a recognised ‘constraint’ they can represent an enormous loss of productivity over the course of a year. Cross-functional plans need to recognise these operational inefficiencies and work around them.
That means transportation planners need to have real-time visibility into the warehouse configuration, so that workforce productivity is maximised. When orders are packed, transportation planners also need to ensure they have drivers, trailers and dock personnel ready to meet the loading schedule.
But, because conditions constantly change, these plans cannot be fixed. To truly optimise warehouse and transportation management, plans need to be reiterated and updated throughout the day. A dynamic, real-time view into warehouse load states, order changes and disruptions enables real-time responsiveness across both functions.
By operating with flexibility and honouring real-time constraints and inefficiencies as they become apparent, companies have the power to truly optimise asset productivity, workforce efficiency and financial results across both their warehouse and transportation networks. This is the ultimate combination of agility and cost control that companies are seeking today.
Technology: The Great Enabler
Clearly, companies can achieve enormous benefits from tightly integrating their warehouse plans and transportation plans. But how can they achieve this ideal state?
The answer is improved supply chain planning solutions that enable real-time information sharing and strategic process coordination, across both functions.
Technological tools can provide the critical linkages among warehouse and transportation capabilities, enabling cross-functional managers to view the same real-time information about demand, constraints, resource availability, service targets and performance metrics.
Instead of acting as mutually exclusive functions, the warehouse and transportation network can be knit together via advanced software to create a new level of interactivity, interoperability, integration and collaboration.
Technology also supports the repetitive, iterative planning capabilities that are needed to integrate these functions in real time. Whether there is an emerging opportunity like a new customer order, or a challenge such as an inventory shortage, software solutions can alert both functions — and automatically suggest a revised course of action that optimises assets in light of this change.
Advanced solutions are already being developed to support this new level of visibility, collaboration and agility.
Instead of managing transportation and warehouse operations separately, tomorrow's supply chain software will transform both functions into a single engine and shared dashboard, focused on continuous planning and execution that spans both capabilities and provides a net-new view of logistics.
As conditions change, next-generation software tools, along with process and organisational realignment, will position this new logistics network to adapt in real time, creating an incredibly powerful environment of continuous improvement and ongoing agility. Whatever your industry or business model, that's bound to create a significant competitive advantage.
Biden establishes Supply Chain Disruptions Task Force
The US government is to establish a new body with the express purpose of addressing imbalances and other supply chain concerns highlighted in a review of the sector, ordered by President Joe Biden shortly after his inauguration.
The Supply Chain Disruptions Task Force will “focus on areas where a mismatch between supply and demand has been evident,” the White House said. The division will be headed up by the Secretaries of Commerce, Transportation, and Agriculture, and will focus on housing construction, transportation, agriculture and food, and semiconductors - a drastic shortage of which has hit some of the US economy’s biggest industries in consumer technology and vehicle manufacturing.
“The Task Force will bring the full capacity of the federal government to address near-term supply/demand mismatches. It will convene stakeholders to diagnose problems and surface solutions - large and small, public or private - that could help alleviate bottlenecks and supply constraints,” the White House said.
In late February, President Biden ordered a 100 day review of the supply chain across the key areas of medicine, raw materials and agriculture, the findings of which were released this week. While the COVID-19 health crisis had a deleterious effect on the nation’s supply chain, the published assessment of findings says the root cause runs much deeper. The review concludes that “decades of underinvestment”, alongside public policy choices that favour quarterly results and short-term solutions, have left the system “fragile”.
In response, the administration aims to address four key issues head on, strengthening its position in health and medicine, sustainable and alternative energy, critical mineral mining and processing, and computer chips.
Support domestic production of critical medicines
- A syndicate of public and private entities will jointly work towards manufacturing and onshoring of essential medical suppliers, beginning with a list of 50-100 “critical drugs” defined by the Food and Drug Administration.
- The consortium will be led by the Department of Health and Human Services, which will commit an initial $60m towards the development of a “novel platform technologies to increase domestic manufacturing capacity for API”.
- The aim is to increase domestic production and reduce the reliance upon global supply chains, particularly with regards to medications in short supply.
Secure an end-to-end domestic supply chain for advanced batteries
- The Department of Energy will publish a ‘National Blueprint for Lithium Batteries’, beginning a 10 year plan to "develop a domestic lithium battery supply chain that combats the climate crisis by creating good-paying clean energy jobs across America”.
- The effort will leverage billions in funding “to finance key strategic areas of development and fill deficits in the domestic supply chain capacity”.
Invest in sustainable domestic and international production and processing of critical minerals
- An interdepartmental group will be established by the Department of Interior to identify sites where critical minerals can be produced and processed within US borders. It will collaborate with businesses, states, tribal nations and stockholders to “expand sustainable, responsible critical minerals production and processing in the United States”.
- The group will also identify where regulations may need to be updated to ensure new mining and processing “meets strong standards”.
Partner with industry, allies, and partners to address semiconductor shortages
- The Department of Commerce will increase its partnership with industry to support further investment in R&D and production of semiconductor chips. The White House says its aim will be to “facilitate information flow between semiconductor producers and suppliers and end-users”, improving transparency and data sharing.
- Enhanced relationships with foreign allies, including Japan and South Korea will also be strengthened with the express proposed of increasing chip output, promoting further investment in the sector and “to promote fair semiconductor chip allocations”.