Quelle: CIO, Kanada
When Amazon.ca needed to speed the newest Harry Potter book to thousands of eagerly awaiting Canadian "muggles" (folks without magical powers), it used a little magic of its own - supply chain magic, that is.
Deliveries of tens of thousands of copies of 'Harry Potter and the Order of the Phoenix' were made in some 40 cities across the country, including 21 major urban centres, using more than 40 ground transportation routes and a dozen scheduled flights. The feat called for the systematic application of best practices to one of the biggest logistics challenges of the year.
"To excel at logistics, everything you do has to be geared toward speed, flexibility and efficiency," says Ann Nelson, CIO of Progistix Solutions Inc, the logistics services company whose subsidiary, Assured Logistics Inc, helped Amazon.ca pull the logistics rabbit out of the hat. "It's not just a question of having clean, clear processes or using world-class technology; you also need to have visibility to the right information and put strong, comprehensive metrics in place. When you measure and monitor proactively, you can catch and fix problems quickly before they impact supply chain performance."
Leveraging an infrastructure that includes integrated processes across the end-to-end order and inventory management cycle, Nelson's firm can fulfill and deliver orders within 30 minutes in selected urban centres, helping drive costs off the customer's balance sheet and income statement. Most achieve inventory savings in the order of 20per cent, at least on average.
Managing supply chain complexity
Third-party logistics providers don't have to get logistics right just once, for one particular company's specific supply chain; they have to do it day in and day out for a number of very different businesses, small and large.
One of the trickiest parts of the business is seamlessly integrating the new processes across the client and the provider's systems. In the case of Progistix, the largest Canadian-owned, third-party logistics service company in Canada, customers are from the technology and telecom world, and supply chains in these types of industries are notoriously complex; some companies have dozens of interfaces to address. Naturally, that presents a considerable challenge for the CIO and the IT department.
"More interfaces can add up to more potential points of failure," Nelson observes. "We've developed reusable templates and repeatable processes that make the transition faster, smoother and more reliable."
Speed to market is also a very real challenge. Companies like Xerox, Bell Canada, Entourage and Canon, for example, must make sure their large pool of on-site service technicians have the parts they need to do the job. A long wait time flattens field productivity and sends costs skyrocketing.
Yet, with thousands of items in inventory, it's not feasible for technicians to carry every part they might possibly need with them. Sooner or later there's bound to be a gap. You have to count on the sheer efficiency of your logistics processes to fill it fast.
Nelson and her IT team in collaboration with operations and engineering have optimized internal systems and workflow to do exactly that. Everything is tracked to meet specific performance targets from the moment a call comes in to the dispatch centre, to the time parts are picked and packed in the supply depot and loaded onto a waiting courier truck. Orders are in the hands of Xerox technicians at a customer site, for example, in as little as 30-minutes in selected urban centres. Bell Canada service technicians can order parts as late as 6 p.m. in some locations and receive the parts by 6 a.m. the next business day.
"On time fulfillment is the cornerstone of what we do," says Nelson. "But it's not always that simple to execute. When it comes to logistics, you always have to balance quality of service or speed with cost."
In Nelson's view, winning at logistics comes down to three essentials:
1. Having an agile and efficient organization, with easy-to-adapt processes.
2. Working closely and collaboratively with customers to identify opportunities for greater efficiencies.
3. Hiring people with deep but diverse skills, so they can step in when and where they're needed.
"Flexibility is critical," she adds, "especially when it comes to managing your resources. As a service provider, you can't always schedule projects to fit your own internal timetable. We have three new customer solutions going live this fall, for example, and we often have to be ready to ramp up on fairly short notice."
The ultimate logistics challenge
Imagine the complexity of a supply chain that today supports more than25 million customer connections across Canada, bringing together traditional telephone service with wireless service, high-speed Internet capabilities and satellite television. Of course we're talking about Bell Canada one tough testing ground for the third-party logistics approach.
Behind the scenes, Bell Canada draws on a wide variety of inventory parts , including more than 50,000 product and service items. Then there are the multitude of business partners/suppliers and more than40,000 employees who team up to make a complex business run like clockwork.
