The IOMA Handbook of Logistics and Inventory Management ( etc.)

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Here is a summary of the key points from The IOMA Handbook of Logistics and Inventory Management:

• The handbook is published by IOMA (Institute of Management and Administration) and covers topics related to logistics management and inventory management.

• Part 1 focuses on logistics management. It includes chapters on topics like benchmarking logistics performance, distribution, international logistics, controlling logistics costs, logistics management and strategy, and software/technology.

• Part 2 focuses on inventory management. The first chapter provides insights into inventory reduction strategies from industry professionals.

• Within each section, there are numerous individual articles covering best practices, case studies, surveys, and new tools/technologies related to logistics and inventory management.

• Common themes include benchmarking metrics, distribution network optimization, international trade, cost reduction strategies, developing logistics strategy, warehouse management, technology/software solutions, and reducing inventory levels.

• The handbook aims to provide practical guidance and insights for logistics and supply chain professionals based on real-world examples and research from leading organizations.

Here is a summary of the contents:

This article discusses various strategies and case studies for reducing finished goods inventory through better inventory management and supply chain practices. It covers topics like inventory profile analysis, flow-through inventory, bartering excess inventory, donating excess inventory, automatic replenishment programs, safety stock reduction, periodic inventory reviews, cycle counting, technology/software, vendor managed inventory programs, supplier consolidation, supplier partnerships, and more.

It includes case studies of specific companies that successfully reduced inventory levels, such as Case Corporation, Hennessy, ITT Automotive, IBM, Vermeer Manufacturing, and others. It also shares surveys of inventory and supply chain managers on best practices they use, such as reducing the supplier base, expanding cycle counting, measuring supplier performance, benchmarking inventory turns, and more.

In summary, it provides practical strategies, real-world examples, and industry insights for how manufacturers and retailers can better manage inventory levels and collaborate with suppliers in the supply chain to reduce excess finished goods inventory. Both qualitative and quantitative approaches are discussed.

Here is a summary of the key points about benchmarking logistics performance from the provided article:

• Benchmarking is measuring logistics performance metrics against other companies to identify best practices and opportunities for improvement. While many companies measure logistics metrics, fewer are using benchmarking successfully to control costs.

• Important criteria for effective performance measures include validity, usefulness, integration across functions, compatibility with costs of measurement, and level of detail provided. Measures should also minimize incentives for counterproductive behavior.

• Top management commitment to benchmarking is critical for success. Companies discussed linking logistics metrics to financial reporting, including in staff meetings, and tying them to management compensation. Resources must also be budgeted for measurement.

• Performance measures should reflect company strategy and priorities like customer service, cost, working capital, and cycle time. Measures need to be globally consistent, interlinked to avoid suboptimization, and communicated throughout the organization.

• Common areas companies benchmark include inventory accuracy, inbound and outbound shipment accuracy and timeliness. Benchmarking has led to reductions in service complaints and customer service staffing needs at some companies. Benchmark results may be lower initially as new technologies are implemented.

• The study compares logistics performance of 116 small and large companies across various metrics like modal usage, shipment patterns, and transportation management.

• Small and large firms differ significantly in their usage of truckload (TL) motor carriage for outbound shipments. Nearly 50% of large firms’ volume moves by TL carriers vs only 20% for small firms.

• Patterns of modal usage also differ for inbound shipments, with large firms ranking railroad and rail-truck intermodal higher. However, both size firms rank TL and parcel express land as top two modes.

• Small businesses have equal inbound shipment origins within their home state vs other US states. Large firms sources 65% from other US states vs 25% from home state.

• Outbound shipment destinations also differ, with small firms sending 49% within home state vs 41% to other US states. Large firms send 65% to other states vs 25% within home state.

• Despite differences, both sizes of firms prioritize transportation management issues like modal usage, shipment patterns, and rank motor carrier services as most important.

• The report discusses logistics metrics and measurement programs at over 350 companies. It finds that while most measure some internal logistics activities, few measure performance externally where it matters most - customers and suppliers.

• The best logistics metrics have an external focus on end-to-end supply chain processes rather than individual logistics functions.

• Lessons from successful measurement programs emphasize ensuring metrics are aligned with business strategy, truly understanding changing customer needs, knowing costs to providers, and measuring performance across the entire supply chain from suppliers to customers.

• Examples are given of companies like 3M, International Paper, and Motorola that have effective logistics measurement capturing the business value of logistics across the supply chain.

• The research is captured in the Council of Logistics Management publication “Keeping Score: Measuring the Business Value of Logistics in the Supply Chain”, which provides concepts and methods for developing improved external metrics.

• Logistics managers are increasingly using benchmarking as a cost-cutting strategy and performance improvement tool. Benchmarking helps firms establish best practices, enhance management controls, and reduce costs.

• The top motivations for benchmarking cited in surveys are improving overall product/service quality, establishing management control processes, and reducing costs per management requirements. Customer requirements are a less common benchmarking driver.

• Benchmarking’s primary benefits reported by firms are improved standard warehouse operating procedures, better management controls, and reduced warehousing costs. It can also improve customer service, facility utilization, and material handling efficiencies.

• Internal benchmarking (comparing different operations within a firm) is the most popular benchmarking technique. Comparing to similar functions in the same industry or an industry leader is also common. Cross-industry benchmarking is less frequently used.

• Larger firms and those in automotive/pharma industries are more likely to benchmark than small or chemical industry firms. Internal benchmarking is also more common among large versus small companies.

The remaining 8.9% indicated a specific competitor-to-competitor comparison by product or function.

This summarizes that out of the survey responses, 8.9% of respondents indicated that they benchmarked their company’s performance directly against specific competitors, comparing products or functions between the companies. The majority of responses involved general performance indicator comparisons rather than direct competitor comparisons.

Here are the summaries:

• Predictable conforming product: Refers to manufacturers achieving a high percentage of products that conform to specifications without defects or need for rework.

• Manufacturing cycle time: The time it takes to manufacture a product from start to finish.

• Conformance to product specification: The percentage of products manufactured that meet pre-defined technical and quality specifications.

• Percentage of schedule changes: The frequency at which production schedules are changed from the original plan, which can disrupt manufacturing efficiency.

• Schedule adherence: The ability of the manufacturing process to follow the production schedule as planned.

• Actual production to plan: The degree to which actual manufacturing output matches the production plan.

• Conforming product released for shipment: The percentage of manufactured products that meet quality standards and can be released to customers.

• Balanced inventory and production costs: Efficiently managing inventory levels and production volumes to minimize total costs of holding inventory and running production lines.

• In 1999, the cost of the U.S. business logistics system was $921 billion, or 9.9% of nominal GDP. This was the same percentage as in 1993.

• Transportation costs, mainly trucking, made up the largest share at around 6% of GDP. Inventory carrying costs were around 3.6% of GDP.

• Inventories increased 4.6% in 1999 while sales increased 9.2%, indicating stock building in the fourth quarter by wholesalers. Overall inventory levels relative to GDP have declined since the early 1990s.

• Demand for warehousing services is expected to continue growing due to steady inventory investment and warehousing providing more value-added services like e-commerce fulfillment.

• GM and Whirlpool emphasize using meaningful performance metrics that capture important elements like cost, quality, speed and reflect their overall supply chain strategies. Timely data is important and measures need to support strategic, tactical or operational needs.

• Ted Farris of the University of North Texas recommends criteria for evaluating effective measures, including validity, coverage, comparability, completeness, usefulness, compatibility, and cost-effectiveness. He advises focusing on a limited set of high-impact measures rather than overmeasuring.

• Whirlpool and others note that financial metrics may conflict with logistics metrics in the short-run, making improvements difficult without obvious financial benefits. Accounting systems also sometimes prevent adoption of logistics concepts.

• Build a framework to evaluate performance metrics first before implementing them to ensure they are measuring the right things and guiding useful actions. Non-financial metrics can provide insights not visible through standard financial reports.

Here is a summary of key points about optimizing an existing control station for GPS tracking:

• Splitting functionality between the security monitoring station and the company’s internal mirror system allows for tracking vehicles, logistics functions like route planning, and data exchange while meeting legal and staffing requirements.

• Outsourcing all central station activities to a private security monitoring station is an option for companies with limited devices that just need basic tracking functionality. The monitoring station would alert the company to activated alarms.

• When considering changes, factors like national/state standards for control stations, staffing needs for 24/7 repair support, potential legal issues from mistakes, costs of new software/hardware/maps, and staff to upload/download data must be evaluated.

• Optimization requires understanding customer business needs now and in the future, segmenting logistics flows by product, customer or order types, creating a strategy for each segment, comparing networks, and designing logistical channels to meet demands cost-effectively.

• The articles describe various supply chain software and technology solutions from different vendors, including warehouse management systems (WMS), transportation management systems (TMS), supply chain planning tools, and freight auditing software.

• Many of the solutions highlighted focus on improved user-friendliness, faster implementation times, better customer service, and a broader scope that offers end-to-end supply chain visibility rather than just focusing on one area like inventory or transportation.

• Integration of electronic commerce and Internet technologies to facilitate faster information sharing between companies, suppliers, and customers is a common feature among the products.

• Specific products and vendors mentioned include SeeCommerce (daily supplier performance reporting), The Lyte Group (supply chain network planning software), Maddocks Systems (transportation system), Majure Data (RF and distribution functionality for their WMS), Renaissance Software (Java-based Internet SCM suite), Radcliffe Systems (WMS available via application service provider model), Ann Arbor Computer (mid-sized warehouse solution), National Traffic Service (freight auditing software), and several others.

• The solutions demonstrated at the previous year’s conference also aimed to improve user-friendliness, speed implementation, and customer service while offering a more comprehensive view of the entire supply chain.

Here is a summary of the key points about negotiating the best parcel delivery deals:

• Pricing in the parcel delivery market is not as competitive as in LTL/TL markets since there are typically only two major carriers - UPS and FedEx. So carriers have less price pressure than LTL carriers.

• However, parcel carriers can offer greater discounts the more a shipper’s business profile and costs are understood. Knowing the specific cost drivers for a shipper’s business can help in negotiating leverage.

• Cost drivers include parcel characteristics like dimensions, destination, and pickup/delivery efficiency. Understanding these better positions a shipper for a mutually beneficial contract.

• Setting up parcel delivery requirements incorrectly can work against negotiating the best deal. Factors like commitment levels, service levels, and payment terms all impact pricing and need to be considered strategically.

• Effectively negotiating a parcel contract requires understanding how it differs from LTL/TL contracts more familiar to many logistic managers. Taking the unique dynamics of the parcel market into account is important for achieving optimal delivery deals.

• McLean recommends establishing longer-term contracts with carriers, such as 3-5 year contracts, instead of the typical 1-year contract. This allows for more stable pricing and a strategic partnership.

• Hallmark works closely with UPS and RPS to understand each carrier’s strengths and how they can address Hallmark’s business needs.

• McLean advises logistics managers to understand how their business impacts the carriers.

• Managers should gather their own information about carriers and delivery options, rather than fully relying on what the carriers tell them. This helps make more informed decisions.

• Developing strong relationships with carriers through longer-term contracts and knowledge of each other’s businesses can benefit both the shipper and their customers through improved service and options.

• E-commerce and online shopping is changing how businesses distribute products by changing order sizes and fulfillment methods. More products will be shipped part of the way via small parcel delivery services rather than traditional less-than-truckload or truckload methods.

• This is making proximity to parcel shipping hubs more important in site selection decisions. Port cities located near large consumer markets, like Seattle/Los Angeles for Asia and Miami for Latin America, are becoming more logical choices for warehousing facilities.

• A logistics provider implemented a multivendor consolidation program called SCORE to address inefficient duplications when multiple vendors delivered products to the same customers. By consolidating similar LTL shipments onto the same truck, they reduced costs and lead times.

• Benefits of the SCORE program included reduced inventory levels, faster inventory turns, higher on-time delivery rates, lowered shipping costs for both the 3PL and participating manufacturers, and productivity gains. The program showed the viability of delivering LTL quantities of products at truckload prices.

• Care must be taken when terminating distributor relationships to avoid potential legal issues around antitrust laws. Manufacturers need to thoroughly analyze the specifics of the relationship and have rational, documented reasons for termination that are not seen as anticompetitive.

Here is a summary of key guidelines from The Antitrust Counselor for developing procedures to terminate a distributor:

• Closely examine the distribution contract terms, obligations, damages provisions, etc. to evaluate risk of breach of contract lawsuit.

• Scrutinize any issues regarding territorial/customer restrictions, as the law favors manufacturers when termination stems from distributor violation of these rules.

• Identify relevant state laws on unfair competition and franchising that could restrict termination.

• Consider implications of offering jobs to the distributor’s employees or the distributor’s potential bankruptcy.

• Examine arbitration clauses to understand dispute resolution process.

• Evaluate pricing practices for compliance with Robinson-Patman Act.

• Consider various theories of liability and potential damages when assessing litigation risk.

• Provide longest notice possible and explain termination decision honestly but firmly. Follow fair procedures like allowing completion of existing deals.

• Obtain legal advice and document all communications thoroughly.

• Consider not terminating if risks outweigh distributor problems or build a stronger case before terminating high-risk distributors.

The guidelines aim to help manufacturers comprehensively evaluate legal and business risks when terminating a distributor.

• The report discusses inventory management practices among various partner companies through survey results and case studies.

• According to the findings, companies considered inventory turnover less important than customer service or return on investment. All sought to reduce duplicative inventory items and numbers of suppliers.

• Companies added more inventory items than they removed but had specific criteria for additions like minimum sales numbers. They would not stock an item just based on promises of future orders.

• Excess inventory and maintaining inventory accuracy were identified as major challenges. Companies had programs for cycle counting, removing excess inventory through returns, transfers, or price reductions. The most common cause of excess inventory was changing customer demands rather than forecasting issues.

• A consistency was found in EOQ formulas not perfectly fitting all circumstances, possibly due to inconsistent treatment of carrying costs between companies and situations.

• The company can transmit/receive data via FTP as well as high-speed modem connections. Received bills are likely visible to clients/carriers online.

• Processed data can be accessed online via modem or the Internet.

• The company discusses current and planned technologies for database development, applications enhancements, and maintenance.

• The company is able to integrate US domestic and international data for global site analysis.

• The company handles common EDI versions like EDIFACT and will continue to support non-Y2K compliant versions of EDI translations.

• The applications can process UN/EDIFACT data receipt and translations for EDI.

• The applications have capabilities for multicurrency handling.

The company researches financials of potential providers by examining audited financial statements, fidelity bonding, investment policies, and makes sure freight payment is the core competency and clients maintain some control after outsourcing. This helps ensure clients’ freight funds are properly managed and protected.

Here is a summary of the key points about improving order fulfillment processes:

• Electronic ordering is increasing rapidly, with estimates that electronic orders will grow from 27% in 1998 to 47% by the end of 2000. This means companies will need to reduce staff handling traditional orders and rely more on automated systems.

• Ways to improve the order fulfillment process include coordinating initiatives to improve on-time delivery performance, investing in automation technologies, implementing order tracking systems, putting oneself in the customer’s shoes, sharing information with customers, and partnering with suppliers.

• Automating order receipt through web and EDI technologies can simplify order management processes. Technologies like radio/satellite communications and trip recorders can also improve fleet management.

• Benchmarking and measuring key metrics like on-time deliveries, costs, and expenses can help identify areas for improvement. Sharing performance data with all employees promotes accountability.

• Preventative maintenance, strict adherence to maintenance schedules, and using quality mechanics are important strategies for controlling fleet costs like repairs and downtime while extending vehicle lifespans.

The overall goal is to streamline the order fulfillment process, improve the customer experience, and enhance coordination across the supply chain through technology, information sharing, and strategic partnerships. This allows focusing on core competencies and meeting customer needs more efficiently.

• Lucent Technologies was receiving manufactured parts from its own sites and suppliers that were all being shipped to a Lucent warehouse and then to the end user, adding unnecessary transportation and inventory costs.

• Lucent implemented a merge-in-transit program with GeoLogistics Americas to consolidate shipments from manufacturers/suppliers at consolidation points near the end customer before final delivery.

• This eliminated redundant transportation moves and reduced inventory carrying costs by avoiding storage at the warehouse. It allowed Lucent to better react to forecast changes.

• Success of the program required close coordination and information sharing between Lucent and GeoLogistics. Transportation became secondary to reliable information flow.

• Lucent achieved a 40% reduction in inventory, $8 million less in finished goods inventory, shorter delivery times and improved on-time delivery of complete orders as a result of the program. The primary goal was improved customer service rather than direct cost savings.

• M&M/Mars is working to achieve perfect order fulfillment by implementing a phased approach to improve shipping orders correctly.

• Benefits expected include improved customer service by identifying all failure points, stronger customer relationships by eliminating inefficiencies, and lower costs through activity-based cost analysis.

• They made changes like forcing smaller distributors to buy from larger ones, improving lead times.

• So far they have spent $150,000 on the project and expect future expenses to be high.

• A key part of the strategy was consolidating orders at two new order consolidation centers (OCCs) managed by UPS to expedite shipments and reduce referral orders.

• This improved delivery times for customers from 7 days to 3-5 days. It also improved tracking and reduced damaged shipments.

• Dealer satisfaction scores increased 20% with the new system due to faster, more reliable deliveries allowing better customer service.

This passage provides information on how the transition to the Euro currency in Europe will impact logistics managers in the US. It discusses:

• The euro will make it easier for logistics managers to compare costs across European countries and suppliers, expanding their options.

• However, most American companies are not adequately prepared for the changes required by the euro. Logistics managers need to evaluate their European suppliers and markets.

