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Lean Manufacturing Articles

WHY FOLLOW-UP?

 

Long lead times require updates on need dates and de­livery dates. Supply chain requires continuous synchro­nization. Requirements may change, due to forecast inaccuracy or due to MRP "nervousness" (mostly due to supply side changes: unpredictable yields or reassign­ment of resources). Not all changes have the same im­pact on the supply chain, so just the request for acceleration or deceleration of delivery schedules should be supplemented with identification of their criticality to the customer or the supply chain. Schedule synchro­nization will reduce inventories. It will enable optimized balance between the conflicting objectives of customer service level (on-time deliveries) and lean operation (in­creased inventory turns).

THE AUTO-FOLLOW-UP PROCESS

All supplier data is posted on the Web for suppliers to log on and review. Problems with missed delivery sched­ules can be highlighted, so suppliers can identify them easily and come up with a revised promised date (RPD). At the same time, the auto-follow-up tool should serve as a two-way communication tool. It should inform the supplier of the demand changes and their criticality, provide clear visibility of discrepancies, and ask the sup­pliers to respond again with a revised delivery schedule. The supply chain synchronizer is the missing function­ality in most e-commerce systems today!

 

There are several issues involved with effective fol­low-up. Clear problem identification, preferably by color coding, is a must. The system should be flexible and al­low the user to sort and prioritize their activity to match their data sources and their process. It must have an easy way for the supplier to split deliveries. For suppli­ers with a good ATP capability, the process of response and update of the follow-up data can be electronically interfaced and automated to a near real-time transac­tion. The system should also include controls to mea­sure suppliers' performance: separate between desirable and undesirable schedule changes, and measure supplier responsiveness to problem and corrective action re­quests. These measures can be linked the enterprise's supplier performance measurement system.

WHAT NEXT?

 

We have covered so far almost all the aspect of the pro­curement process. However, since all the procurement data is posted on the Web, we can take advantage of it to further use:

•   Order confirmation: The suppliers can use this func­tion for order confirmation, either actively or in a

passive mode by not disputing the data.

     Data integrity tool: Supplier can correct invalid dates
(missed deliveries), or comment on inaccurate data:
quantities, schedule, lost delivery, order closure, etc.

     Status: Since all the data is posted, it can be summa­
rized and presented as a meaningful status tool, per­
formance metrics, and score cards.

     Bar-coded shipper: The system can be expanded to
enable the supplier to create a customized shipping
document when deliveries are ready to ship. This will
avoid the need for special hardware and setup of com­
mon standard with suppliers' base, will enable effi­
cient receiving process by use of a barcode, as well as
adding additional timely data to the receiving per­
sonal like latest inspection instruction, routing, or
back-order information. This process can also be used
to enforce discipline in the supply chain by control
of the shipper generation capability only when the
buyer is ready to accept them. If the shipping trans­
action is initiated from the Auto-follow-up screen, it
can update the order status of the procurement sys­
tem before it is received on the buyer's dock.

FRONT-END WEB PAGE

Since we had already developed a Web screen to send PRs to our outsource service provider, and developed all the necessary arrangements for data validation and POs upload back to our system, it occurred to us that we do not have to limit the use of that capability to the outsource buyers only. We could use the same capabil­ity for our own buyers. The idea is to create a front-end Web page that will do the same functions and have simi­lar data elements to that of the outsource service, and make them available for our buyers. There are several benefits to the front-end Web-based buyers' screen:

      Creates additional tier architecture, buffers the user
interface screens from the application software.

      Helps in case of multi-systems organization.

      Enables cross-geographical support.

      Enables commodity expertise.

      Solves unfriendliness problems.

      Enables easier and flexible workflow.

      Makes consolidations/transitions invisible to users.

      Saves training costs.

A front-end Web screen is actually a way to bridge the gap between a non-Internet legacy procurement system and being e-commerce capable. It may serve as the buy­ers' portal for all e-commerce activities, with links to other functions, without changing the entire ERP system.

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 14


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