As much as 80% of the operating savings you can squeeze out of your supply chain are from changes to infrastructure. Investment decisions in infrastructure assets – buildings, equipment and IT – are the most important decisions you can make to influence the performance outcomes of your supply chains.
We help clients build and run their supply chains according to these five steps.
Crystal-Clear Picture of the Current State
We begin every mandate by building a crystal-clear picture of your current state of operations. This means:
- A physical and financial accounting of every asset involved
- Document the business rules, processes and product flows
- Analyze human resources used to complete supply chain activities
- Collect and analyze of operating data
- Understand the business objectives the supply chain serves
- Understand the projections for growth in the coming years
Buying new equipment, installing new software or moving to a new facility has every chance of failing to meet the larger business objectives without a full and accurate understanding of the current situation.
It is almost every case we will identify immediate, easy improvements to your operations from this exercise. You will gain business-improving insights that impact areas of your business that might seem only tangentially related at the outset of this exercise.
Data-Driven Evaluation of Performance
Our evaluation of supply chain performance relies on operating data from your company and complete characterization of the infrastructure involved. This makes performance evaluation data-driven and devoid of the emotional and subjective judgments that can often cloud your perception of current performance. We use LIDD’s proprietary Logistics Planning Software to develop optimal quantitative solutions that balance competing operational and financial goals, all subject to numerous variables and constraints.
We evaluate your supply chain infrastructure’s performance on three things:
- Operating Efficiency
- What labor productivity and operating expenses does your supply chain incur?
- How do those outcomes compare with similar companies?
- What deficiencies can be eliminated without renovating the infrastructure?
- What is the inventory accuracy and cost of adjustments?
- Asset Utilization
- What storage, throughput and pick line capacity do your facilities and materials handling systems supply? What is their utilization?
- What system functionality is deployed from your existing IT application park?
- What is your shipping accuracy? What do errors cost and where do they come from?
- What is the timeliness and quality of orders shipped?
- What are the stock outs?
It is important for you to understand how your growth affects this performance. Ultimately, growth means a deterioration in supply chain performance unless you deploy adequate capital.
Before you commit to spending capital on buildings, equipment and/or software, we will position you for successful implementation once you make the decisions. This means our solutions are:
- In the service of a your business objectives
- Realistic in terms of time and continuity of operations
- Justified financially based on accurate capital budgeting and realistic operating cost projections
- Demonstrably superior to competing, realistic alternatives
- Implementation ready-drawings to re-set existing space, find or build new space
- Equipment specifications and supplier lists for transportation, processing or materials handling equipment
- Data files to upload into existing systems to reflect infrastructure changes
Management & Support through Implementation
We will support you through all stages of implementation. This can be as subject matter experts, owners’ representatives or complete project management. Our goal is a successful implementation where we achieve or surpass your expectations on time and within budget.
The role we play in meeting that goal depends on the availability and experience of your team. Some clients can’t let key executives devote half their time away from ongoing operations. Other clients don’t have the experience to run such large projects independently. Most value having seasoned hands keeping a project on track and in focus.
Throughout implementation, small decisions can add up to budget-busting outcomes or long-term operating defects; either of which can become so problematic that they all but wipe out the original benefits. Our experience ensures you avoid these mistakes.
On-Going Monitoring & Planning
You might only replace a building every 25 years or a software application every 8 to 10 years. Big decisions don’t happen all that often. But every year, your infrastructure assets need upgrading, maintenance, adaptations and additions. Keeping a world-class infrastructure means ensuring these decisions maintain the cohesion of the infrastructure and serve the interests of the business.
Our data-driven performance evaluation is an on-going monitoring tool at your disposal. We provide monitoring based on routine submissions of operating data that can make recommendations on swapping products along a pick line or re-balancing a network of distribution centers.