High Tech Approach to Solve Complex Projects in Supply Chain
BLG Logistics has received the German and European Award for Logistics this year, entitled “Stargate junction—logistics at the interface between humans and robots”. When I look at that project it reflects perfectly what I see as the unique challenge for an IT Innovation project in the supply chain: A) You need to keep it simple. B) You need to keep it expandable and flexible. C) You need to keep it affordable. Point A is our mantra. Logistics is a science; there is no doubt about that (as one of my customers mentioned to me just the other day, being rather surprised by that fact). But it is also about common sense. Your weakest link in the supply chain will determine the strength as a whole. So you want to make sure to identify early the potential weakest point, check possibilities to overcome that weak point and implement the simplest solution of your options. Because that means that you will also be able to react very quickly if something in your parameters changes, see B) Supply chains change all the time and ever faster than before. With digitization influencing customer behavior and therefore ultimately every B2B relationship the order cycle time decreases and changes become a more permanent fixture in your SC than ever before. Therefore your IT and hardware solution needs to be flexible and expandable. But keep it simple C) it is imperative that the solution is affordable in the best of senses. With more and more options to choose from and sources changing from China to Mexico or vice versa in a heartbeat you need to make sure that you have an affordable solution on hand that has an Return on Investment preferably of less than 2 years.
We have established a number of low tech solutions that improve the processes and have an incredible big effect on our balance sheet
So in my opinion when you look for an innovative solution you should always look at 3 scenarios: 1) what happens if I don’t change anything in my processes. 2) what is a small investment solution 3) what is my maximum investment solution. If you look at those options you might find that there is a middle way between scenario 2 and 3 and that often depends on what your assumption is how long this business will run in the way that you design that new process. In my experience there is often a low cost, low tech approach that will work perfectly and will be fulfilling all of my A to C mantras. But in other cases there is a beautiful high tech approach that will still be simple to manage, reacts flexible to change and is affordable within the parameters of the project.
On the other hand, it is astonishing for instance how high tech the world gets and how advanced some of the Warehouse Management Systems (WMS) are being developed: you still end up with exporting data in spreadsheets, doing pivot tables and trying to interpret the data that you just extracted. Can this really be true? X number of Transfer Orders in Y amount of time? Did I take the right timeframe for my analysis? Did I catch all transactions? That’s where your experience has to kick in and the science of logistics begins. But that science needs to be in your head, in your brain, you need the right education to interpret the data to even start an innovation or your project is doomed from the start. We have established a number of low tech solutions that improve the processes and have an incredible big effect on our balance sheet. A lot of those are a matter of interpreting your data correctly, and then write a simple code in a spreadsheet and work with it diligently on a daily basis. That might also have an impact on your organization, you might have to create a different department that will work with these solutions and that in turn means you will have to deal with change management. That should not be taken lightly but it is rather important detail that is often overlooked in introducing new IT solutions. If the people working with the solution will not support it, then your solution is doomed. Get everyone involved from the start, Managers and Team Members alike and make them part of the project. Keep them updated on what you want to achieve and what you have already achieved. Get their input and feedback, a lot of times that will give you insight not only on this project but ideas for other improvements.
On the other end of the scale for example is a rather high tech IT solution: slotting software, a must-have in my opinion with nearly every WMS that you are running. The amount of transactions needed to optimize your slotting and therefore your routing, staging and picking processes are far exceeding any spreadsheet solution. There are very good IT systems out there that are easy to combine with your WMS and will have a return on investment of less than 6 to 12 months easily. And therefore they fulfill my A to C parameters perfectly.