Fact is, Bell Canada actually doesn't have just one supply chain; it runs four very different supply channels today, each with its own distinct customer requirements, fulfillment processes and systems. Network orders, for example, are highly configured. Service provisioning, on the other hand, typically calls for standard product offerings. Bell also runs a retail business with its own distinct product set. Finally, to support its service and repair activities, the company maintains a spare parts operation with inventory distributed across work centers for speedy delivery to the field.
Back in 1995, many companies with complex supply chains like Bell Canada's had not yet started to integrate their systems. Nick Addante, now Bell Canada's Senior Director, Supply Chain, worked on the logistics team in the warehousing systems area at the time. He recalls there were dozens of "one-off" applications in place to support Bell Canada's unique inventory assets.
New parts were tracked in a different system than the one for refurbished parts, for example; telephone sets were tracked in a different system than cable, which had to be counted down to the exact number of meters on each roll. More important, the company didn't have the integrated, end-to-end view it needed to optimize its operations.
"When you have multiple systems tracking narrow views of inventory across different businesses, you can lose sight of what's happening," says Addante. "With Progistix's assistance, we were able to bring all that together by leveraging an integrated, end-to-end SAP solution. By having it all visible, you can get into discussions on 'How can I optimize inventories across my distribution network? How can I better plan, so I can improve my pricing?"
Seeing the results
It sounds good in theory, but has it paid off in measurable results? The answer for Bell Canada is a resounding 'yes'. The company has achieved a number of important gains to date, including:
1. Reducing inventory costs
Through improved visibility, Bell has optimized and reduced inventory, taking millions of dollars off the bottom line.
"Every time you create a slightly different product, you have to put that information in the system and maintain it," says Addante. "You have to maintain all the related pricing information, contract information and forecasting capabilities. And it's easy for people to confuse products and order the wrong one. We've now streamlined our inventory, simplified the whole order process and taken costs out of our operations."
In addition, Bell was able to start up a vendor-managed inventory program with strategic suppliers in the late 1990s. These vendors stock and manage product in Bell-Progistix warehouses, yet carry the inventory on their own balance sheets. Their internal order fulfillment systems are linked via EDI interfaces to the SAP systems. This added transparency and collaboration has helped reduce Bell inventory holdings further, while ensuring fast turnaround of product to Bell customers.
2. Doing more with less and doing it faster.
Impressive gains have been made in distribution cycle time, while Bell Canada has actually consolidated its facilities. The company previously operated several material distribution centers to ensure parts could be shipped quickly to the field. Today, orders are fulfilled through just a handful of centres yet order fulfillment time has actually improved, not declined.
3. Improving information delivery.
With all of its core order and inventory management operations running on a single, integrated platform, product is not the only thing that moves faster at Bell Canada; information does, too. For example, Bell has been able to replace a cumbersome printed material order guide with an e-catalogue and mobile e-procurement solution.
In its prior life as a paper document, the guide used to be reprinted twice yearly, with update sheets circulated in between. In the fast-changing world of the telecom industry, that meant product information could be out of date almost as soon as it was published. And, photos were usually not included, due to the high cost of publication and distribution.
Now, through a mySAP Mobile Business solution, Bell's 4,000 field technicians can search product information online or offline to check availability, place orders and confirm delivery dates. Not only is it more convenient and easy to use, it also provides more timely and accurate product information, plus workflow tools. A new release is available every week to 10 days. And low production costs make it possible to include detailed photographs, making it easier for users to select the right product for their needs.
No magic bullet
According to Jim Eckler, President and CEO of Progistix, the old saying that 'you can't manage what you can't see' definitely holds true when it comes to logistics. "It takes end-to-end visibility across the supply chain to increase flexibility, improve responsiveness and reduce inventory."
"In its simplest terms, supply chain is about managing product," agrees Addante. "But it's also about managing information. You have to optimize both of those flows."
All the same, logistics is one area where its best to proceed with caution. As Nelson warns, "You have to plan where you invest your logistics dollars if you want to get the payback. But if the value is there, it can really contribute to bottom-line performance."