• Systems need to be upgraded to handle euro transactions. Software will need to support price conversions between existing currencies and the euro during the transition period.

• Managers have two options for their migration strategy - run parallel systems during the transition or do a phased implementation of the euro.

• The impacts of the euro on American companies is uncertain but will make the European market more competitive by 2002. Preparation time depends on individual company effort and software readiness.

• Scanning speed for black-and-white images is 15 pages per minute, while color documents are 4 pages per minute.

• Documents are sent to the UPS website (www.ups.com) for digital delivery.

• Senders must provide the recipient’s email address.

• Files are sent as PDF or TIFF files and can be text or pictures.

• Recipients get an email notification with a URL link to access the document on the UPS site.

• There is no signup fee, but each transaction costs $2.50. The scanner costs approximately $3,000.

• Ethical standards are generally consistent globally, even when dealing with suppliers in different countries. Unethical activities tend to be the same domestically and internationally.

• Communication of ethics policies and procedures helps minimize unethical behaviors. Training and evaluation can also help, especially with more subtle issues.

• nationality, relationship length/type, and job pressures do not correlate with level of unethical activities. Compliance is expected regardless.

• Relationships with more perceived unethical issues result in lower buyer satisfaction and perceived supplier performance. Clear communication is important.

• Sourcing goods from offshore suppliers can provide benefits but also presents challenges that companies large and small have encountered. Cultural differences and managing a globally dispersed supply chain are particularly difficult obstacles.

• Building strong relationships based on cultural understanding is vital for successful international business dealings. Things like language, customs, personal space norms vary widely across cultures.

• Developing common ethical standards for global supply chain operations, similar to quality standards, could help address some challenges.

• Companies must establish well-defined business processes and information sharing networks to effectively manage geographically dispersed supply chains.

• Total costs of offshore sourcing, including logistics, can be difficult to determine accurately when the supply chain is long and complex. Managing third-party providers introduces further complexity.

• To maximize value from offshore sourcing, companies should carefully select specific high-potential products to source overseas, conduct thorough supplier evaluations on-site, resolve technical/quality issues upfront, and closely monitor supplier and country conditions over time. Effective order administration is also important.

An exclusive survey revealed five best practices for controlling logistics costs:

1. Renegotiate shipping rates - Work to negotiate better rates with carriers through pooling purchases or other means.

2. Reduce freight costs - Look for ways to cut transportation expenses through optimization, postponement strategies, or direct shipping.

3. Streamline operations - Identify and eliminate unnecessary steps or duplication in logistics processes.

4. Work with suppliers - Collaborate with suppliers to coordinate activities, share information, and improve efficiency.

5. Leverage logistics technology - Use systems, standards, and technologies to integrate functions, automate processes, and gain visibility.

Other practices like reducing warehouse storage and inventory costs were less impactful according to the survey, as logistics managers may have already cut those areas as much as possible. The top practices provided faster payoffs through renegotiating rates, lowering freight, and optimizing operations.

Here is a summary of the top five cost-controlling methods from the passage:

1. Renegotiated Shipping Rates/New Carriers - Companies reduced costs by changing carriers to focus on regional transportation and negotiate better rates. This allowed for cost savings of up to 7.5% in some cases.

2. Reduced Transportation/Freight Costs - Companies worked with carriers on zone billing and coordinated product delivery with sales to reduce freight costs, achieving savings of up to $250,000 in some cases.

3. Streamlined Shipping and Receiving - Companies implemented processes like delivery appointments and improved dock operations to streamline inbound and outbound processes, reducing dock times and saving $50,000 on bracing materials in one case.

4. Worked Closely with Suppliers - Improved forecasting, solved supply chain issues, and assessed processes through closer supplier partnerships. This enabled just-in-time production in one example.

5. Made Use of Logistics Technology - Companies utilized internet technologies, barcoding, and electronic documentation to automate processes and reduce manual work, saving up to 20% on processing in one instance.

Logistics managers can use a decision support system (DSS) to identify costly procedures and resources. For example, the Supply Chain Designer DSS is meant to flag expensive customers and shipments as well as underutilized resources.

However, implementing a DSS takes significant work. Managers must understand how the models work, analyze recommendations critically rather than accepting them at face value, and consider soft factors like customer service. Experience is also important for properly interpreting DSS outputs.

When seeking a DSS, managers should get senior-level buy-in, clearly define goals, and rely on experts to build models and provide guidance. Thoroughly evaluating vendor and consultant knowledge is crucial for success. Ongoing learning and refinement of the system is also important to maximize benefits.

• Many logistics companies are improving their websites to provide customers easier access to shipment tracking, price quotes, documentation, and other logistics services online. This allows customers to better manage their supply chains.

• Specific improvements mentioned include Yellow Freight providing improved tracking and rate quotes online, Emery Worldwide simplifying site navigation and offering shipment monitoring tools, and American Freightways adding service mapping and international rates.

• The Hub Group launched an online system for managing drayage that streamlines order processing and provides shipment visibility.

• Emons Transportation launched a site to promote its rail transportation services.

• New sites like GoCargo aim to improve maritime shipping efficiency by enabling carriers and shippers to bid on container loads. Orient Overseas Container Line also launched an online rate inquiry service.

• Sites like Cargo4less and ShipHere allow shippers to get price quotes and reserve cargo transportation services online without existing carrier accounts. United Airlines Cargo also improved its online reservation system.

• Customizable sites like myABF and my.roadway.com give customers tools to manage shipping, view documentation, and get shipment updates.

So in summary, many logistics carriers are improving their websites and online tools to provide customers faster and easier access to shipment information, pricing, and logistics services to help customers better manage their supply chains.

• Logistics managers are looking for ways to save money on freight bills from carriers like FedEx, UPS, and Airborne due to rising costs.

• Hiring a professional negotiator can save up to half of negotiated savings by leveraging relationships with carriers.

• Checking delivery guarantees and claiming refunds for missed deadlines can save 5% on average.

• Researching trade association discounts can yield 10-20% discounts in many cases.

• Using alternative private insurance instead of carrier insurance can save up to 65% on premiums.

• Avoid relying on a single carrier to avoid issues like service disruptions.

• Renegotiating rates directly, focusing on volume discounts, can yield 10-20% discounts.

• Using computerized shipping systems allows comparing rates across carriers for the best prices.

• Logistics managers are turning to online transportation marketplaces and e-marketplaces to more easily negotiate rates and contracts within 24 hours by accessing multiple carrier options in one place.

• Several e-commerce marketplaces are mentioned that connect shippers, carriers, and brokers online to facilitate transportation bookings and optimization. These include Transportation.com, QuoteShip.com, CargoFinder.com, Eurotrans.com, Bid Freight.com, Cargo4less.com, and others.

• These marketplaces aim to streamline the transportation and shipping process, provide competitive bidding options, increase visibility and collaboration across supply chains.

• However, the survey found that many shippers and carriers have been slow to adopt e-commerce and digital transformation remains limited. Contracting and negotiations are still paper-based for many.

• Outsourcing logistics is discussed as a good option for spin-off companies to avoid high costs of owning logistics infrastructure. BC Components, a spin-off of Philips Electronics, successfully outsourced US logistics to UPS Logistics Group.

• This is expected to help BC Components reduce lead times, improve customer service and inventory management through UPS LG’s warehouse technology and processes. Outsourcing allows the company to focus on its core manufacturing operations.

The article discusses how companies can reduce logistics costs by better controlling inventory. It highlights data from a survey of logistics managers that found inventory control strategies were key to cost cutting over the past year.

Some strategies identified include regularly reviewing inventory data to identify reductions and improve productivity, working more closely with suppliers on vendor-managed inventory programs, and planning and forecasting inventory needs better through warehouse management systems and software. Conducting transportation schedule reviews was also found to potentially reduce inventory levels for some companies.

The data showed industrial manufacturers made the most progress reducing costs by partnering with suppliers on inventory holding. Consumer goods companies focused more on carrying cost cuts. Larger companies prioritized carrying cost reductions as well. Overall, taking an aggressive approach to inventory analysis and supplier partnerships was found to be highly effective for cost reduction.

• Caterpillar worked to revamp its logistics and customer service for its North American track operations by consolidating all assembly at one facility in Peoria, Illinois. This was done to cut costs and improve material flow and coordination.

• As part of the overhaul, Caterpillar improved demand forecasting, established a replenishment system with fixed-lot sizes based on 6-month forecasts, and created an “inventory bank” to manage parts usage.

• Components are delivered just-in-time to the assembly lines based on weekly build schedules. This requires 10-15 truckloads of parts per day.

• There were initial issues with the transition including inadequate storage space at the new facility, too many bulk component deliveries, and excess inventory left at old suppliers.

• Caterpillar resolved these start-up problems by better sizing storage needs, establishing daily just-in-time deliveries for large components, improving material flow in the facility, and reducing backup inventory elsewhere.

• The goals of cutting costs, improving material flow and coordination, and providing better customer service through consolidated assembly have been achieved through this logistics redesign.

• A new supplier operation opened and the old suppliers began shipping surplus material to the new location. However, the shipments quickly filled up available space and had to be slowed until a demand-based plan was established. This caused some concerns about the supplier’s ability to manage assembly.

• Inventory levels were gradually reduced as the new supplier developed a new scheduling routine with customers and component suppliers to overcome capacity and timing constraints.

• Demand forecasting was changed to include OEM customer forecasts, which improved scheduling for small volume customized orders.

• Inventory reductions of $6 million for steel and over 30% for components were achieved due to consistent ordering and assembly processes.

• Inventory levels for replacement parts were reduced by over $22 million through on-time delivery and quick responses to orders, while maintaining 95%+ customer service.

• Sprint PCS identified ways to reduce reverse logistics costs, including understanding business needs, establishing return supply chains, strategic partnerships, gatekeeping returns, issue resolution, and metrics.

• Ingersoll-Rand quantified its logistics spending across many divisions and identified millions in potential savings through process improvements.

• The findings from a logistics cost analysis were significant. Total logistics costs were estimated to be over $550 million in 2000, with 45% from transportation, 35% from labor, and 20% from inventory financing charges. Costs were projected to grow to $650 million by 2001.

• $170 million in potential cost savings opportunities were identified, with $20 million from near-term tactical initiatives within 12-18 months. These included establishing logistics competency centers and improving transportation, fleets, and supplier management.

• Longer-term opportunities included integrated systems, scanning/barcoding, order management, reducing product options, and optimizing inventory/distribution networks.

• In response, a small corporate logistics organization was formed to coordinate initiatives across business units. They aimed to capitalize on tactical opportunities to achieve $25 million in annualized savings by 2000 through improvements in transportation, distribution, and business alignment.

• Key initiatives included aligning logistics processes, leveraging transportation volumes, improving demand management, mapping transportation services, and establishing an intranet site for knowledge sharing.

• The company recognized logistics as more than just transportation and critical to the entire value chain. Process improvements helped achieve a competitive advantage through lower total logistics costs.

Here are the key points about improving logistics operations from the passage:

• Determine optimal inventory levels based on historical data and forecasting to avoid excess safety stock.

• Evaluate warehouse storage schemes and cube space utilization to maximize efficient use of space.

• Integrate the warehouse management system (WMS) with other logistics systems like financial, shipping, and order fulfillment for end-to-end visibility.

• Consider total cost of ownership including inventory holding costs and shipping costs. Most companies don’t know their true total landed costs.

• Be responsive to customer needs and changes in requirements to maintain competitiveness.

• Pursue supply chain optimization strategies like drop shipping directly to consumers to reduce costs and improve timeliness.

• Leverage logistics technology and e-commerce, including tracking/tracing capabilities and information sharing with customers via EDI, websites, etc.

• Continuous improvement is key to optimizing operations and reducing costs from non-conformance issues.

The main points focus on optimizing inventory, warehouse operations, costs and integration/visibility across the supply chain through the use of data, technology and responsiveness to customers.

• Creating project teams was among the top five most effective changes companies made to improve logistics department operations. Managers say teams are beneficial for identifying savings opportunities.

• One manager describes how a project team focused on throughput costs and transportation, examined processes, developed new procedures, and implemented changes that reduced costs over 20%.

• Teams also help strengthen relationships between departments.

• Implementing technology and automating processes was another highly effective change, cited by almost 19% of respondents. Both sophisticated ERP systems and simpler solutions like barcode labeling reduced costs and improved efficiency.

• Vendor managed inventory and improved forecasting methods also helped companies better control inventories and cut related costs.

• Developing creative transportation programs, like consolidating shipments or switching from truckload to LTL freight, reduced transportation costs for many companies.

• Changes can work both domestically, like centralized shipping through one port, and internationally. The goal is always reduced costs.

So in summary, the top effective changes centered around project teams, technology/automation, inventory control methods, and innovative transportation programs. All with the aim of cutting costs and improving operations.

Here is a summary of the key points from the article:

• The article shares tips from a survey of logistics managers on common problems they face and how to solve them.

• Tips include better labor planning to balance inbound/outbound work, redesigning warehouses for greater efficiency, cross-training workers, benchmarking activities, renegotiating freight rates, reducing order processing costs, minimizing obsolete inventory, and having suppliers hold inventory.

• Other tips are to establish foreign trade zones to reduce tariff costs, use technology like shipping management systems, and demand investment in rail capacity to ease congestion issues.

• Implementing many of these tips like warehouse redesigns, freight rate negotiations, inventory reduction efforts, and supply chain cooperation have led companies to save hundreds of thousands to millions of dollars annually in logistics costs according to the survey respondents.

So in summary, the article outlines a variety of operational, process, technological, and supply chain relationship improvements that logistics managers reported achieving meaningful cost savings and efficiencies through based on a survey of common problems faced.

Here are the key points from the passages:

1. A transportation manager predicts that adopting transportation management software will provide significant time savings in calculating freight charges, invoicing, and improving customer service by capturing shipping data.

2. A logistics manager says implementing a new radio/telephone system with dispatchers, drivers, and customers saved hundreds of dollars in downtime and duplicated services, and improved communication for all parties.

3. Robert Olsen recommends an eight-step approach to determining whether to make or buy a warehouse management system (WMS), including examining requirements, evaluating build vs buy, considering risks, costs, timelines, and functionality needed.

4. Important factors in the decision include available resources, lost opportunity costs, project risks, facility-wide impacts, and ensuring the final product matches the initial concept.

5. Benchmarking productivity metrics like revenue-to-operating cost ratios helps justify WMS projects by measuring impacts on costs like labor, utilities, insurance over time.

• Employees deserve some flexibility and tools to do their jobs effectively without constant oversight. Give them the autonomy and resources needed.

• Accurate and timely communication of information is important so employees understand what’s going on and can make good decisions.

• Trainers should be properly certified so training provided, especially videos, is effective rather than just convenient.

• Ensure jobs and skills matched so people are properly trained for their roles.

• On-the-job training (OJT) is more impactful than on-the-job experience (OJE) alone. OJT is structured while OJE leaves people to figure it out themselves. OJT brings people to competence four times faster than OJE.

• Supplier partnerships are often short-lived, typically ending within 3 years. Logistics managers seek partnerships to access capabilities they lack alone. Keys to solidifying partnerships include mutually beneficial relationships and removing common causes of failure like poor change management or lack of ongoing evaluation.

• Service alliances should also be considered and developed using steps like identifying partners that benefit, establishing clear roles, formal communication systems, and dispute resolution procedures.

• The article discusses different models for fulfilling orders for online retailers, which is critical for a good customer experience.

• There are three main fulfillment models: outsourcing to a fulfillment service provider, drop shipping directly from suppliers, or bringing fulfillment in-house.

• Outsourcing to an FSP makes sense for early-stage retailers with low volumes, as it allows them to start fulfilling orders right away for $0.30-$1 per order. However, economies of scale favor in-house fulfillment as volumes increase.

• Drop shipping lets retailers offer a variety of goods without holding inventory, but offers the least control.

• Bringing fulfillment in-house requires the largest upfront capital but offers the most control long-term. However, it has a steep learning curve and time to set up operations.

• Another option is acquiring fulfillment expertise through buying a distributor or mail-order company that already has the necessary networks and experience.

• Dedicated fulfillment software can also help facilitate the order fulfillment process.

In summary, the article examines different fulfillment models and considerations for online retailers in efficiently meeting customer shipping needs. It weighs the tradeoffs of outsourcing, drop shipping, or building fulfillment internally.

• Companies are realizing the importance of order fulfillment but are struggling to find the right software solutions as vendors overstate their capabilities. Standalone order management systems are trying to fill the gaps left by ERP systems by offering scalable multichannel order processing and other capabilities.

• Working with the OMS is the WMS, which must be highly configurable and scalable with decision support. It needs to execute instructions from the OMS to prepare orders for shipment.

• An order fulfillment system is also needed to provide real-time inventory visibility, order control and support customer service levels for online retailers.

• To succeed in e-fulfillment, companies need to approach it as a comprehensive process rather than individual operations. Training, long-term systems, and rewarding integrated vendors are also important.

• CEOs are looking to logistics managers to improve customer service and cost control through stronger supplier relationships, better labor strategies, and managing all aspects of the customer order cycle.

• Outsourcing relationships often fail within 5 years, so contracts need to account for potential terminations.

• There are strategic reasons for terminating like mergers/acquisitions resulting in redundant facilities, or changes in corporate/logistics strategy.

• Performance-related terminations are difficult but can let the contract expire normally or terminate early with proper notice and cause. Proper documentation and communication is important.

• Involving new providers early in the transition helps. Developing contingency plans like alternative distribution centers is important in case of total breakdown.

