Using Operational Levers To Boost Supply Chain Performance
To remain competitive in today's environment, manufacturing companies are looking at boosting their supply chain performance. One of the key levers for improving supply chain is 'cost reduction' at various stages of the entire chain.
One such stage is the manufacturing plant which, it can be said is the center of the supply chain. Optimal handling of plant operations can have a hugely positive impact on the upstream and downstream supply chain. Some of the plant level strategies that can help manufacturers improve the performance of their supply chain are -
- Cycle Time Reduction: Organizations must optimize the various manufacturing operations (e.g., reduction in queue times at work center) to reduce cycle time. This leads to increase in throughput and lower inventory cost. Reduction in cycle time leads to improved time-to-market, thereby helping organizations to react to market changes quickly
- Small Batch Size: This strategy can be useful to plants that produce a high product-mix. For such manufacturers, batch size reduction reduces the inventory cost. In order for small batch sizes to work, the changeovers must be quick
- Reducing Downtime: Unplanned downtime is a 'waste' and plant staff should minimize downtime.
The above strategies, if adopted will lead to reduced inventory in the entire supply chain.
ERP systems along with Manufacturing Execution System (MES) help organizations track performance of a production line, the overall plant level performance and also the performance on various customer and supplier related parameters. The extensive data that get captured in the ERP and MES systems, can be used to implement an improvement plan to achieve manufacturing excellence