Shop Floor Control

One of the top reasons people buy HighJump systems is because HighJump applications are designed to easily adapt to the way you do business - not force you to twist your business processes to fit the software. The adaptability promise continues with HighJump's new business intelligence application - HighJump Performance Advantage.


In a nutshell, HighJump Performance Advantage allows supply chain customers to view summary-level operational data in the form of graphical dashboards, and then drill down to root cause in order to correct any problems. Over time, this ability can lead to significant process improvement in a warehouse/DC or manufacturing shop floor.

It's easy to create personalized dashboards to suit your own operation. And you can set up dashboards for every user persona in your operation. Ex: an outbound dashboard for your shipping manager, an inbound dashboard for your receiving manager, and a capacity and utilization dashboard for an exec or warehouse manager.

Pretty cool stuff, but also very practical usage for HighJump customers interested in supply chain improvement and a way to give access to business performance metrics - and a route to operational improvement - to all members of the team.

Check out sample dashboards here: www.highjump.com/performance_management

I recently visited one of HighJump’s manufacturing customers in Iowa. Their shop floor makes up several product lines, is very complex and spans over 900,000 square feet. They run our manufacturing execution system software (MES) to manage the shop floor and direct over 600 employees. While their throughput is down due to the macro-economic conditions, it was refreshing to see complex manufacturing alive in the United States.

 

Every time I read an article about manufacturing, the drum seems to get louder about manufacturing getting outsourced and its inevitable departure from the United States. A recent Business Week article postulates that we might have entered into a permanent ‘invented here, industrialized elsewhere’ environment.  While I do not necessarily disagree for industries that have already completely left the cost to bring them back will be too high; I think there are other factors to help mitigate the transfer of industries that still have manufacturing in the United States:

 

Regulations and Protectionist Policies

Increasing regulations and risk of protectionism will drive up the costs of manufacturing elsewhere. Contrary to the promises of the G-20 about commitments to free trade, we recently slapped a 25-35% duty on tires from China. As the economic recovery starts, if countries resort to more protectionist policies this will need to be factored into an outsourced manufacturing decision. In addition we see additional regulations around imports; 10+2 being the most notable regulation scheduled to go live early next year. While there could be long-term savings from automation, the data collection effort can be significant and difficult depending on the technology infrastructure of companies in the supply chain so the corresponding upfront cost is not insignificant.

 

Demand Variability

Many companies moved manufacturing to Asia because of the significant cost benefits. One of the common trade-offs was the long lead times to ship the product to the United States. For companies that have a hard time predicting future demand (I am guessing there are a few out there) this creates a situation of either losing out on sales or loading up more inventory at different points in the supply chain. The more working capital tied up in inventory; the less money there is for the rest of the business. I think you will see more companies move toward a ‘near-shore’ strategy where they move non-strategic manufacturing to lower cost countries that are closer to the target market. In the case of the United States, Mexico fits the bill. Our customer has done exactly that by opening up a manufacturing plant in Mexico for the lower-end product lines while keeping the strategic product lines in the Midwest.

 

Government Incentive

One factor that has been absent up to this point but that I would greatly applaud would be for the US government to perform a review of our manufacturing capabilities and determine which are of strategic importance from a national security and ability to innovate standpoint. Then provide the right incentives to keep/enhance our core competencies in these areas, it sure beats the short-term incentive to pay people to pick up a shovel to build a road.

 

Hopefully our customer is not the only company that can make the proper assessment of what is strategic and what is not when it comes to manufacturing capabilities.

I have been without a home personal computer for nearly a year now. After the hard drive failed in the family desktop for a second time in 6 months, I packed it up and moved it to the garage (a trip to the electronics recycling facility is coming soon). I have been delaying the purchase of a new computer because I don’t want the hassle of administering virus software and installing new applications.