• Communication internally and minimizing customer impact is key. The client should maintain professionalism and learn from mistakes.

• Emotional terminations due to new management preference should be avoided due to potential legal issues.

• Terminations for cost reasons can happen if the provider is no longer competitive, but proper notice and willingness to renegotiate can sometimes save the relationship. A smooth transition is ideal.

• A provider that renders satisfactory service but becomes too expensive may see their client terminate the contract at the end of the contract term and seek a new provider or bring the operation in-house. These terminations are usually less adversarial since there are no performance issues.

• Terminating a contract should be carefully considered by comparing the existing provider’s new increased rates to the costs of not accepting them, such as costs of relocation, training, and executive time spent on the transition. The rate increase may end up being the lower-cost option when these other costs are taken into account.

• An annual survey of logistics executives finds that inventory management remains a key responsibility and international logistics responsibilities are increasing. Logistics functions are becoming more centralized. The number of women in logistics roles is growing but still a minority. E-commerce and information technology are seen as important future areas for professional development.

Here are the key factors that will influence the growth and development of e-commerce/e-business according to the passage:

• E-commerce/e-business (34%) was cited as the most influential factor in the survey. Rapid growth of e-commerce/e-business will drive growth in logistics and supply chain management.

• Supply chain management integration (26%) was the second most influential factor. Increased integration of supply chains digitally through e-commerce/e-business will influence growth.

• International trade and operations (10%) was also cited as an influential factor. As e-commerce enables more cross-border trade, international operations will grow in importance.

So in summary, the top three factors influencing the growth of logistics management according to the survey are:

1. Growth of e-commerce/e-business

2. Increased supply chain management integration enabled by e-commerce

3. Expanding international trade operations due to e-commerce enabling more global trade

• The article discusses Case Corporation’s strategy of outsourcing its international logistics activities to third-party logistics (3PL) providers in order to focus on its core competence of manufacturing.

• Case formed strategic alliances with 3PLs to gain more control over the outsourced functions. This addressed issues like poor cycle times, unreliable delivery, and excess inventory.

• Case worked with consultants to develop a vision for their supply chain and identify activities to outsource. They outsourced functions like transportation to 3PLs.

• Case selected Fritz Companies as the lead integrator and Schneider National and GATX to handle transportation and warehousing in different regions.

• Establishing strategic alliances with the 3PLs was important to gain competitive advantages. Clear objectives and synergies between Case and the 3PLs were defined.

• Remaining open-minded about contracts and realizing 3PLs have different objectives than the client were also important lessons learned from Case’s outsourcing experience.

Here are the key points from the passage:

• When outsourcing logistics functions to 3PL providers, it’s important to understand your existing logistics costs and capabilities in order to properly determine how to compensate providers. Not having this baseline information could result in overpaying or underpaying providers.

• Develop multi-year contracts with 3PLs that account for your company’s potential future business needs and directions, not just present needs.

• Trust is important but can be dangerous if taken too far. Ensure providers can truly deliver what they promise in terms of capabilities and visibility.

• Transition outsourced functions to 3PLs in phases over time rather than all at once. This allows for proper measurement, improvement, and expansion of responsibilities as the relationship develops.

• Appoint a single point of contact within your company to facilitate communication and keep 3PLs focused.

• Outsourcing changes the logistics manager’s role from an active player to more of a coach/oversight role guiding the 3PL team. Proper management is still required.

So in summary, key factors for successful 3PL outsourcing include understanding baseline costs, planning for future needs, establishing trust but also verification, phased transitions, clear points of contact, and adapting one’s management approach.

• Gunter warns against “playing the ‘you pick what is important’ game” with vendors, where the vendor tries to get the customer to choose which functionality will be delivered late in an implementation.

• He urges customers to “hang tough” and not allow vendors to draw them into choosing late deliverables.

• In other words, Gunter advises customers not to compromise on implementation timelines or functionality, and to maintain pressure on vendors to deliver everything on the agreed schedule.

• He suggests not allowing vendors to shift deadlines or reduce scope without the customer’s consent. The goal is to avoid scope creep and delays caused by vendors.

Here is a summary of the key points in the provided text:

E - E-commerce and purchase (P) cards dominated the recent National Association of Purchasing Management (NAPM) conference. Major announcements included the integration of P-cards with electronic procurement systems from Visa, MasterCard, and American Express.

M - MasterCard announced expanding its use of the ELEKOM Procurement system from a pilot of 250 employees to 2,300 users. It also plans to offer a “one card” solution for purchases, travel, and fleet needs.

E - PECO Energy’s National Energy Team, which helps companies reduce energy costs up to 20%, drew significant interest at the show for its utility procurement services.

N - Several new supply chain software solutions were highlighted, including SupplyChannel from AGENTics for online procurement management, and PurchasingNet-SQL from American Tech for mid-large size purchasing with browser or Windows interfaces.

T - In summary, the text discusses the growing use of electronic solutions like e-procurement and P-cards at the NAPM conference, along with new supply chain software offerings. PECO Energy also saw strong interest in its utility procurement services.

• The passage provides updates on various procurement/supply chain management software products released by different companies.

• It describes new features and capabilities of software versions 4.0 and 5.0 from Ariba Technologies for acquisition and management of operating resources.

• Bellwether Software released Purchasing Management Extra (PMX) with a new warehouse management module.

• Celerity Solutions unveiled Advanced Supply Chain Planner, an event-driven planning tool that re-evaluates supply plans in real-time.

• Other software products mentioned include MarketStream from CONNECT, D&B Supplier MarketPlace from Dun & Bradstreet, an updated version of PECOS Procurement Manager from Elcom Systems, and RHYTHM Global Procurement Manager from i2 Technologies.

• The passage also provides brief descriptions of new procurement software from Intelisys Electronic Commerce, RightWorks, TRADE’ex, and Waltrip.

• It includes an exclusive survey showing that over 20% of purchasing professionals in companies with fewer than 500 employees and over 23% in larger companies are installing EDI technology.

Here is a summary of the onic solutions proposed by various respondents:

• Several companies mentioned implementing ERP systems with EDI capabilities to enable more accurate and timely information exchange with suppliers. This was seen as beneficial for both parties.

• One large company is running the full gamut of technology solutions, from existing EDI to planned implementation of online catalogs and internet/intranet applications over the next 2-3 years to better connect with major suppliers.

• One mid-sized company plans to implement an internet-based MRP data link with suppliers to directly transfer manufacturing requirements in real-time, aiming to reduce lead times.

• A small manufacturer is using the internet for kanban replenishment orders with key suppliers, which is proving effective so far.

• Several companies mentioned using or expanding use of the internet for various sourcing purposes like solicitation distribution and electronic invoicing arrangements. Suppliers have generally been enthusiastic.

• One large aerospace company is avoiding EDI issues by developing its own electronic commerce system using standard office and internet tools for easier supplier connectivity.

• Companies are also implementing supplier performance measurement systems, cost-based supplier rating systems, tracking long-term materials requirements, and leveraging purchasing across business units using internal extranets/networks.

In summary, the respondents proposed a variety of innovative technology-driven solutions centered around ERP/MRP integration, internet/intranet usage, and performance measurement to better connect with suppliers and realize benefits like cost savings, reduced lead times, and continuous improvement. Suppliers have generally been cooperative with these new initiatives.

• Thomson Legal & Regulatory wanted a way for its companies located around the world to securely access contracting and supplier information. They created an extranet site that is password protected with two levels of security and accessible via common web browsers.

• The extranet site includes summary information on contracts, pricing information provided by suppliers, contract bulletins, and publications from TOPS (Thomson Organization Purchasing System). It also has a discussion forum and directory of purchasing contacts.

• This allows dispersed Thomson companies to overcome the lack of a common communications platform and provides consistent supplier/customer information to both Thomson companies and suppliers. It helps develop a purchasing community within Thomson.

• The password protected web-based system met the companies’ needs to access information securely via a browser. It enables better management of supplier/customer information and relationships through the shared access and discussion capabilities.

Here is a summary of the key guidelines for a successful fulfillment strategy based on the provided information:

• Consider using dedicated e-fulfillment distribution centers designed specifically for picking and packing smaller individual orders, as opposed to traditional facilities designed for full cartons/pallets. Currently only 11% of companies use separate e-business facilities.

• Ensure systems integration between fulfillment systems and other supply chain/e-commerce systems to enable effective information sharing and exchange. 40% of surveyed companies lacked this integration.

• Share detailed order, inventory, tracking and customer data across customer service channels for consistency.

• Streamline order processing by integrating web orders directly into fulfillment systems instead of manual re-entry. Only half of companies had achieved this.

• Optimize shipping strategies for speed and individual order fulfillment to meet rising customer expectations. Most companies had not changed traditional shipping methods.

• Appoint full-time e-business leadership and dedicate sufficient resources to drive fulfillment strategy successfully, as many companies treated e-business half-heartedly.

• Consider outsourcing some fulfillment activities like order processing and shipping to third-party providers in order to focus internally on customer relationships. This option was growing in popularity.

The passage discusses key features that logistics managers should look for in a web-based procurement solution. It highlights research from Zona Research that surveyed logistics managers on the importance of different features.

Some important features included allowing customer-defined purchase rules, supporting dynamic online catalogs, and tailoring solutions to specific industries/verticals. Over half of respondents felt these were somewhat or extremely important.

Additionally, the majority of respondents felt that web-based procurement should speed up requisition and order fulfillment cycles. Nearly half said this was an extremely important feature. Similarly, most thought it was important for solutions to enable more efficient use of preferred suppliers.

In general, the research showed that logistics managers believe key considerations for web-based procurement include giving customers input, online catalogs, industry-specific tailoring, and faster order processing through preferred suppliers. These features can help online procurement drive down costs and improve purchasing.

• The passage discusses how logistics managers’ needs are being incorporated into new product development (NPD) software and projects. Supply chain considerations have become critical to the NPD process.

• Supply chain planning systems can analyze design options and provide visibility across the product lifecycle, including downstream supply chain effects. This allows for strategic planning. Companies mentioned include i2 Technologies and Adexa.

• ERP applications are also valuable for NPD, leveraging inventory data. Examples given are Oracle and SAP.

• Portfolio management applications give managers a view of all development projects to assess status, risk, resources, schedule, and benefits. Companies mentioned are Integrated Development Enterprise and XIS.

• Project management applications are suited to track project status focused on resources, tasks, and schedules. Examples provided are Primavera, Artemis Management Systems, Nemosphere, Framework Technologies, and Vite.

In summary, the passage discusses how logistics needs are being integrated into various software solutions for new product development, given the importance of supply chain considerations in the product development process. It provides examples of several leading software providers.

• Vite Project is a desktop application used for strategic project planning on Windows, not for tracking project status. It identifies bottlenecks and potential failures based on assigned resource skills.

• Requirements management software helps define customer specifications and track changes throughout the project life cycle. This helps prevent project failure by ensuring requirements are met.

• ERP software allows managers to see projects and activities across multiple projects to monitor capacity, costs, schedules, etc.

• PLM applications manage product-related information like configurations, documents, bills of materials throughout the product lifecycle.

• Collaboration applications are important for sharing information and communication during development. Examples include ipTeam, CoCreate, Enovia, Exchange/Outlook, GroupWise, and eRoom.

• The 10 Best Warehouse Networks list recommends ideal warehouse locations based on minimizing average distance to the US population. A free analysis of individual company networks is available from Chicago Consulting.

• Effective employee motivation and retention programs in warehouses are important. Common techniques are incentives, recognition, parties, merchandise, newsletters, and tuition reimbursement. Management support is key to success.

• The articles discuss organizations that have realized significant cost savings and productivity improvements by consolidating warehouses, relocating facilities, and redesigning warehouse layouts.

• Relocating to owned warehouses, combining sites with distributors or suppliers, and streamlining picking/packing processes through warehouse redesign have reduced costs by hundreds of thousands to over a million dollars annually for some companies.

• Productivity also increased as a result of consolidation and redesign efforts that decreased walking times, increased storage density, and facilitated high-velocity picking.

• Location-seeking software models allow companies to analyze warehouse/distribution networks and optimize the number, location and size of facilities while considering costs and customer service metrics. Surveys found most logistics professionals plan to conduct such an analysis in the coming year using a third-party computer model.

• Flexibility, ease of use and accurate inventory/cost modeling were cited as the best features of location software models, while difficulties with data input, complexity and poor inventory handling were called out as weaknesses.

• A strategic 11-step plan is recommended to guide the warehouse management system selection process and ensure new systems deliver on reducing errors, improving space use and lowering labor costs.

Here is a summary of the 11-step process for developing a warehouse strategic plan:

1. Establish a cross-functional project team to define objectives and priorities.

2. Establish a database including planning data, growth projections, requirements, costs, procedures, etc.

3. Identify and document alternative warehouse strategic plans for materials handling, storage, control systems, processes, etc.

4. Evaluate alternatives considering investment, operating costs, economic analysis, qualitative factors.

5. Specify the selected plan with detailed systems and process layouts.

6. Establish a qualified vendor list.

7. Develop and release functional equipment/system specifications for bidding.

8. Facilitate vendor questions and bid responses.

9. Coordinate vendor site visits and demonstrations.

10. Evaluate and select vendors based on bids.

11. Finalize the facility layout based on vendor feedback to optimize flow and space.

The summary then provides guidance on developing a customized warehousing strategic master plan with 7 key steps: defining objectives, gathering data, identifying customized warehousing strategies, economic analysis, selection, implementation planning, and execution.

• The article discusses strategies for making warehouse operations successful in the 21st century. It outlines 10 trends that warehouse managers should follow.

• The top trend is focusing on customers through partnerships, joint planning, and being efficient and responsive.

• Operations need to compress time through more frequent shipments and faster receiving/putaway/picking/shipping. Continuous flow and cross-docking are important to streamline operations.

• Electronic data and transactions can simplify tracking, reduce delays and labor, and connect warehouses to suppliers/distributors.

• Customized services like labeling, packaging, and assembly will continue growing.

• More companies will use third-party logistics for leverage and service levels.

• Orders will shrink but need to be handled faster with better information.

• Automation, not labor, will be relied on to handle increasing volumes through conveyors, sorting equipment, RF technologies.

• Workers need enhanced technical skills to work with new technologies, and companies must train and cross-train employees.

The key message is that warehouse managers need strategic approaches like these 10 trends to successfully operate warehouses in the digital age and meet rising demands and expectations. Focusing on customers, compressing times, and leveraging technology are emphasized.

• Successful companies need inspirational leaders who can clearly communicate an organizational vision and lead the company towards achieving that vision. This inspires high employee performance and accountability.

• A recent study identified best practices for integrating warehouse technology like WMS systems. Some key findings include:

1. ERP warehouse modules are often insufficient for distribution needs, with around 60% of companies rejecting their ERP’s warehouse functionality.

2. The WMS market is fragmented with no clear leader, though packaged WMS solutions are gaining popularity over custom software.

3. Companies are increasingly fitting operations to standardized WMS software rather than customizing software, since commercial packages incorporate best practices. Modifications should only be made if they create real competitive advantage.

4. Focus should be on the overall technology-enabled business solution rather than just the software. Process redesign, organizational change, flexibility and long-term strategy are important.

• Customer demands are driving increased warehouse automation through requirements for value-added services, information sharing, and supply chain visibility enabled by WMS, EDI, RFID and other technologies. These systems are becoming essentially mandatory for warehouses.

• WMS implementations often face issues with scope creep and budget overruns due to hidden costs that are overlooked in initial planning.

• These hidden costs include things like additional labor needed during implementation and startup to maintain efficiency, software and hardware infrastructure expenses, personnel costs for the implementation team, training costs, and retention bonuses for key employees.

• Data entry for item and location records is also a significant cost, taking up 60% of initial configuration time. Software can help automate this but still requires setup and validation.

• Speakers at a Distribution/Computer seminar emphasized properly accounting for these hidden costs in WMS justifications and budgets to avoid cost overruns and ensure accurate return on investment calculations. Managing scope creep and clearly documenting any changes was also advised.

• Failing to factor in all costs can result in a WMS implementation being deemed a technical success but a financial failure due to ballooned expenses invalidating the original cost justification.

• Maintaining a standing WMS team is required after a warehouse management system (WMS) implementation to support ongoing operations and changes to the warehouse configuration.

• Annual costs for a WMS include maintenance fees (typically 15% of the license fee), software licensing fees, hardware maintenance contracts, and staffing an in-house team for system support and maintenance.

• When budgeting for a WMS, it is important to consider these ongoing “other costs” in addition to the initial hardware and software costs to get an accurate picture of the total financial commitment.

• Fifteen points are identified to consider when managing warehouse logistics, such as installing automatic identification systems like barcoding, examining physical layouts, conducting audits, and benchmarking performance.

• Three proven methods for improving order accuracy are a push for quality improvements, top management interest in best practices, and customer requirements/pressure according to a WERC study. Maintaining high order accuracy is a top priority for logistics managers.

Here is a summary of key points about virtual warehousing:

• Third-party logistics providers like Global Sports offer virtual warehousing services, where they handle inventory storage, order fulfillment, and customer service on behalf of online retailers. This allows retailers to avoid significant upfront costs and risks of managing their own warehousing operations.

• CommerceHub provides a virtual warehousing solution for iQVC that automates communication between iQVC and its drop-ship vendors to manage the order fulfillment process from sale to delivery. This has substantially improved iQVC’s customer service.

• ANETorder.com serves as the “virtual shipping department” for e-tailers, focusing on backend order picking, packing and shipping so clients don’t have to handle those functions themselves.

