JUST-IN-TIME PERFORMANCE AND ITS EFFECT ON THE CLIENT RELATIONSHIP

Transcription

1 JUST-IN-TIME PERFORMANCE AND ITS EFFECT ON THE CLIENT RELATIONSHIP Cold Chain & Warehousing Summit th July 2016, Bitec Bangna Speaker: Mr. Kevin Burrell Chief Executive Officer DHL Supply Chain Thailand, Philippines, and Vietnam 1 Just-in-time Warehousing Warehousing Summit 2016

2 AGENDA 01 What s Just-In-Time concept? 02 Supply Chain benefits of Just-In-Time On time performance challenges Its effect on client relationship 05 Suggestion 2 Just-in-time Warehousing Warehousing Summit 2016

3 WHAT S JUST-IN-TIME (JIT) CONCEPT Doing only what is necessary when it is necessary and in with the amount that is necessary Neither before, which would provoke an accumulation of inventory and unnecessary cost, nor after, which would mean a delay in serving customers and the corresponding increase in their dissatisfaction. 3 Just-in-time JUST-IN-TIME Warehousing performance Warehousing and its effect Summit on the client 2016 relationship

4 AUTOMOTIVE SUPPLIER TWO TYPICAL SUPPLY CHAIN MODELS COLD CHAIN RETAIL SUPPLIER 4 Just-in-time Warehousing Warehousing Summit 2016

5 Optimize the Information & material flows from supply to demand. Insurance of issuing accuracy and receiving through consolidation centers through technology utilization Ensure quality consistency and process verification through the supply chain OPTIMISATION OF JIT PRINCIPLES BY Consideration of transport media and planning to optimize efficient transport operations Minimize processing steps as efficiently as possibly, on a holistic basis across the 5 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016 supply chain

6 Supply Chain Benefits of Just-in-Time 6 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

7 HOW CAN JIT OPTIMIZE WAREHOUSING? Minimized inventory carrying cost To keep stock levels as low as possible but at the same time providing the desired level of stock available to serve customers demand. That will lead firms to significant reduction in inventory carrying costs 7 Just-in-time Warehousing Warehousing Summit 2016

8 Handle Supply Chains Effectively JIT can bring you reduction of errors and complaints and if designed effectively can lead to higher productivity derived from reduced processing steps and picking route distances. 8 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

9 Reduce Unnecessary Wastage Stocking inventory by nature assumes it matches demand, based on forecasts. We all know forecasts are the one thing sure to be wrong. Hence there will always be wasted materials. Working JIT therefore ensures minimised wasted materials and therefore cost. 9 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

10 Seamless Customer Service If the flow of goods and services through JIT is well managed, the quality of customer service will increase significantly. Customer service is related to the output of logistics systems and it plays very important role in creating, developing and maintaining customer loyalty and satisfaction. 10 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

11 11 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016 On-time Performance Challenges

12 DEMAND DEMAND All supply chains, are at the mercy of the Human Factor and human approaches by nature are chaotic and irrational, and almost impossible to predict. There is no environment that works truly Just in Time, it is all about minimising buffer inventory levels between trading partners to manage efficiency. Practical suggestions Investments have been made in connecting business through EDI technologies providing forecasts, and actual demand. Insufficient time is placed by companies, understanding supply flexibility, and harmonising supply chains partners to react to changes in demand. 12 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

13 PERFECT SUPPLY Just in time means that the success of this business strategy depends largely on precise coordination between businesses and their suppliers to ensure prompt delivery. Focusing on right time right quantity and right quality. 13 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

14 PERFECT SUPPLY Practical suggestions QUANTITY It s all about resources, being an effective business, means you need build resource flexibility to meet required demand, or align yourself with partners that can build flexibility. QUALITY It s all about process consistency, in every component of the supply chain not just in manufacturing. TIME It s all about planning, coordinating efficient resources to ensure perfect supply requires analytics and capable management 14 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016 There is never perfect supply, its about management of resources, to minimise the impacts to customers demands

15 RISK RISK Companies using JIT intend to walk a fine line between having too much and too little inventory. Statement Practical suggestions Companies need to stop auditing BCP arrangements of companies, and start to understand joint contingencies, and early alert systems, for minor deficiencies, that have greater impacts to service levels. 15 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016

16 ORDER QUANTITY JIT and more frequent supply, can lead to inefficiency in manufacturing and logistics processes. Capitalistic intent s provides tensions in creating supply chain efficiencies. Practical suggestions Supply Chain collaborations, committees and forums exist, these provide loose frameworks, to gain supply chain alignment. Bolder actions needed to be undertaken, with clear buy-in and real agreement. Companies need to build supplier partnerships with missions to optimise supply chains, to mutual benefit. 16 Just-in-time Presentation Warehousing title Location Warehousing xx month 20xx Summit 2016 The way forward is companies taking ownership of delivering supply efficiencies not to the detrement of other supply chain partners. There needs to be a clear supply chain alignment to mutual beneficiaries.

17 ITS EFFECT ON THE CLIENT RELATIONSHIP Just in Time adjusts delivery to demand, making possible the fulfillment of custom orders without any extra effort or extra time, leading to increased customer satisfaction 17 Just-in-time JUST-IN-TIME Warehousing performance Warehousing and its effect Summit on the client 2016 relationship

18 SUGGESTION INBOUND SUPPLY CHAIN for better JIT implementation In Automotive manufacturing, there are strong managed Inbound Supply Chain with key focus on quality inspection and remedial actions. In Thailand no one has yet truly managed the Inbound Supply Chains end to end for cold chain goods which rely heavily on suppliers, quality of trucks, and condition of the product delivered. The future is in managing holistically the cold chain inbound supply chains. 18 Just-in-time JUST-IN-TIME Warehousing performance Warehousing and its effect Summit on the client 2016 relationship

19 THANK YOU 19 Just-in-time Warehousing Warehousing Summit 2016