Now, through my recent exposure to SaaS and cloud computing at work, I am starting to rethink my needs at home. Very soon HighJump will be announcing that of our newest route accounting platform, HighJump RouteCenter, will be delivered in a SaaS model. This model allows our customers to focus on what they do best – selling more beer, wine, spirits, and soft drinks – while we worry about maintaining hardware and network infrastructure. No longer will customers need to worry about data centers, electrical, cooling, system administration, patching, cabling, and other low-value but expensive IT infrastructure costs. Additionally, our customers get a “network effect” as they can leverage pre-defined integrations to major supplier organizations like Coca-Cola, Pepsi, Anheuser-Busch, and MillerCoors. We have projects underway to expand this approach across the product suite and even run on commercial cloud solutions. These are exciting developments! I am convinced this will change the way customers think about their IT going forward.

Now back to my home computing situation….I don’t really need a personal computer (or Mac). I need a window into the cloud that allows me to access photo collections on Flickr, my friends on Facebook, office applications from Google or Microsoft and email from Google. So it looks like a NetBook is the newest item on my shopping list!

ESP is all you need to get it right every time.  Now back on planet earth we need a slightly better approach. Most of our mobile sales (DSD) customers are after that magic pill that tells them exactly what to have on the truck and what everyone will sell.  The problem is that no one can really tell you how to calculate it. The good news is that it is easier to predict what your total volume of customers will buy vs. an individual customer. The law of averages works in your favor. In our adventures in selling direct store delivery solutions, everyone says they want to pre-populate their orders for their drivers and salespeople.  Sometimes we are talking about just putting in a shopping list of products that this customer normally buys and then adding the quantities later. Some people want to be a lot more scientific. Often the question of how to calculate the perfect order is met with a stunned silence.  What about the scientific approach?

 

Using some rudimentary calculations it is pretty easy to figure out the average amount of each product that is sold to a customer in an average week or day. We can also calculate the average variance from that average.  This gives you something called standard deviation.  In the normal course of business, the vast majority (usually 99%) will come within three standard deviations from that average. If you trying to do this for an individual customer you would be looking the behavior of that one guy; that is very hard to predict.  If you look at the number for all the customers on your route and break that into days of the week or even weeks of the month, then you have a pretty reliable number.  Using this number on a given day and adding three deviations worth of product should ensure that you never run out.  Because we don’t start from empty in most cases, it also ensures that we turn inventory over on the trucks. The perfect truck load gives you the ability minimize weight and ensure you serve the customer every time.  

 

Now take that same calculation and expand it for the entire company. This gives you a bigger population of data and therefore a more accurate number.  This number can be used to optimizer order quantities and drive manufacturing. All of this from a simple attempt to give your driver a list of products that are likely to be sold to save a little bit of typing.  I knew stats class would come in handy someday.

 

Maybe you are not like me, but when my car breaks down and I take it to a mechanic, I always wonder is he being truthful with me? Do we really need to flush the radiator? Is the part actually new? For me, I have found comfort if the repair shop is part of the Automotive Service Association (http://www.asashop.org/ ). 

 

You might be similarly concerned when starting your search for a reliable 3PL partner. While references, service match, and pricing are critically important below are a few organizations that could provide additional information:

• International Warehouse Logistics Association (http://www.iwla.com) – over 500 member companies, they also offer courses in logistics. A good place to find pro-active 3PL companies
• European Logistics Association (http://www.elalog.org/) – as implied by the name a European focused organization. A good starting point if you are looking for capabilities in central/eastern Europe.
• The International Federation of Warehousing and Logistics Associations (http://www.ifwla.com/) – a global organization that holds an annual convention in a different part of the world. Strive to exchange information and views that are relevant to 3PLs.
• The International Society of Logistics (http://www.sole.org/) – another international organization with presence in over 50 countries. They offer Logistician certification programs

Other organizations that are less 3PL focused which you may already be involved in are: Warehouse Education Research Council (WERC) and Council of Supply Chain Management Professionals (CSCMP). In addition there are frequently vertical specific organizations dedicated to logistics. 

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