• Companies can also use Internet-based software like Optum’s TradeStream solution to virtually eliminate on-site warehousing needs through networked inventory visibility and fulfillment across a supplier community. This can significantly reduce inventory levels and achieve full order fulfillment.

So in summary, virtual warehousing allows retailers to outsource the logistics of order fulfillment through 3PL partners or technology solutions. This reduces costs and risks while maintaining high customer service.

Here is a summary of the key points about distributors and customers from the passage:

• Invacare, a home health care equipment manufacturer, uses TradeStream software to provide visibility of inventory positions and order status across its enterprise, distributors, and customers. This allows direct replenishment programs to smooth demand volatility.

• Eliminating excess inventory sitting idle in warehouses benefits both manufacturers like Invacare and their customers.

• Ecampus.com integrated its online bookstore with its distribution network to ensure fast and efficient fulfillment to customers. inventory availability and shipping estimates are shown on the site.

• Ecampus.com’s cross-docking system allows it to turn incoming inventory into outgoing shipments within an hour, speeding up the process of getting items to customers.

• The early integration of Ecampus.com’s website with its distribution channel positions it well to adapt to marketplace changes compared to companies that don’t manage their own fulfillment.

• Proper consideration of distributors and customers is important when deciding whether and how to outsource reverse logistics functions.

So in summary, the passages discuss how manufacturers like Invacare and Ecampus.com work to provide visibility, integrate systems, and implement techniques to efficiently fulfill orders for and meet the needs of distributors and customers.

• Proper inventory slotting in a warehouse helps eliminate wasteful operator travel time and improves productivity. It arranges items in an optimal order and location for picking.

• Advantages include reduced labor, faster response times, fewer errors, safer working conditions, lower damages, tighter pallet loads, and deferred expansion needs.

• Developing an effective slotting strategy requires collecting data on item dimensions, volume, popularity, and other attributes. Items are then assigned to locations based on objectives like balancing workloads, minimizing distances, and increasing pick rates.

• Maintaining proper slotting over time is important as needs change. Tools can track current vs. optimal locations and help prioritize reslotting work.

• A conference highlighted emerging warehouse technologies like simulation software to test layouts and slotting approaches, and internet-connected systems providing global inventory visibility. This signals that warehouse management approaches are rapidly evolving.

Here are the key points about warehouse transformation and inventory reduction from the provided information:

• Traditional warehouses are transforming into dynamic distribution centers that function as profit centers through increased automation, information systems, and material handling technology.

• Distribution centers (DCs) have become the cornerstone of the supply chain, coordinating inventory levels, inbound/outbound logistics, value-added services, and responding to demand.

• Large retailers are establishing dedicated flow-through DCs as consolidation hubs to receive, mix, and consolidate merchandise from multiple suppliers efficiently.

• DCs need capabilities like cross-docking, automated sorting, break-pack, packing and kitting to support retailer requirements. They also handle returns which are higher in e-commerce.

• High-tech manufacturers move final assembly and configuration out of plants and into DCs to reduce costs and inventory through techniques like postponement where final configuration is delayed until order receipt.

• Sophisticated warehouse operations are reducing inventory through restructuring, technology adoption, and dynamic distribution capabilities that speed inventory flow while adding value.

• Advanced voice-based technology is being introduced into warehouse operations to improve productivity, reduce costs, and increase accuracy. Speech systems can replace manual picking processes.

• Systems use wireless wearable computers with speech recognition, voice browsers, and voice applications to provide hands-free, eyes-free operation for workers.

• Speech systems now work well in noisy warehouse environments and can accommodate different languages/accents. Training is quick.

• Systems are available in speaker-dependent (trained to a single user) or speaker-independent modes, with discreet or continuous voice options.

• WMS vendors are integrating speech interfaces to allow full voice-driven warehouse workflows. Examples given are OMI integrating with Voxware’s system, and Catalyst incorporating SyVox speech applications.

• Factors to consider in selecting a speech solution include vocabulary needs, noise levels, equipment ruggedness, integration needs, and future requirements. Careful needs assessment is advised to match capabilities.

• Speech-based systems can improve warehouse productivity by slicing seconds off each picking selection and allowing 99.9% accuracy rates by eliminating incorrect picks. They also decrease maintenance costs by eliminating dedicated label printers and handheld devices.

• Labor productivity increases as workers hear their next location upon confirming the last pick. Locations are verified by workers reading a randomly assigned check digit.

• U.S. Foodservice is piloting the VoiceLogistics suite in one warehouse and plans to expand to six more, to increase order picking accuracy, boost productivity, and eliminate data entry of weights and order statuses.

• Canon U.S.A. successfully implemented a warehouse management system (WMS) to improve its inventory management. Key aspects of its project included establishing clear objectives, selecting a qualified project team, conducting a thorough vendor selection process, and providing comprehensive training.

• Bakery Crafts improved its inventory accuracy by replacing its paper-based replenishment system with a bar code-driven WMS after several expansions increased the need for better inventory management tools.

• The company, Bakery Crafts, expanded its facility and warehouse capacity significantly two years prior, which placed pressure on warehouse operations and inventory management.

• Previously, Bakery Crafts used an outdated manual/hand-written inventory system that resulted in inaccurate inventory data (only 50-60% accurate). It required significant clerical work to maintain.

• Operator productivity in the warehouse was low due to the time-consuming manual replenishment process.

• The company implemented a new RT Locator warehouse management system from RT Systems. This included RF handheld terminals, barcoding of all items and locations, and integration with the company’s UNIX network.

• The new system provided real-time inventory accuracy, automatic pick list generation, cross-docking capabilities, and tracking of all inventory movements throughout the warehouse.

• Benefits included reducing the time for annual physical inventory counts from 2 weeks to just 6 hours, quicker training of new operators, and improved inventory accuracy.

• Respondents reported significant cost savings by enhancing logistics practices, with one company reducing total order costs by 50% compared to the previous year through improvements in material handling, receiving, inventory control and shipping.

• Implementing advanced planning and shipping systems, reengineering order processes, and strategic partnerships helped one company improve order management costs by 1.5%, increase on-time delivery to 95%, and improve supplier on-time delivery to 93%, ultimately increasing customer on-time delivery to the high 90s.

• Dedicated shipping software greatly improved freight/transportation cost reductions and carrier negotiations/selection, as well as overall logistics department efficiency through forecasting and balancing workforce needs to meet shipping schedules and customer dates.

• Distribution software packages helped control inventory levels, reduce obsolescence/damage/pilferage, and monitor supplier performance through scenario planning.

• Networks were more easily managed through tools like the Internet, intranet, EDI, and location modeling software.

• Exceeding customer service levels was a top concern for supervisors, and managers addressed this through improved communications, empowering employees, process improvements, and benchmarking against industry standards.

• The most significant cost reductions came from warehouse storage/inventory costs, inventory carrying costs, and international logistics costs through strategies like consolidation, space evaluation, turning inventory faster, and JIT delivery.

• Managing Logistics surveyed logistics professionals about outsourcing trends over the past year. Around 18% reported outsourcing various logistics activities as a way to control costs. Industrial manufacturing sectors reported the highest rate of outsourcing at 20%.

• Common activities being outsourced included transportation, warehousing, forecasting and planning. Examples given showed outsourcing resulting in savings ranging from $27 million to $35,000 on various activities.

• Ocean shipping rates have risen, prompting logistics managers to negotiate rates like with trucking carriers. This has yielded $3/ton and other significant savings. Volume commitments have also discounted rates by 5-10%.

• Heineken USA won a best in logistics award for developing innovative internal systems focused on cost-effective service and supply chain improvement. Key changes included improved distributor communication/forecasting and automating manual processes. Benefits included being more responsive and reducing lead times.

Here is a summary of key points about improving logistics operations from the provided text:

• Using web-based tracking software allows companies to have visibility into inventory locations and statuses throughout the shipping process from origin to destination. This reduces delays and saves money from lost inventory.

• Supply chain modeling and simulation software helps companies analyze their operations, identify areas for improvement, and optimize configurations like make-vs-buy decisions and facility locations.

• Establishing online order tracking capabilities empowers customers to check order statuses themselves rather than calling customer service. This saves companies money by reducing call volumes.

• Reverse logistics software helps companies efficiently process returned and damaged goods by integrating return data across the supply chain for reporting.

• Upgraded warehouse management systems and automation like automated storage and retrieval systems (ASRS) improve control, efficiency and flexibility of warehouse operations.

• Fleet management technology utilizes vehicle tracking and communication to optimize routing, ensure regulatory compliance, automate payroll, and improve customer service and operations for transportation fleets.

So in summary, the key is using technology and data visibility/integration to optimize operations, empower customers, comply with regulations, and find cost savings throughout the supply chain and logistics network.

Sugar Foods is implementing a new transportation management system and outbound transportation execution system to optimize its transportation planning and operations simultaneously. This will allow the company to better meet the service and cost objectives of its highly competitive industry. The system is expected to fully optimize both service and cost for the company. Vice President Jim Walsh said the system should meet the needs of the competitive food industry.

Key capabilities of the system include enhanced trailer tracking functionality. This will allow Sugar Foods to better manage trailer productivity and efficiency by directly linking trailer location and status data to its fleet management and logistics systems via satellite. This is expected to improve trailer productivity and provide better customer service. Overall, the new systems aim to optimize Sugar Foods’ transportation operations and plans to remain competitive in its industry.

• Coca-Cola Company (CCE) will use the Nistevo.com network to deliver beverages to its distribution centers. This is aimed at reducing expenses, cycle times, and inventory levels by increasing visibility through the supply chain.

• CCE believes it will gain real-time visibility for forecasting shipping needs using Nistevevo.com’s contract management, exchange, and execution systems. This will allow CCE to manage contracts online, share capacity to improve asset utilization, and track in-transit goods.

• Mike McNally, CCE’s VP of operations planning and development, says this will help CCE continually strive to improve its distribution system by using solutions that benefit its entire supply chain network.

Here are the key points about processes and tools from the passages:

• A compact disc manufacturer improved customer on-time delivery by implementing an automated replenishment system, reengineering order management processes, and pursuing strategic partnerships. This resulted in lower order management costs, higher schedule achievement, and better supplier on-time delivery.

• A New Jersey company instituted a new order fulfillment system into some of its distribution centers. This reduced headcount by 10% by increasing the service levels and cutoff time for shipping orders.

• LearningExpress.com, an online toy retailer, sought to make its online order fulfillment as efficient as its in-store fulfillment through an automated fulfillment solution.

• Several companies discussed how supply chain management software helped streamline order fulfillment, improve customer responsiveness, and facilitate supplier collaboration by enabling better inventory forecasting, replenishment, and integration along the supply chain.

• Access to third-party logistics providers was generally not considered very important by logistics managers, except at very large companies or higher executive levels. Customer and internal integration were seen as more important for performance.

So in summary, the passages discussed how companies implemented automated systems, reengineered processes, and used supply chain software to improve order fulfillment, collaboration, and overall supply chain performance.

Here is a summary of the key points from the provided article:

• Consulting firm Herbert W. Davis recommends 10 ways to reduce customer service costs, such as documenting correct transaction methods, examining document retention needs, reviewing and improving functional areas, monitoring workloads and staffing accordingly, implementing telephone routing/monitoring systems, eliminating handwritten notes, improving product availability, consolidating offices, training employees, and evaluating outsourcing.

• Contact information is provided for Herbert W. Davis consulting firm.

• The article discusses new logistics software applications from Neopost Logistics Systems and survey results from Datamonitor on slow uptake of internet-based supply chain by European organizations.

• A list of transport and logistics exchange websites is provided that can help reduce freight costs and improve transportation planning.

• A University of Tennessee study identified factors like common interest, openness, cooperation that enable collaboration in the supply chain. Benefits included reduced inventory and costs.

• Transportation.com launched a classifieds section for equipment buying and selling at users’ request.

• A Michigan State study found no clear link between superior logistics and competitive advantage alone.

• The article offers tips for supply chain managers to evaluate suppliers beyond cost and employ technology to improve partnerships.

• Industrial Data & Information released an enhanced request for information and proposal product with more detailed questions for warehouse management systems.

• A Zona Virtual Logistics study found mixed views on the importance of real-time supply chain monitoring solutions.

• Herbert W. Davis provides 10 recommendations for reducing inventory costs, such as identifying obsolete inventory and adjusting safety stock levels.

• A Lucas Group study found that hiring decisions are made much faster now compared to 5 years ago, within 6 weeks rather than 3 months.

• ShipXact.com introduced a new tracking system to provide real-time shipment visibility across their fulfillment network.

• SupplyWorks unveiled the CounterPart partner program to bring high-quality e-procurement solutions to customers as part of its Total Supply Management (TSM) solution. CounterPart involves four types of partner relationships to help customers manage supplier relationships collaboratively.

• A new resource from WERC benchmarks compensation levels for seven key warehousing positions like forklift operator and order picker.

• Forrester Research reports that global e-commerce will disrupt today’s supply chains, forcing manufacturers and shippers to create an information pipeline on the internet to improve efficiency. Companies will need to participate in e-business networks for real-time cooperation.

• CLM case studies are now available exclusively online by downloading from their website.

• A new report found that enterprises focus on cost savings over linking to B2B exchanges when implementing e-supply chain management.

• A new logistics guide profiles over 130 company websites and grades them on their solutions.

• A joint venture was formed between two security groups to develop technology to combat billions lost annually to cargo crime internationally.

Here are the key points from the summaries:

• Newgistics, R.R. Donnelley Logistics Services, and USF Processors have formed an alliance called ReturnValet to offer direct-to-consumer merchants a returns management network that provides instant credit for returns and in-person customer service at local stores.

• Cahners In-Stat Group believes virtual supply chain integration (V-SCI) networks will create new levels of interaction between supply chain participants through wireless technologies.

• IBM formed an alliance with Mincom to deliver enterprise asset management solutions to transportation companies.

• Fiera.com created a subsidiary called eLogistics Management to provide logistics services for Latin America.

• A survey found CEOs cite customer service improvements as the top supply chain challenge.

• BetterManagement.com launched the Supply Chain Authority information portal.

• Logistics.com and QuoteShip.com merged to offer comprehensive transportation services globally.

• Optum launched a new application called TradeStream for visibility, inventory, and collaboration across companies.

• WorldChain launched its first supply chain management software for small and mid-size companies.

• SyVox partnered with Warehouse Equipment to offer speech-directed picking solutions.

• Global Logistics Technologies partnered with Gap Gemini Ernst & Young to market and implement logistics software.

• E-genco and Electron Economy created an end-to-end online returns processing solution.

• Schneider National plans to spin off its logistics business as a separate company.

• Eflatbed.com was launched as an online source for the flatbed trucking industry.

• ReturnCentral.com offers web-based returns management software.

• Tompkins Press released a book that moves beyond traditional supply chain management.

Here are the key points about Supply Chain Synthesis from the passage:

• Supply Chain Synthesis is a concept explained by author James A. Tompkins that describes how all partners in a synthesized supply chain can gain greater cash flow, increase output, and reduce inventories.

• According to Tompkins, Supply Chain Synthesis allows partners to coordinate their operations more closely and gain efficiencies.

• Tompkins’ book on Supply Chain Synthesis is available for purchase from his company Tompkins Associates for $24.95 USD, $34.95 CAD, or £15.95 GBP. Orders can be placed by contacting the provided phone number or email.

So in summary, Supply Chain Synthesis is a concept that advocates for closer coordination and integration between supply chain partners in order to increase output, cash flow, and efficiency while reducing inventories through gainsharing. The book explaining this concept can be purchased from Tompkins Associates.

• Roadway offers an online shipping service called myroadway.com that allows customers to get shipping rates and track shipments. Customers sign up on the site to access these tools.

• Logility offers a collaborative commerce solution called XES that allows customers, suppliers, and transportation providers to collaborate online regarding supply chain activities like order tracking, load tendering, and freight order entry.

• Inter-World Corp. and Descartes Systems Group are partnering to provide an e-commerce solution for online retailers, brick-and-mortar retailers, distributors, and manufacturers to manage online ordering, fulfillment, payment and delivery processes.

• The Logistics Foundation of America has been formed by the merger of the Georgia Freight Bureau and the American Society of Transportation and Logistics, to provide continuing education programs in logistics and transportation.

• Schneider Logistics is partnering with online used equipment marketplace iMark.com to provide shipping services for buyers and sellers on the site, including online rates and shipment tracking.

• HK Systems has released new supply chain management software that can help companies handle high volumes of parcel and LTL shipments within time windows.

• CommerceQuest offers an Internet-based service called EnableNet that lets businesses electronically connect to US Customs to exchange import/export data.

• QRS Corp offers a Web-based logistics management service that allows shippers to communicate with carriers via EDI over the Internet, including load tracking and reports on carrier performance.

Here is a summary of the key points from the passages:

• Landstar System has introduced an online freight information service called EFr8.com that uses push technology to provide customized search alerts and deliver results to users via various channels.

• Emery Worldwide offers consulting services for companies immersed in customs compliance issues.

• An article discusses the different approaches companies can take to supply chain management, including functional, procurement, logistics/transportation, effectiveness, information, process reengineering, and strategic views.

• Cysive and Hub Group launched an e-business system called the Vendor Interface to manage the drayage portion of intermodal shipments.

• CommercialWare and Manhattan Associates partnered to provide an e-fulfillment solution for retailers, e-tailers and direct marketers.

• Pacer International expanded its logistics operations through a merger with Conex Global Logistics Services.

• E-Sync Networks released its TotalChain end-to-end web supply chain solution.

• An online auction platform called TradingDyn is expected to reduce freight costs for shippers and carriers.

• A tutorial provides guidance on processes and requirements for importing and exporting.

• The American Export Register/China directory connects exporters in the US to potential customers in China.

• Airlines on the Web provides links to 50 air cargo carriers and related sites.

• Information on ComPair Global Schedules is now available online, including carrier and port schedules.

• 3RDWAVE import/export software from Blinco Systems manages international distribution and is bilingual in English and Spanish.

• Advanced planning and scheduling systems can help reduce inventory needs according to an analyst from AMR Research.

The article discusses several new logistics products, services and trends:

1. APL introduced a customizable website called HomePort that allows customers to track shipments and manage container transactions.

2. Accenture launched a diagnostic tool called Supply Chain Value Assessment that helps companies evaluate supply chain issues.

3. Guidelines were established for safer usage of pallets and containers to help owners recover proprietary assets.

4. The WERC published a catalog of educational publications and research reports on topics like warehouse costs and barcodes.

5. Yellow Freight improved their website capabilities to allow customers to track shipments and arrange pickups online.

6. CLM announced an employment clearinghouse service to help logistics managers find jobs.

7. A survey found that European logisticians face similar challenges to their American counterparts regarding technologies like EDI and supply chain management.

8. An article discussed steps companies can take to integrate supply chains after a merger or acquisition.

9. Many manufacturers’ supply chains were found to lag in importance and rated only average in performance.

10. A consortium led by EDS developed a system to strengthen supply chain ties for small companies pursuing build-to-order strategies.

• Baan announced its new E-Enterprise suite of Web-enabled supply chain applications called Baan E-Sales, Baan E-Collaboration, and Baan E-Procurement. Pricing is $25,000 for E-Sales and E-Collaboration for up to 25 users, and $1,000 per user for E-Procurement.

• A study from Distribution/Computer Expo West found that 73% of attendees worked in distribution, transportation, warehousing or logistics roles, and 20% had annual logistics software/systems budgets over $250,000.

• Efficient Market Services and Syncra Software formed a partnership where EMS will market and sell Syncra’s supply chain collaboration software Syncra CT alongside its StoreView forecasting system.

• Yellow Freight introduced a new guaranteed delivery service called Definite Delivery with proactive monitoring and notification.

• A report from NAW explored how continuous replenishment programs and e-commerce will transform supply chains through more collaboration and new roles.

• An article outlined 7 steps toward strategic supply chain management involving suppliers, customers, and electronic systems.

• Industri-Matematik launched fulfillment software called Vivaldi promising zero inventory and 100% visibility across complex supply chains.

• Customs revamped its website for easier access to rulings and regulations.

• A video on proper pallet guidelines was released to prevent improper loading and handling.

• CT Logistics upgraded its freight billing and audit software FreitRater to version 4.5 with Y2K compliance.

• Reports were available from the Supply Chain Excellence Catalogue on various supply chain topics.

• QUALCOMM and ORBCOMM agreed to offer a satellite-based trailer tracking system.

• Benchmarking of supply chain management is now available online through a new subsidiary called the Performance Measurement Group.

• CAPS Logistics released RoutePro Replenisher software to optimize inventory replenishment routes.

• CAPS Logistics has released BidPro software to help shippers organize transportation requirements, evaluate carrier bids, and select the most cost-effective bids. It aims to optimize routing and cut costs.

• RPS has launched Multiship and Quickship software packages to automate shipping management for large and small shippers respectively. Features include address databases, rating/processing packages, labels, tracing, and reports.

• Worldtariff provides a price catalog with worldwide duty and tax information for importers. It is organized by industry and offers subscription access online, by CD-ROM or binder.

• A third-party logistics provider should be evaluated based on criteria like integrated services, technology, track record, customized solutions, quality standards, and commitment to success.

• The Logistics Management Center offers a certification program in logistics and supply chain management through practical courses. Completing nine courses leads to the CLMP designation.

• Provia Software is confident that its end-to-end supply chain software package will help it better market its product and execute supply chain strategies for logistics customers.

• Prophesy Transportation Software is offering free online transportation services via its website eProphesy.com, including load matching, driver recruitment, and logistics directories.

• A new Commerce Department website called Snap allows exporters to apply for licenses electronically for free, aiming to cut 10-15 days off the licensing process.

• Roadway Express has expanded its two-day transportation service between Cincinnati and cities in Maryland, Virginia, Delaware.

• New summaries of reports find strong growth predicted in supply chain management and ERP software markets in coming years.

Here is a summary of the key points about new logistics products and services from the passage:

• TimeKeeper has changed its name to TimeKeeper Air and now offers air cargo and premium emergency shipment services through strategic airline partnerships.

• ABF has been piloting TimeKeeper Air services and quotes are available through their website or phone number. Long-term agreements are also available.

• American Freightways has expanded service to directly serve all points in North and South Dakota, opening 6 new customer centers to provide in-state and regional service to shippers in those areas.

• Customs and Census have published the final rules for the Automated Export System (AES) which define the export filing requirements and options.

• J.B. Hunt has separated their ground and intermodal transportation into distinct business units to improve truck operating ratios and driver recruitment/retention.

• GeoLogistics Americas plans to devote resources to international logistics and offer global products and services through an end-to-end multimodal system and global IT system.

• The Anderson School at UCLA and Hewlett-Packard created the first supply chain management excellence award.

• VIT developed a quick-start program called SeeChain NOW! for SAP customers to measure and monitor supply chain performance across systems.

• GATX formed a new integrated solutions group combining operating companies to provide supply chain and logistics solutions optimizing transportation and distribution systems.

• McHugh Software launched a new website as an information resource for the logistics community on products, services, and industry reports.

• CN launched a road-rail dual mode equipment service between Toronto and Montreal to compete with over-the-road transport in medium-length corridors.

• Foundation Technology Services offers a workshop on capitalizing supply chain strategies and compiled recommendations for enhancing supply chain success.

• The Warehouse Management Handbook from Tompkins Associates provides information on warehouse control systems, personnel planning, transportation modes, and technology solutions.

• The NTE will work with SAP to deliver a transportation execution process improving logistics management and supply chain agility on the mySAP.com marketplace.

• American Software now offers a supplier performance data mart to provide supply chain business intelligence and analysis capabilities for better supplier selection and decisions.

• Edison Group has expanded their supply chain practice to help clients leverage technology and collaboration to extend their supply chains.

• Processors Unlimited, a USFreightways logistics subsidiary, changed their name to signify unity across the organization’s logistics operations.

• USF Processors consolidated its companies under one name to better position itself to serve cross-industry customers. The new name better reflects its expanded capabilities in logistics and transportation.

• A report from IDC forecasts that the EDI market will reach maturity within 5 years as revenues near $2.3 billion by 2003. The internet will account for 41% of EDI transactions during this period and transform the industry.

• Eventus Logistics launched a new internet-based collaborative planning browser called Demand Partner to connect organizations with trading partners for improved demand visibility and communication.

• SAP and FDX will offer an integrated supply chain logistics suite combining SAP’s planning software with FDX’s logistics execution systems to automate goods movement from suppliers to customers.

• Oracle and UPS will team up to create an integrated shipping management system combining UPS online tools with Oracle ERP to improve supply chain visibility.

• A new family of electronic cargo seals was developed with features like remote reading, tamper evidence, and tracking multiple seals from a distance.

• KLM Cargo and TCP developed a door-to-door climate controlled pharmaceutical shipping service with money back guarantees and no dry ice hazards.

Here is a one paragraph summary:

Inventory reduction remains a top priority for many companies according to industry experts. Effective strategies discussed at APICS forums include focusing on inventory tracking accuracy to support visibility throughout the supply chain, implementing multi-level cycle counting programs to continuously investigate and address root causes of inventory record errors, and applying the postponement principle to delay final manufacturing and packaging steps until products reach distribution centers in order to reduce finished goods inventories across the supply chain. These approaches aim to significantly cut excess inventory levels while maintaining customer service.

• Delayed manufacturing, also called postponement, can help companies with a modular product portfolio assemble different finished goods from a small number of common components. This reduces total supply chain costs.

• Key factors that determine the stability of a delayed manufacturing strategy include customer lead time requirements, ability to accurately forecast demand, and order fulfillment lead times. It also impacts distribution network design.

• Synchronized supply chain operations aim to maximize throughput and profits by maintaining some inventory at every stage and balancing inventory levels based on demand cycles, typically daily. This approach requires coordination between all partners.

• Taking a synchronized approach means inventory levels at each stage and in transit will fluctuate inversely with demand, keeping total inventory in the supply chain constant. Eliminating unnecessary stages can reduce total inventory needs.

• Implementing synchronized operations first requires building enough starting inventory at each stage to support initial throughput levels. Ongoing inventory management then focuses on first-in, first-out practices.

• PDCs are warehouses that stock plug components to replenish field inventory quickly and meet short lead time demand.

• The PDCs were initially profiled to hold 15 days of stock on hand for all items, with a 3-day replenishment time from central stock. This allowed for 12 days of safety stock per item.

• The PDCs were reprofiled to target 99% unit fill rate based on demand patterns, variability, replenishment cycles, and supply variability. Only demand with a lead time of 3 days or less would be filled from PDCs.

• Order cycles were analyzed and shortened for some fast-moving items to increase service levels without increasing inventory. This included weekly ordering for top items rather than monthly.

• The changes aimed to better align inventory levels at PDCs with actual demand patterns and replenishment capabilities, in order to increase service levels with existing or reduced inventory.

• Welch’s uses large refrigerated tanks to store grape crops year-round for producing jams, jellies, concentrate, and bottled juice.

• It has cost accounting and MRP systems to calculate monthly grape juice requirements and schedule production. However, these systems assume infinite capacity and do not optimize costs or consider operational constraints.

• A third model was developed that draws data from the cost accounting system but works independently to calculate optimal recipes and scheduling based on costs and operational constraints.

• When the third model completes its calculations, the optimal recipes and schedules are input back into the cost accounting and MRP systems.

• This improved approach saved Welch’s $130,000-$170,000 in reduced inventory costs in the first year by finding a more optimal production plan that considered real-world constraints.

• Kanban planning can be used in both repetitive and hybrid manufacturing environments. In repetitive environments, all parts are treated as kanban parts. In hybrid environments, component parts and intermediate subassemblies can be identified as either kanban or unique items.

• All kanban items are planned and stocked using a two-bin system at the consuming work cell. Unique items are stocked in stores and kitted as needed for work orders.

• Kanban execution uses line schedules in repetitive environments and work orders in hybrid environments. Unique work orders for customer orders are processed similar to traditional work orders, but only unique components are kitted and transferred from stores.

• Kanban work orders are initiated on the shop floor when a using cell consumes repetitive subassemblies from a bin. The supplying cell replenishes the bin using small lot production. As lower-level kanban parts are consumed, they are replenished from stores or suppliers using JIT pull.

• Control systems include multi-store inventory control, cycle counting, order tracking, and production monitoring integrated with backflush and performance measurement. Repetitive environments use wall-to-wall or two-store inventory systems, while hybrid uses multi-store.

• Kanban is not a substitute for planning but a way to execute the production plan through material replenishment signals between work cells.

• The passage discusses applying cross-docking procedures in manufacturing operations, not just distribution centers. This can provide advantages like reduced finished goods inventory, increased response, reduced storage space/equipment, and reduced handling.

• There are challenges to cross-docking in manufacturing like inability to hold products for quality testing, reduced ability to level peaks in production, products may need to age before shipping requiring process modification, and production scheduling may require more cleaning.

• The passage outlines different types of cross-docking: continuous movement, distributed case movement, and consolidated movement.

• A study identified key factors driving improved inventory turns, like use of better software/inventory tools, reduced lead times, improved forecasting, supply chain management principles, and more inventory management attention.

• The study also identified factors positively changing like increased EDI usage, improved supply chain coordination, increased cross-docking use, and reduced order cycle times. Top management intervention in inventory reduction was most frequently cited as affecting inventory turnover changes.

The passage discusses management’s emphasis on reducing inventories and how it relates to firm performance. Firms whose inventory turns decreased paid less attention to inventory reduction compared to firms whose turns increased.

The most significant factor affecting inventory turnover was found to be top management’s emphasis on inventory reduction. Nearly 20% of respondents cited this as the most important factor. Other important factors included number of SKUs, forecast accuracy, use of inventory management software, and supply chain coordination.

Firms that placed more priority on inventory reduction through management emphasis were able to better increase their inventory turns compared to firms that placed less priority on reduction. Management priority appears critical for effectively reducing inventory levels and improving related turnover metrics.

The complete underlying research study is available for purchase from the Warehousing Education and Resource Council (WERC). Their contact information is provided.

• SEMC adopted a pull/flow manufacturing system to replace their previous MRP II push system. The pull system reduced manufacturing cycle times from over 20 days to around 10 days currently.

• WIP (work-in-process) inventory was reduced by 55% after implementing the pull system. Some of the savings from reduced WIP was converted to increased raw materials inventory to improve responsiveness.

• SEMC is looking into integrating pull scheduling software throughout their business processes.

• Flow-through warehouses use processes like cross-docking and sortation to minimize handling, decrease storage costs, reduce damages/obsolescence, and lower inventory levels while improving customer service.

• Effective flow-through requires close collaboration with suppliers for things like advance shipping notices, barcoding, and verification during receiving.

• A flow-through system uses radio frequency technology and barcoding for fast putaway/sorting to customer orders or shipping. This improves inventory accuracy.

• The use of flow-through distribution, including cross-docking and sortation, is expected to grow significantly over the next decade as companies seek greater efficiencies.

• Barter companies agree to restrictions on product distribution to avoid disrupting a company’s existing market channels and distribution agreements. Products will not be distributed in areas where the company already has licensing or distribution deals. End users also sign non-diversion contracts barring resale.

• Barter companies are attracting more smaller and mid-sized clients, handling transactions as small as $500,000, compared to typical past transactions of $50-100 million.

• Barter companies can offer clients a broad array of products and services across major expenditure categories through their multilateral trading, aiming to offset client costs in key areas.

• The article examines the use of automatic replenishment programs (ARPs) like Vendor Managed Inventory (VMI) and Continuous Replenishment Planning (CRP) for inventory management.

• VMI is the most commonly used type of ARP, according to a survey of logistics managers. Nearly half of respondents use VMI.

• While ARPs have been in use for an average of 4.5 years, full implementation has yet to be achieved for most companies. Electronic data interchange and cross-functional teams are the most implemented components.

• Respondents said their information systems are strongest in providing daily download of information and having accurate and timely data. Connectivity and compatibility need more improvement.

• Managers claim ARPs have been highly effective in improving customer service, reducing stockouts, and improving delivery reliability. Goals around reduced inventory, costs and handling have also been achieved to a large extent.

• In summary, the article finds that while ARPs like VMI show promise, more work is still needed for full implementation. But managers report success in achieving key goals around customer service and inventory management.

• ARPs led to fewer stockouts (5.33 rating), improved delivery reliability (5.15 rating), and faster inventory turns (4.94 rating). Reducing the need to discount product (3.96 rating) was the least successful area.

• IS capabilities are positively influenced by ARP implementation since ARPs rely on decision support systems, barcoding, and EDI.

• ARP effectiveness is positively influenced by strong program implementation and IS capabilities since inventory management relies on timely information.

• ARP performance is positively influenced by ARP effectiveness since satisfied customers rely on being able to get products in stock. This addresses concerns with faster deliveries and more tailored shipments.

• Involvement in ARPs is expected to yield benefits like increased sales, more frequent deliveries, higher shelf space productivity due to fewer stockouts, and less need for safety stock and backroom storage space. Safety stock can be dramatically reduced if not eliminated.

The passages discuss inventory management best practices that helped companies reduce lead times and inventory levels. Some key details:

• One company helped arrange to warehouse frequently used boxes near their plant. This cut lead times from 7 days to 1 day.

• Another company helped a film supplier arrange to warehouse film near their plant. They now work out of the supplier’s warehouse and lead time is down to minutes.

• Periodic inventory reviews, tighter management of usage rates/lead times/safety stocks, reducing safety stock, and cycle counting are often cited as top inventory reduction best practices.

• Companies have found success reducing safety stock levels through better accuracy, application of technology, and increased collaboration. Safety stock reduction saw a large increase as a practiced cited by respondents.

• Cycle counting has become a major best practice, largely replacing annual physical inventories. It is especially popular among small-mid sized companies.

• Applying the ABC (Pareto’s law) approach to prioritize inventory has moved into the top five practices.

• Technology-based practices like barcoding, RFID, and VMI are being adopted more but still lag the top practices.

• Respondents said periodic reviews are effective as they start the process of improving communication and implementing additional practices to further reduce inventory.

Here are the key points summarized from the passages:

• A small telephone equipment producer has switched to using third party logistics to improve visibility, order closer to forecasts, consolidate inventory, and cut lead times. However, they cannot fully pursue a JIT approach due to the nature of their business.

• A major fluid systems components producer created a logistics department, which allowed them to centralize carriers and save millions through improved transportation instead of actual inventory. This reduced WIP inventory.

• A midsize automotive lighting systems producer implemented kanban to regulate packaging material flow with production. This eliminated excess inventory and reduced risks and costs.

• A large automotive aftermarket products distributor periodically reviews inventory, focusing on slow-moving items. They identify excess inventory and coordinate returns/disposals, resulting in a 30% reduction year-to-date.

• A small frozen food producer implemented forward cycle counting based on production schedules to generate supply needs reports. This improved inventory control.

• Several companies summarized various inventory reduction efforts like classifying inventory, moving inventory responsibilities to production, installing automated systems, and adopting lean manufacturing techniques like synchronous flow. Periodic inventory reviews were commonly used to identify opportunities.

Several companies discussed conducting regular inventory reviews involving different departments. This cross-functional approach allows them to identify excess, obsolete, low-turning inventory and determine strategies to reduce inventory levels. Reviews focus on top items making up the bulk of inventory value and activity. Periodic reviews help establish optimal reorder points and order quantities. Some benefits mentioned include reducing inventory by 15-30% in the first year, freeing up warehouse space, lowering carrying costs, and improving supply chain communication and internal processes like production planning. Regular monitoring of inventory metrics like turns and days on hand helps companies continuously refine their inventory management strategies.

Here is a summary of the key points about inventory management from the provided text:

• Inventory reviews help reduce excess inventory, improve fill rates from vendors, and establish consignment programs. They can also help reduce lead times by working with suppliers to identify reduction opportunities.

• Monthly inventory reviews paired with accountability have significantly reduced cash flow cycle times and impacted the bottom line at one large chemicals facility.

• Cycle counting is a top inventory management practice that improves inventory record accuracy while also being an effective inventory reduction tool. It is frequently cited as a successful technique in surveys.

• Examples provided highlight how cycle counting practices have reduced plus/minus errors, driven inventory accuracy upwards of 90-98%, improved service levels, increased awareness of inventory issues, and reduced safety stock needs. Cycle counting is used strategically by item, location, activity level, and other criteria.

• Shifting inventory ownership to suppliers and introducing kanban systems are other best practices highlighted for reducing inventory levels and investment risks. Enhancing cycle counting procedures by item classification is also discussed.

So in summary, the key themes are how inventory reviews, cycle counting, and shifting practices like kanban have helped organizations reduce excess inventory, improve accuracy, lower costs, and enhance customer service. Accountability and strategic application of techniques are emphasized.

• The inventory control coordinator at a communications equipment company implemented the ABC classification system combined with cycle counting to reduce inventory and eliminate biannual physical counts. Preliminary results show increased inventory record accuracy leading to lower inventory requirements.

• A vice president at a small milling operation introduced vendor managed inventory (VMI) where suppliers manage and replenish critical materials. This enables maximizing run schedules and equipment usage while also benefiting suppliers with better inventory control and production efficiency.

• A logistics manager at a door manufacturer credited vendor managed inventory with saving hundreds of thousands in inventory carrying costs.

• A purchasing manager at a manufacturer entered into consignment inventory agreements with seven suppliers. After an education program, storing inventory this way has credited over $1 million to inventory in a year and a half.

• An inventory manager at an automotive supplier implemented just-in-time (JIT) buying successfully by having suppliers ship materials on a pull signal when needed to keep inventory at predetermined levels.

• A retail home furnishings company implemented forecasting and distribution requirements planning software. Within four months inventory decreased by $1.6 million with no impact on customer service.

• A cigarette company inventory supervisor focused on reducing damage and theft by routinely inspecting storage and loading areas to identify hazards and improve procedures like stacking and binding.

• Many companies reported using RFID technology to track inventory in real-time, eliminate physical inventories, reduce machine downtime, and increase accuracy. One example saw accuracy improve to 99.2%.

• One company installed RF terminals on forklifts to provide live inventory tracking from production to shipping.

• Another company automated the planning parameter input process in Mexico which standardized forecasts, order quantities, safety stock, etc. This improved inventory turns by 50% while maintaining service levels.

• Implementing an ERP system allowed one mid-sized manufacturer to better plan finished goods and component inventories. It tied all their systems together for easier upgrades.

• Purchasing professionals are focusing more on inventory management and driving inventory reductions. Common techniques include shifting inventory ownership to suppliers to reduce on-hand stock. Information sharing with suppliers also improves communications and performance.

• Benefits of supplier partnerships include building stronger supply chains, shortening lead times, reducing storage needs, improving cash flow, and establishing consignment inventory agreements.

• Other successful inventory reduction tactics include implementing kanban systems, expanding external kanbans with suppliers, and leveraging electronic replenishment technologies.

• The company’s new procedures reduced monthly purchase orders from 5,000 to less than 2,000 through improved control of bills of materials, engineering changes, and inventory management. This required excellent control over these areas.

• The speaker said implementing an auto-replenishment system that places the burden of inventory on the supplier for delivery took care of the remaining inventory management challenges. This increased inventory turns dramatically on 150 of the 300 parts assigned to auto-replenishment.

• In addition, reducing the supplier base enabled the company to bring suppliers into a just-in-time process that is reducing inventories carried at a 28% cost rate.

So in summary, the company improved inventory management and reduced inventory levels by implementing new procedures, auto-replenishment systems, reducing suppliers, and bringing suppliers into a JIT process. This required excellent control over bills of materials, engineering changes, and inventory while placing more responsibility on suppliers.

• The CFO of a small promotional merchandise maker has improved inventory management practices. Inventory is now one-third of the previous year’s amount and inventory turns have doubled to eight over two years. They track and report inventory by individual buyer.

• Similarly, a materials manager at a midsize manufacturer instituted periodic reviews to reduce inventory. Focusing on tightening usage rates and lead times reduced inventory by $150,000.

• The director of strategic planning and inventory at a large publishing organization forms inventory project teams and provides quarterly management reviews to maintain management interest in limiting inventories.

• Tracking performance by individual buyer allows for more accountability and visibility into inventory levels and reductions. Regular management updates and reviews help sustain focus on inventory improvement initiatives. Focusing on usage rates, lead times, and individual accountability can significantly reduce excess inventory levels.

• The company had an object with over $2 million in already purchased parts in inventory. To deal with this, they are doing an item-by-item analysis based on extended cost to see if the parts can be used for other applications. This is still in the analysis phase.

• Removing the “emotion” from discarding obsolete inventory can help reduce excess stock. One company found training managers on the negative impacts of dead inventory helped them be more willing to return slow moving items to vendors.

• Introducing in-store processors that automatically record inventory counts and transmit data to headquarters helped eliminate manual data entry errors and overstock issues for one retailer.

• One company is phasing in write-offs of obsolete inventory still on the books but no longer in plants. By writing off $20,000 per week rather than all at once, it avoids a large one-time financial impact that management opposed.

• Conducting a critical review of field stock inventory allowed one company to slash excess spare parts levels by 35% by revising service policies and surplus criteria.

Here is a summary of the key points from the passage:

• Case Corporation has implemented various inventory reduction techniques to cut costs while maintaining customer service levels.

• They improve communications throughout the supply chain using electronic commerce and in-house supplier personnel. This helps reduce duplicate safety stock.

• They work to reduce supplier lead times, which have a direct impact on inventory levels. Lead times often consist of significant amounts of idle time.

• Case Corporation conducts lead time reduction projects with suppliers to identify waste and improve processes. This can cut lead times significantly.

• They use kanban systems internally and with key suppliers for items with more stable demand. This reduces inventory levels and costs.

• Overall, their techniques allow them to cut inventory levels and associated costs while still fulfilling customer orders on time through better supply chain management and optimization. Communication and collaboration with suppliers is a key part of their approach.

• The article discusses 10 recommendations for reducing inventory levels in a supply chain based on the advice of experts Mark S. Miller and Thomas M. Graddy.

• The recommendations include tracking and measuring lead times, negotiating shorter lead times, standardizing parts, reducing obsolete inventory, improving supplier quality, challenging minimum order quantities and price breaks, more frequent deliveries from suppliers, improving on-time delivery from suppliers, setting up a supplier-managed inventory program, and giving credit to involved parties for inventory reductions.

• A case study is presented of an electronics company supply chain that reduced inventory levels by applying the Supply Chain Operations Reference (SCOR) model. They analyzed planning processes and inventory levels at each stage and identified inefficiencies causing high inventory, like long planning cycles, overforecasting due to demand variability, and long interconnective lead times. implementing improvements based on the SCOR model analysis helped optimize the supply chain.

• The key takeaways are applying frameworks like SCOR to identify root causes of high inventory levels across a supply chain and implementing targeted improvements focused on processes, demand forecasting accuracy, supplier lead times and performance, and collaboration between parties.

• The company Hennessy Industries had significantly increased their inventory levels after relocating their factory from Chicago to Nashville. This was done to improve delivery performance but resulted in excess inventory.

• They set realistic goals to reduce inventory levels in each category (raw materials, WIP, finished goods) and established targets with a continuous improvement mindset.

• New tools like barcoding and tracking shipments helped improve visibility and customer service levels while reducing inventory.

• They found issues with their change management process, which was contributing to excess and obsolete inventory. Improving this process through education and meetings helped address this problem.

• Service parts management posed the biggest challenge due to the need to stock parts for 7 years after sales. Improved reporting and focus on excess parts helped reduce this inventory.

• Implementing kanban and point-of-use storage for raw materials, along with focusing on supplier relationships and lead times, further helped reduce inventory levels across the company. Overall, inventories were reduced by 44% while improving customer service.

• The article discusses two case studies of companies that achieved significant inventory reductions: ITT Automotive and Serengeti Eyewear.

• ITT Automotive switched to a repetitive manufacturing approach, which reduced setup times and lot sizes. This led to an 80% reduction in work-in-progress (WIP) inventory. Other benefits included improved WIP accuracy, on-time deliveries, shortened customer order times, and efficiency gains.

• Serengeti Eyewear acquired another eyewear company, which increased complexity and required a more sophisticated inventory management system. Issues included longer lead times, a larger number of SKUs, and a more diversified customer base. Serengeti implemented a Macola ERP system to gain visibility and control over its expanded international inventory and reduce excess inventory and backorders.

So in both cases, the companies were able to achieve significant inventory reductions by changing their production/planning approaches and implementing new inventory management systems tailored to their specific needs and business realities. This allowed for improved inventory accuracy, lead times, and overall operational efficiency.

• The company Serengeti uses the Macola enterprise resource planning (ERP) system to better manage inventory.

• With Macola, inventory levels have been reduced from 4 months to 6 weeks of inventory, freeing up $70 million in cash. Sales have also grown 10%.

• Macola provides improved visibility into inventory locations and amounts, reducing risks of double ordering. It enables available-to-promise functionality with customers.

• Training on Macola has improved planning and cost management. Processes for inventory, production, and scheduling have been streamlined.

• When a major customer increased demand by 55% above forecasts, Macola’s system functionality allowed Serengeti to adjust capacity across facilities to meet the increased demand, even with 4 month lead times.

• In summary, Macola has enabled Serengeti to significantly improve inventory management, planning, and responsiveness to customers.

• The article details how IBM conducted supply chain analysis studies for several business partners, including Pinacor and GE Capital. These studies helped identify opportunities to optimize product flows and balance service levels with lower inventory.

• Based on the success of these studies, IBM introduced a new supply chain analysis tool called Supply Chain Analyzer. This tool uses the same technologies and framework to enable companies to make strategic supply chain design and operational decisions.

• The article then discusses how International Game Technology (IGT) used the inventory quality ratio (IQR) technique to help reduce their over $50 million in inventory. IQR helped IGT identify and prioritize items with excess inventory to quickly reduce levels by $10 million before the fiscal year end.

• IGT expanded the use of IQR to all planners and additional inventory segments. This further helped reduce inventory while balancing service levels. IGT also began continuous improvement efforts focused on the highest impact parts each week.

• Through various IQR-guided steps like reviewing open orders, reworking materials, and adjusting supply chain management, IGT was able to further reduce inventory beyond the initial “low hanging fruit.”

• The article discusses Vermeer Manufacturing’s efforts to dramatically reduce inventory levels through a “lean” initiative.

• Key objectives included reducing raw material inventory by 50% per year, WIP inventory by 60% minimum, and finished goods inventory by 75% minimum.

• This was done to free up floor space for growth without expanding physical space, and to free up cash tied up in inventory.

• Methods included eliminating all warehouse space and moving inventory directly to production lines, reducing throughput time, increasing transparency with suppliers, and daily production updates to suppliers.

• Metrics like inventory turns and lead times were closely tracked. Techniques like finding dusty inventory and reducing forecasts helped.

• Early results included millions in savings, converting the parts center to consignment, and meeting growth targets without new buildings.

• A case study on Milgo Solutions also discussed compressing planning horizons and tightly reviewing forecasts and purchase signals to dramatically cut inventory 50%.

So in summary, it discusses lean inventory reduction efforts at Vermeer and successful techniques used, including increased supplier integration and metrics-driven approaches.

The article discusses how new technologies are helping companies reduce inventory levels. A survey found that over three-quarters of respondents have installed, are using, or plan to introduce new inventory management software and hardware. Popular technologies include inventory management software, barcode scanning, RFID, and warehouse management systems.

Companies are seeing benefits like greater inventory turns, lower inventory levels, faster inventory movement, and improved accuracy. Technologies are allowing more precise monitoring and control of inventory positions. Software is providing better forecasting, planning and analysis capabilities.

While large companies have led the way, mid-sized firms are also increasingly adopting new technologies. Case studies provide examples of reductions, like a company decreasing raw material inventory by over 50% through updated planning and procurement software. Demand chain principles and kanban practices combined with technology investments are also helping companies significantly reduce work-in-process inventory levels.

• The company uses a materials deployment planning tool and supply chain integration to dramatically reduce inventory levels while improving materials quality. They have also implemented inventory location, tracking, and cycle counting systems to achieve 98% inventory accuracy.

• Companies are implementing inventory optimization, forecasting, and planning software to more accurately predict demand and optimize inventory levels. This helps reduce inventory while maintaining or improving service levels.

• ERP systems are being implemented to improve inventory visibility, automate planning and purchasing, and generate real-time data. This facilitates inventory reductions through tools like order point management.

• EDI, JIT, barcoding, and VMI programs combined with supply chain integration and sharing plans with customers are enabling inventory reductions of 20-60% alongside productivity and cost improvements.

• Software tools are helping to more quickly and accurately identify slow-moving inventory in order to reduce excess stock levels.

• Tight integration of demand forecasting and inventory planning across the supply chain is supporting inventory reductions even during periods of high sales growth.

• Companies implemented inventory management systems like ADP Distribution 2000, SAP, Lawson, and JD Edwards to gain better control over inventory levels, reduce inventory amounts when business declines, and improve accuracy.

• Technologies like barcoding, RF scanning, and warehouse management systems (WMS) helped improve inventory accuracy, reduce labor costs and errors, and enhance loading/order filling processes.

• Manufacturing resource planning (MRP) and enterprise resource planning (ERP) systems allowed companies to better link planning, scheduling, ordering and tracking functions. This helped minimize inventory increases despite sales growth.

• Smaller companies noted manual systems required too much effort. New software freed up staff for other roles and improved supplier collaboration.

• Upgrades included converting MRP systems to Windows-based formats for improved flexibility and efficiency. Some companies planned future upgrades to barcoding, forecasting software and other inventory modules.

• Consultants saw MRP/ERP integrations as highly effective solutions when implemented as enterprise-wide efforts focused first on process understanding and simplification.

So in summary, companies found inventory management systems, technologies and software upgrades helped reduce inventory levels, labor costs, errors and brought better control, accuracy, planning and supplier collaboration. Consultants recommended comprehensive ERP implementations as most successful approaches.

Here is a summary of the key challenges of implementing inventory management software according to the expert cited:

• Scalability of the software solution - Smaller companies don’t need advanced capabilities of large enterprise software which can be complicated and costly to implement and maintain. Simpler, scaled solutions are best.

• Streamlining implementation methodology - Large projects take too long, smaller firms need faster implementations of a few months. Simplified processes are needed.

• Setting realistic expectations - Clear communication is vital given smaller firms lack dedicated IT staff and key staff fill multiple roles.

• Allocation of resources - Management support and avoiding distractions are important as staff have other duties.

• Overcoming fear of change - Training and reassurance help users adopt new systems.

• Mapping processes - Partner guidance helps define key workflows aligned with the software and best practices.

• Data conversion challenges - Limited resources mean data may not be centralized, clean up and conversion take significant time.

• Tendency toward shortcuts - Thoroughly modeling processes is critical for success despite desires for faster solutions.

• Training and support - Budget properly for training as small firms lack internal IT, and support during go-live is important.

The article discusses inventory management and advanced planning and scheduling (APS) systems. It provides examples of how Phillips Semiconductors implemented an APS system from Paragon Management Systems to improve operations.

Key benefits Phillips realized included significantly improving delivery performance from 50% to over 97%, reducing inventory levels while improving cycle times by 10%. The APS system optimized scheduling to minimize wait times at bottlenecks and reliably commit to customer due dates based on dynamic capacity planning. It integrated planning with the manufacturing execution system to continuously update schedules.

The APS implementation required clean data on routes, resources and orders. The system served as a planning engine, receiving input data and producing recommended production schedules. It helped Phillips streamline manufacturing across fabrication and testing areas to better coordinate work orders and forecasts.

Overall, the APS system allowed Phillips to achieve substantial operational improvements in delivery performance, inventory levels and cycle times through optimized scheduling and integrated planning across the order to delivery process. Clean input data and integration with other systems was important for successful APS implementation.

• Malmstrom identified several primary factors for successful implementation of an inventory management system at Philips semiconductor plant: understanding manufacturing processes and requirements, integrating and verifying data from different sources, testing outputs and commitments, and developing useful reports.

• The system was used to determine wafer production starts and customer order commit dates based on capacity and inventory. Accuracy was assessed and the system was used for business processes, improving performance.

• Philips is evaluating adding reactive dynamic sequencing for lot-level shop floor scheduling based on attributes like critical ratio and due dates.

• The next step is directly connecting global order entry to plant demand forecasts for faster commit/availability dates.

• The report identifies important functionality for inventory systems, like applying statistical techniques to granular item-location replenishment, automated decisions, understanding full costs, lifecycle management, and substitution opportunities.

• Systems should be able to flexibly adjust parameters like review cycles, forecasts, and safety stock levels in response to changes.

• Girard’s report provides a guide for selecting inventory control software modules based on company size/type, platform, and price.

• The article discusses new inventory management software solutions that were showcased at the National Manufacturing Week conference and the Distribution/Computer Expo trade show.

• Oracle introduced a new packaged solution tailored for mid-size high-tech manufacturers to help improve inventory turns. It includes Oracle applications integrated with partners’ software.

• MAPICS showcased their advanced planning and scheduling system to help mid-size manufacturers with synchronized resource planning and scheduling.

• A new partnership between WiData and Symbol Technologies provides a real-time inventory tracking solution using RFID technology.

• TigrSoft, formerly ShivaSoft, launched four new products including an advanced planning and scheduling software and reporting/tracking tools.

• The Distribution/Computer Expo featured over 200 exhibitors showcasing inventory management, warehouse management, and supply chain software solutions. Applied Tactical Systems demonstrated a new configurable warehouse management system.

• In general, vendors are offering more integrated solutions that go beyond just inventory management and extend into the broader supply chain. Both niche and enterprise solutions were on display.

• Vendor managed inventory (VMI) is becoming a best practice for inventory management as companies look to reduce on-hand inventory and better integrate their supply chains.

• Under VMI, inventory is pushed further back in the supply chain, with suppliers taking responsibility for managing inventory levels at customer sites. This allows customers to reduce the inventory they hold.

• J. Paul Dittman of Whirlpool noted there is a “mega-trend” of inventory being pushed back to suppliers through approaches like VMI. He says more companies will have suppliers manage inventory at customer/retailer sites.

• While some debate the size of benefits, research from Ohio State University found VMI can reduce inventory levels by 20-30% on average for customer companies. It also reduces inventory costs and improves customer service.

So in summary, VMI is seen as an effective best practice for inventory reduction by having suppliers take on more responsibility for inventory management further back in the supply chain, allowing customer companies to reduce on-hand inventory levels. Research supports the inventory and cost savings benefits of VMI.

• CPIM, who leads production, inventory and planning at Werthan Packaging, argues that VMI (vendor managed inventory) reduces lead times and finished goods inventory through tighter demand controls and quicker response to demand changes. He estimates up to 20% savings, or $1 million for Werthan.

• Mark Williams from North Highland believes VMI cements customers to suppliers since customers outsource material management to the supplier. It takes major issues for customers to change suppliers after VMI.

• Drew Curtis from TTI argues true partnerships with common goals can benefit both companies through reduced supplier base, lower inventory liability, and increased flexibility for customers, and solidified customer base and material support for suppliers.

• Supplier selection is critical for VMI. The inventory management process and order release mechanisms must be evaluated. Automated planning based on forecasts is preferred over manual planning.

• Internal organizational issues like dedicated resources, education, justification to management, and streamlined communication channels must also be addressed for VMI initiatives.

• As experts agree, VMI can result in less inventory for both customers and suppliers, so many companies are considering it from both perspectives.

This summary describes the implementation of a vendor managed inventory (VMI) program by Tekelec, a manufacturer of telecommunication equipment. Some key points:

• Tekelec implemented a VMI program that is fully integrated into their manufacturing process, stretching from customer orders to inventory replenishment.

• In just 8 months, they designed, tested, and operationalized the system. After 5 months of running production through it, results included:

— Inventory turns increased 40.6% on average.

— Inventory levels reduced 30%.

— On-time shipments up to over 98%.

— Months of inventory dropped 30% from January 1997 levels.

• Objectives of the VMI program were to reduce manufacturing replenishment cycle times (achieved 40% reduction) and better support their pull manufacturing system while not adding liabilities like increased inventory levels.

• They selected core suppliers already experienced with VMI and shared Tekelec’s vision. The team redesigned the replenishment process to eliminate redundancies and inefficiencies.

• The new VMI system had material owned by distributors until assembly, consolidated orders to suppliers, and daily replenishment deliveries directly to the production line just-in-time.

The passage describes how a company implemented a new vendor-managed inventory (VMI) system combined with supplier scheduling to greatly improve inventory management and reduce cycle times.

Key aspects of the new process include:

• Transactions for ordering, receiving, issuing, and paying for materials are highly automated, reducing the cycle time by around 40% and handling by 25%. It also limits liability to only components used in finished goods.

• The system was tested for over 2 months to ensure it could handle expected levels of complexity and workload.

• The company’s ERP system was adapted to enable electronic data interchange needed for VMI. Additional fields, modules, and reports were added.

• Operational controls like backflushing, cost reviews, and data accuracy audits were established. Suppliers have confidence in the system’s accuracy.

• A demand planner position directly coordinates with customers and performs master scheduling. This vertically integrated tasks across functions.

• Supplier scheduling was added by engaging key suppliers to reserve production capacity in advance, reducing material lead times from 5-6 weeks.

• One master planner now handles all tasks for key customers, linking customers and suppliers through the supply chain. This streamlined communications.

The passage discusses how to calculate the savings associated with implementing a vendor-managed inventory (VMI) program. Some key points:

• It analyzes the experience of one distributor that implemented VMI across its small, medium, and large branches. Metrics measured include inventory levels, in-stock percentage, sales, and purchasing/buying effort.

• Calculating inventory savings is done by subtracting current from previous inventory levels and multiplying by a carrying cost factor (e.g. 20% used in the study).

• Increasing sales benefits are estimated by multiplying increased in-stock percentage by lost sales percentage and average weekly sales.

• Reduced buyer/purchasing effort savings are calculated by determining hours saved per week times a fully loaded employee cost.

• Total annual savings are the sum of inventory reductions, increased sales, and reduced effort benefits as a percentage of projected sales.

• Successful VMI requires formal parameters, information sharing mechanisms, and reliable delivery processes between supply chain partners. Misconceptions and lack of trust can hinder VMI savings.

So in summary, it outlines a quantitative approach to determine the potential cost savings from implementing VMI across different branches of a distributor.

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The article discusses various strategies that purchasing departments can employ to help reduce cycle times, such as establishing supplier partnerships, specifying container sizes that match production needs, arranging for consignment inventory storage near manufacturing facilities, using EDI to streamline ordering and payment processes, and getting involved in product development. It also covers best practices for implementing a effective cycle counting program to improve inventory record accuracy.

Here is a summary of the key steps to establish a control group cycle counting process:

1. Select the control group - Include a variety of items that represent the overall inventory in terms of cost, count method, usage levels, size, storage location, issue transactions, and backflush items. Keep the control group a relatively small number.

2. Count the control group items - Physically count the items, taking care to accurately supervise the counts. Involve warehouse/material handling staff to increase ownership. Count daily but rotate which items are counted each day.

3. Compare counts to records - Administratively compare the physical counts to computer records, ensuring a clean cutoff of inventory transactions. Conduct a second count if discrepancies exist before adjusting records.

4. Reconcile and identify errors - Determine the precise cause of any errors since the last count interval was only a week. Thoroughly investigate to find conclusive evidence of the cause.

5. Develop corrective actions - Improve procedures or tools if errors are due to inadequate processes. Focus on problem identification and solving rather than blaming individuals.

6. Publish results - Share statistical accuracy results and corrective actions taken with both employees performing the work and management supporting the effort.

The key goal is to maintain accurate inventory records over time through continuous error investigation and correction as part of the cycle counting process.

• Cycle counting allows companies to identify slower-moving and obsolete inventory items. It flags issues that need quick action.

• Proper training is essential for an effective cycle counting program. One company eliminated their program for 3 years and saw accuracy drop to 60%. Reinstating the program with training raised accuracy above 90%.

• Consistently fixing causes of errors found in cycle counts leads to steady accuracy improvements over time.

• Aggressive cycle counting reduced one company’s end-of-month inventory by 90%, saving millions.

• Cycle counting requires dedicated staff. One company’s initial attempt failed due to lack of commitment.

• Barcoding and RF technology can enhance cycle counting results. Some companies have eliminated annual physical inventories as a result.

• Forecasting accuracy averages only 62% at the item level. More accurate forecasts are needed to optimize operations given pressure for better inventory management, customer service and resource use.

• Factors like involving customers, product aggregation, assumption documentation, and review techniques can improve forecast accuracy.

When a product is going on sale or having a promotional period with a lower price, consumers may delay purchasing that product until the sale or promotion starts. This is because they know they will be able to get the item at a discount during the promotional period.

Consumers may also take advantage of the lower price to buy more of the product than they originally intended or needed. If they know the price will increase again after the promotion ends, they have an incentive to stock up while the discount is available.

So promotional periods and sales can encourage both delayed purchasing in anticipation of the lower price, as well as increased purchasing quantities by consumers looking to benefit from the temporary discount. This impacts consumer behavior and can boost sales during the time a product is on promotion through strategic price reductions.

• Barcode technology has helped solve issues like unit of measure errors for inventory items in warehouses.

• The company has implemented ABC cycle counting in their warehouse and improved inventory accuracy to 99.2%. This has also eliminated the need for physical inventories and reduced machine downtime.

• Cycle counting, together with improved forecasts and a statistical scheduling system, has allowed the company to stock appropriate levels of seasonal inventory.

• A small producer of electronic components has just begun implementing ABC approach and cycle counting to try and reduce excessive finished goods inventory levels. They aim to improve inventory record accuracy and eliminate biannual physical counts.

• Experts discuss that cycle counting alone does not improve inventory accuracy, but is a diagnostic tool to identify and fix root causes of inventory integrity issues. Achieving 98% inventory integrity is possible by following an eight step process which includes cycle counting as the “final exam”.

• Key elements of an effective inventory accuracy program include clear material flows, facilities/storage, training, ongoing assessment/diagnostic programs, cut-off control/reconciliation, and oversight by an accuracy group. Discipline is needed long-term.

• Achieving high inventory accuracy is a company-wide project involving many departments and managing risk factors like commitment, experience, time allocation, and avoiding blame.

• Forecast accuracy is a challenge that many managers struggle with, which can lead to stockouts or excess inventory. However, efforts are being made to improve forecasting, with one poll finding 28.2% of respondents now focusing on it, up from 20.2% a year earlier.

• At a recent conference, three aggressive solutions for improving forecast accuracy were presented:

1. Schedule sharing with suppliers to provide real demand information rather than just a forecast. This involves sharing confidential schedules and reaching agreements on handling demand.

2. A process for verifying a new customer’s forecast by comparing item mix percentages to historical data and determining if differences can be explained. For new lines/customers, providing an initial forecast may be better.

3. Introducing “demand flow leadership” to manage the supply chain using the best demand information from end customers. This aims to improve lead times, lot sizes, and safety stock by pushing products through the supply chain according to replenishment rules and synchronization.

Here is a summary of the key points about the new study benchmarks:

• The study presents new inventory benchmarks derived from raw IRS (Internal Revenue Service) data, comparing ratios for companies that reported a profit versus those that suffered a loss.

• It separates the data into five critical inventory benchmarks: inventory to sales turnover, average collection period, working capital to total assets, cost of operations to sales, and inventory to working capital.

• This split allows comparison to see which group (profitable vs unprofitable) a company’s performance aligns with.

• The benchmarks cover over 90 manufacturing sectors and provide industry-specific diagnostics for each ratio.

• Ratios like inventory turns and working capital metrics can indicate how efficiently a company manages inventory compared to its peers.

So in summary, the new study establishes profitability-based inventory benchmarks across key ratios using IRS data, allowing companies to evaluate their own performance against profitable versus unprofitable peers in their industry.

Here is a summary of the key metrics provided:

• Inventory turns - Measures how quickly inventory is sold and replaced over an accounting period. Higher is generally better as it means less money is tied up in inventory.

• Inventory to cost of goods turnover - Measures the value of inventory held relative to costs of production. Should be examined alongside gross profit margin. High margins and turns indicate efficient operations.

• Days of inventory - Indicates how many days of inventory is held on average. Lower days is generally better as it means less time elapses between purchasing/producing inventory and selling it.

The data highlights various financial and operational metrics for companies across different manufacturing industries. Key ratios focused on measure inventory levels, turnover, and efficiency relative to costs and sales. Low turns, high inventory levels or days generally suggest overstocking issues while high turns and low days indicate more efficient inventory management. The summary focuses on inventory-related metrics included in the provided data tables.

• Inventory levels that are higher than industry norms can indicate poor inventory control, issues with sales forecasting, or obsolete inventory.

• Inventory to cost of sales ratio measures inventory efficiency - a lower ratio may mean the company is more efficient, but too low could mean lost sales or inefficient production.

• Inventory to working capital ratio measures liquidity - a lower ratio indicates higher liquidity which creditors prefer.

• Inventory managers are divided on whether to use inventory turns or days of supply (days on hand) as the key performance metric. Larger companies are more split while smaller firms favor turns.

• Advocates of turns say it’s simple, an industry standard, and helps with forecasting, production planning, and warehouse operations.

• Supporters of days on hand say it better reflects stock availability and is easier to understand and communicate.

• Some companies find value in using both metrics for a more complete picture of inventory performance.

• The article discusses inventory reduction strategies and performance measurement in the US high-tech sector. It analyzes data from a consulting firm (PRTM) on inventory turns and other metrics.

• Over the last 20 years, US high-tech industries nearly doubled inventory turns from 2.5 to 4.8, though progress has stalled in the last 5 years. US performance on asset turnover has declined since 1993.

• European companies have made more progress in the last 5 years, reducing cash-to-cash cycle times by 20 days since 1993.

• The analysis looks specifically at computer, aerospace/defense, telecom, and electronic equipment sectors. Computers have seen the most impressive gains, while aerospace struggled due to industry restructuring.

• Telecom delays inventory ownership through contract manufacturing and component suppliers. This sector has steadily improved inventory as a percentage of revenue.

• Key lessons are the impacts of short product lifecycles/price erosion (computers), industry consolidation (aerospace), and outsourcing strategies (telecom) on inventory management performance.

• The US pharmaceutical and chemicals sector continues solid revenue growth. It improved inventory turns from 3.2 to 3.8 and reduced its cash-to-cash cycle to a five-year best. Inventory as a percentage of revenue also improved each year from 14.6% to 12.5%.

• Fredricksen explains that high margins and availability focus in this industry has traditionally prioritized inventory supply over initiatives to improve performance. However, improved metrics could indicate emerging awareness of need to focus on supply chain performance.

• High capital requirements in this sector push down asset turns to 0.9.

• Integrated supply chains and new ERP implementations in high-tech are expected to boost turns beyond 5.0 in the next two years as implementations are completed.

• Creating a formal safety stock policy with rules like 2 weeks for A items, 4-6 weeks for B items, and 10+ weeks for C items is recommended. Safety stock should consider demand instability, response times, criticality, and other factors.

• Electronic transactions with third party warehouses are expected to increase, with almost 70% being electronic by 2004.

• Amnesty days are held for kanban cards to retrain employees on proper handling and avoid punishment for misplaced cards.

• The Supply-Chain Council announced SCOR Version 4.0 which includes returns as a new Level 1 process.

• Ten ways to reduce inventory costs are identified such as identifying obsolete inventory, adjusting safety stock, and conducting geographic sales analysis.

• Carefully vet potential internet hosting providers to ensure they have expertise in the specific inventory/WMS application and business model.

• New software and tools were announced to provide consolidated inventory visibility, optimize distribution planning and site location, and support CPIM certification. Guiding principles for logistics outsourcing focus on clear expectations, provider selection, communication and measurement.

• Vertex introduces the Stradivari packaged warehouse management system, a complete solution for distribution and warehouse facilities that streamlines operations. It provides real-time visibility and accountability. The system is configurable without programming.

• Dick Armstrong provides an evaluation of over 130 logistics websites in a guide called “Who’s Who in Logistics Websites?“. It profiles the sites and grades them on a scale from A to F. The guide is available in hardcopy for $195 or hardcopy and CD for $495.

• Manhattan Associates launches Infolink, an Internet solution linking retailers and suppliers to provide real-time supply chain visibility.

• J.D. Edwards announces OneWorld Xe, a collaborative commerce enabler with over 300 pre-integrated applications for inventory management, vendor management, warehouse management and more.

• A study found that users of automatic replenishment programs generally met their goals of improved customer service and reliability but received lower ratings for reducing costs and inventory.

• Kewill extends its Kewill.Net business portal with additional ERP content and visibility.

• Supply chains must become more compressed and flexible to meet customer expectations for greater speed. Main concerns include integrating software, third-party data, e-invoicing, and overseas suppliers.

• Supply chain simulation software like SimChain analyzes inventory strategies and the effects of changes to logistics networks, control policies, and demand fluctuations.

• Companies moving into e-commerce will need to change picking rules, storing online order items separately for fast “each” picking rather than full pallets/cases.

• Organizations adopting new supply chain management software need to take ownership of the systems rather than relying too heavily on consultants, to retain expertise internally.

• Oliver Wight announced a 90-day sales and operations planning program to quickly generate results from implementing S&OP.

• Outsourcing strategic decision-making for areas like materials planning is risky as it amounts to outsourcing the “brain trust.”

• New supply chain software releases aimed to enhance areas like multiclient functionality, e-fulfillment, freight rating, order routing, and inventory visibility.

• Warehouses should be designed for fast inventory turns with receiving and shipping areas close together to facilitate cross-docking.

• Surveys found rising logistics costs as a percentage of sales, and widespread but disappointing S&OP adoption. Collaboration and relationships remained important despite e-commerce.

• Kewill introduces MAX Data Collection, a new barcode data collection solution for small and midsize manufacturers that supports 18 ERP transactions in real-time and starts at $7,500.

• Burton Schaffer of Tompkins Associates recommends guidelines to improve inventory record accuracy, such as establishing high expectations, measuring accuracy frequently, reporting results publicly, using accuracy checks to correct errors, and rewarding improvements.

• Chris Newton of AMR Research says there is no such thing as “virtual inventory” and internet retailers still need physical warehouse space, labor, and transportation to fulfill orders.

• QAD’s next enterprise application release will feature kanban sizing and yield calculation capabilities for the electronics industry.

• Sedlak Management Consultants warns against choosing a WMS that requires major business process changes and to clarify functionality requirements in writing.

• Companies can receive a tax deduction for donating excess inventory to charity.

• Harding & Associates provides tips on calculating total inventory carrying costs, such as cost of money, taxes, facilities, personnel, equipment and software.

• Radcliffe Systems launches a new partner program and releases an updated version of its WMS software with new task prioritization and interleaving features.

Here are the key points from the summaries:

• BigVine.com launched an online bartering marketplace that allows businesses to trade excess goods and capacity for needed items using “Trade Dollars”.

• BenchmarkReport.com offers a free service for manufacturers to compare their financial performance against peers.

• A new edition of “Who’s Who in Logistics?” profiles nearly 100 traditional and e-commerce third-party logistics providers.

• Integrated Warehousing Solutions argues that application service providers can provide affordable WMS systems through low-cost hosting.

• Blinco Systems announced new Web-based modules for its 3RDWAVE4 supply chain execution software.

• The Supply-Chain Council released version 3.1 of the SCOR model with changes to services and infrastructure sections.

• Emerging WMS applications are addressing more sophisticated warehousing functions like increased automation and system networking.

• iSolve.com launched an e-commerce marketplace for buyers and sellers of excess inventory, underutilized assets, and excess capacity.

• HK Systems created a “center of excellence” focused on third-party logistics supply chain solutions.

• Preactor introduced a new range of scheduling solutions for small and midsize manufacturers.

• JobsInLogistics.com debuted an online recruiting website for logistics jobs.

• Tompkins Associates published a monograph on achieving warehouse excellence.

• Efinity released an upgraded version of its web-hosted supply chain collaboration solution with new VMI functionality.

Here is a summary of the key points from the passage:

• AutoPalletP3 is a warehouse optimization software that can run as part of a WMS or standalone. It uses item and order data to automatically divide orders into quality pallets that meet ergonomic and productivity standards.

• Oliver Wight introduced a “Rescue ERP” program to help companies improve ROI from their ERP system through a quick 1-week assessment and implementation plan.

• Managing inventory requires focusing on both the level of customer service provided and the amount of capital required to maintain inventory levels. These factors are closely linked.

• QAD introduced new lot management system functionality for inventory control, including attribute validation, distribution management, and quality enhancements.

• A new guidebook was published describing the capabilities of different e-fulfillment companies to help identify the best providers for specific needs.

• The National Association of Wholesaler-Distributors released a new guide on managing distribution firms focusing on the value equation of quality, price, life-cycle cost and hassle factor.

• Inventory managers can help smooth the financial auditing process by communicating details, cleaning up inventory areas, and providing necessary documentation for auditors.

• A new low-cost warehouse management system called Stockmaster/Express was introduced for small warehouses offering advanced functionality at an installed price as low as $99,000.

• Various online resources on collaborative planning, forecasting and replenishment (CPFR) were added to help with adoption, including an overview distinguishing CPFR from vendor managed inventory approaches.

Here are the key points from the passages:

• When suppliers should manage inventory in a supply chain: When there is a long lead time for raw materials, the supplier is best positioned to manage the entire supply chain, including customer inventory and service levels. The supplier should track and report on metrics like inventory turns, service, and quality.

• Emerging trends for successful warehouses: Focus on the customer, compress operations and time, introduce continuous flow, begin cross docking, use electronic transactions, offer customized warehousing, advocate third-party warehousing, adapt to smaller order sizes, automate, and consider the human element.

• Just-in-time manufacturing is not practical in a process manufacturing environment where the production line cannot be shut down, like in a continuous mill. Large staging of inbound materials is needed to keep the line supplied. It is also challenging to balance warehouse space needs with constant material surges from production.

The passages did not appear to discuss the locator system functionality or include any interactive elements, as they were summaries of topics in inventory management and supply chains.

• WMS systems running DCs need to be part of a closed loop of information sharing with other systems like order management, transportation management, inventory management, and supply chain planning applications. This enables better coordination and optimization of orders, inventory, and assets.

• Reduction in forecast errors leads to direct reduction in safety stock levels needed to maintain a given level of service. A 25% reduction in forecast error yields a 25% reduction in required safety stock. Forecasts should be tailored to the calendar rhythms of individual items.

• 3RDWAVE SCE supply chain software is now available as a web-based application for use over intranets or extranets.

• CLM released a research study on competencies, job requirements, and training needs for 22 logistics job families.

• Advanced ship notices (ASNs) are most accurate when created based on actual contents when a carrier is ready to depart, not from a packing list.

• CLM’s annual logistics software survey provides details on over 1,000 software packages.

• Warehouses should define customer tiers based on revenue to tailor flexibility and satisfaction levels appropriately.

• IOMA offers an inventory management database of best practices on its ManagementLibrary.com site.

• A survey found mixed results for inventory turn improvement, with most reductions coming in finished goods turns.

• MainBoss has released a new mobile inventory application for Palm OS devices that allows users to perform physical inventory counts. It is designed to work with MainBoss 2.6 maintenance software or as a standalone application.

• Warehousing remains a popular logistics activity to outsource, along with transportation. Activities less commonly outsourced include order entry/processing and inventory management.

• A WMS can reduce safety stock by 25-60% and time spent searching inventory by 50-90%. Other ROI potentials include 50-90% reduction in shipping errors costs and 20-50% reduction in overtime hours.

• InterBiz Supply Chain Group has launched an advanced scheduling solution called Quick Response Engine 2.1 to improve customer service, reduce lead times and improve capacity utilization for independent demands like orders.

• CFOs are paying stricter attention to inventory levels as a basic cost control tactic, with 71% controlling inventory more closely to boost cash flows.

• Warehousing experts caution that focus should not only be on supply chain strategy but also on “blocking and tackling” operational issues like finding good employees and reducing errors.

Here are the key points about inventory performance metrics:

• Measurements should be based on readily available data and be usable at all levels of the organization.

• Metrics need to be easy to change as needs change over time.

• Focus should be on improvement and corrective action, not just monitoring or control.

• Metrics are best expressed positively rather than negatively.

• Developing an inventory strategy across the entire supply chain can help reduce costs by replacing physical inventory with information sharing.

• Integrated inventory planning can improve forecasts by treating forecasts as ranges rather than single numbers and accounting for factors like forecast error and safety stock calculation.

• Proper implementation of metrics and strategies can improve warehouse storage productivity and reduce inventory levels.

• Inventory managers should place fast-moving items close to the floor and door for easier access and to reduce travel time within the warehouse or distribution center.

• A report from Arthur Andersen and the Distribution Research and Education Foundation examines trends threatening the wholesale distribution industry like e-commerce, supply chain integration, and globalization. It provides guidance on how firms can strengthen their core competencies to combat these threats.

• Buyers increasingly need visibility into in-transit inventory levels to support production schedule changes or promotions. Transportation suppliers are being asked to provide more information to increase visibility, such as through EDI, advance shipping notices, and tracking.

• Measuring inventory turnover is more meaningful when broken down by individual inventory categories rather than a total metric. This focus brings attention to areas needing improvement.

• Outsourcing inventory management still emphasizes cost savings potential from reduced inventory carrying costs, estimated at 7-10% savings. Most companies use a single third-party provider for outsourced logistics functions.

• The latest version of the Warehouse BOSS system expands radio frequency and tracking capabilities to streamline receiving and provide activity and task monitoring.

• The Supply Chain Operations Reference (SCOR) model was recently updated to version 3, improving standardization and describing supply chains across industries.

• Internal collaboration within a company is important for effective inventory management before extending information sharing externally to customers and suppliers.

• New software offers end-to-end visibility of inventory throughout entire supply chains via internet-based monitoring and tracking of product flows.

• Even simple automated planning systems can yield benefits from simultaneous consideration of materials and capacities, which may justify the investment costs.

• Ensuring bill of materials accuracy is important for effective inventory level analysis. BOMs should be regularly reviewed and updated to reflect current product specifications.

(1) Are the actual parts and subassemblies that are used on the shop floor reflected in the bills of materials (BOMs)?

(2) Are quantities per assembly and units of measure identified within BOMs?

(3) Has the purchasing lead time been entered into the item master for each purchased item?

(4) Is scrap or shrinkage factored into the yields? Pachura notes that bills created using 100% yields are almost always incorrect, resulting in shortages or overage due to inaccurate use of parts.

(5) The CLM has released its annual Logistics Software survey on CD-ROM, its new and only format. It includes details on over 1,200 software packages with individual data sheets providing information like system name, functions, distinguishing characteristics, databases, installation history, frequency of updates, price, and maintenance fees. The cost is $75 for CLM members and $100 for non-members.

• Celerity Solutions released WMS 5.0 warehouse management software with enhancements like Oracle integration, cartonization algorithms, expected/blind receipts, cross docking, and assembly tracking.

• The Supply Chain Council has been sanctioned as an ANSI standards body in anticipation of seeking ANSI approval for the SCOR model.

• Advanced planning and scheduling systems can help reduce inventory by improving material planning precision, production synchronization, cycle time reduction, inventory deployment, and safety stock matching.

• Accenture’s Supply Chain Value Assessment tool uses the internet to evaluate procurement, manufacturing, product development and distribution options.

• The updated APICS Dictionary contains the most current supply chain terms and definitions.

• A National Association for the Exchange of Industrial Resources kit explains how to obtain a tax deduction from excess/obsolete inventory.

• Compaq specifies pallet designs to prevent damage, theft and ease customer receipt while maintaining pallet integrity.

• A WMS troubleshooting guide explains common problems, diagnostic tests and solutions as a quick reference.

• Wholesalers are developing better supplier relationships to improve inventory flow through the distribution pipeline.

• Managers said the top inventory concerns are reducing levels, accuracy, carrying costs and turns.

• Slow moving consignment inventory should be monitored and handled per agreements on returns or purchases.

• Total system inventory across the supply chain best indicates opportunities to reduce inventory.

• Investment protection is the top requirement for a warehouse management system vendor.

• Activity-based costing can help inventory managers understand costs and where to apply efforts.

• Prescient Systems’ Collaboration Engine allows synchronized forecasting and replenishment planning with trading partners.

• Inventory obsolescence review should start at the receiving dock, focusing initially on A-level inventory items which have high value and usage. Other criteria for reviewing inventory include items with decreasing demand, items subject to supplier improvements, items with limited shelf life, parts easily damaged, and unique customer-specific parts.

• A new report from the Distribution Research and Education Foundation explores the potential of electronic commerce, including how EDI-based continuous replenishment programs can be improved and how interactive web commerce will change distribution channels.

• Inventory levels should provide better availability for less expensive items since capital is limited. Customers will be less satisfied with out-of-stock situations for inexpensive replacement parts compared to more expensive core components.

• Successful warehouses continue focusing on inventory reduction practices. In the future, space will still be important but storage less so as organizations work to reduce costly inventory, limit forecast errors, and increase inventory velocity.

• Uncertainty in supply and demand drives physical inventory holdings in supply chains. Reducing inventory requires measuring uncertainty sources and substituting information for inventory.

• A new online subscription service is available for benchmarking supply chain performance based on the SCOR model.

• The passage discusses various topics related to inventory management, including logistics and supply chain strategy, performance measurement, inventory planning and management, third-party logistics, warehouse management systems.

• It provides examples of companies using the internet to improve supply chain functions like vendor managed inventory and lot tracking. One technique being used is supply chain optimization.

• It mentions a survey finding that over half of mid-size manufacturers use the internet for supply chain information sharing.

• It discusses the importance of faster implementations of warehouse management systems to reduce risks and shorten time to benefit.

• A new supply chain performance measurement suite called SeeChain is introduced that allows measuring inventory levels, demand accuracy, and excess inventory across the supply chain.

• It provides advice that companies should separately bid software and hardware when implementing warehouse management systems to get the best financial deal.

• Several new inventory management products and services are mentioned like a work order component for EXE’s WMS, inventory performance measurement displays, and a Web-based e-commerce product from WebPLAN.

• Issues discussed include keeping process maps up to date, a new inventory control module for web-based procurement software, and that organizations need both ERP and supply chain management capabilities.

Here are the key points from the passage:

• Carol Ptak, an IBM executive, argues that supply chain management is the next logical step after implementing an ERP (Enterprise Resource Planning) system. ERP facilitates planning of resources across an enterprise.

• Supply chain management automates the integration of customer demand with supplier requirements through the ERP system. It allows quickly translating demand into supplier needs. The goal is minimizing inventory while improving agility and profitability across the supply chain partners.

• ERP is the “engine” that enables effectively translating customer demands into supplier requirements, which defines the requirement for effective supply chain management. Trying to implement supply chain management without using ERP to manage internal operations is like buying a car without an engine.

• Ptak asserts that ERP provides the ability for supply chain management to work, and supply chain management is the natural evolution from ERP implementation. ERP handles the internal operations and supply chain management connects the internal and external partners.

• A manufacturer of flexible packaging reduced lead times and inventory levels by moving to synchronous flow manufacturing. They reduced finished goods inventory by 30% and work-in-process by 25% by shortening customer lead times.

• A materials manager implemented an auto-replenishment process which placed the burden of inventory management on suppliers. This relieved buyers and increased inventory turns on replenished parts by a significant amount.

• A chemical company reduced slow-moving inventory by ensuring all sales, production, and marketing functions work together on sales and operations planning and understand the costs of holding such inventory.

• A logistics manager arranged for third-party logistics to improve visibility, order closer to forecasts, and streamline operations for a telecom equipment manufacturer.

• A sporting goods company convinced production to reduce assembly run sizes, which allowed for more product variety while reducing work-in-process inventory by 60%.

• A packaging manufacturer shifted inventory ownership to key suppliers in exchange for value-added services, saving up to 20% in costs.

• Visibility and support from top management was crucial to driving effective inventory reduction initiatives according to several companies. Reducing obsolete inventory and thoroughly analyzing all stock keeping units also yielded results.

• A manufacturer of industrial machinery shares customer backorder and inventory impact data with suppliers to have detailed discussions on performance. This information helps hold suppliers accountable.

• A small producer of carbon and graphite products reduced lead times, inventory carrying costs, and lost production by moving inventory ownership to suppliers through consignment. This was also done in exchange for lower pricing through a long-term supply agreement.

• Inventory managers are partnering with suppliers to move inventory ownership to the suppliers. This eliminates lead times, carrying costs for the partner, and lost production time waiting for quality approval. It also allows for negotiating lower prices through long-term agreements.

• Using a demand planning tool, a gas utility hopes to reduce excess inventory levels that have accumulated due to operating goods budgets being flat while demand increased. The tool will provide more accurate demand forecasts to align purchases with needs.

• In summary, the key strategies discussed are partnering with suppliers to shift inventory ownership to them in exchange for benefits like lower costs and prices, and using demand forecasting and planning tools to purchase the right inventory levels to meet demands. This helps reduce excess inventory accumulation.

A company had to operate more efficiently after its budget for hardware was slashed annually for five years. To reduce costs, it tightened inventory control of common items like steel and plastic fittings, pipe, valves, etc. The goal was to increase inventory turnover from once or twice per year to at least four times per year.

They implemented a demand planning system integrated with their ERP software to better analyze financial data and forecast demand. This helped identify slow-moving items, if items were no longer used, and plan ordering from suppliers more accurately. Inventory turns increased and the number of stocked parts was reduced, lowering costs. Warehouse operations also became more centralized and efficient.

Other companies discussed implemented enterprise resource planning software, RF warehouse management systems, service parts planning software, vendor-managed inventory programs, statistical forecasting tools, and warehouse management solutions. These helped optimize inventory levels, increased accuracy, reduced excess inventory, cut carrying costs and lead times, and improved the overall supply chain. The common theme is using technology and data analysis to tighten inventory management processes.

• The company brings in weekly sales data by customer, SKU, and distribution center from five geographic areas into a new forecasting technology (Prescient Systems). It also inputs monthly financial planning numbers.

• Using this data, the forecasting system develops short-term (2-5 weeks) and long-term (6-104 weeks) forecasts in about 3 days.

• The improved forecasting and continuous replenishment programs have reduced inventory levels by 20% and improved inventory turns by 27%, boosting profits.

• The new forecasting approach results in better demand forecasting, reduced inventory levels, improved inventory turns, and higher profits for the company.

• The company had been manually analyzing alternative inventory scenarios, which took up to two weeks to complete. They were looking for software to help simulate scenarios faster.

• They implemented webPLAN simulation software, which can now complete the same analysis in less than four hours. This has increased accuracy, reduced planning time by 50%, and automated analysis of delivery date feasibility.

• The software allows them to more efficiently test “what if” scenarios like canceled orders or changed project schedules. This helps them better plan inventory levels and meet delivery dates.

• Using the software has helped the company reduce inventory carrying costs by $1 million.

Here is a summary of the key points from the provided text:

• An inventory manager implemented inventory management software from Fourth Shift to better manage their inventory levels, optimize production based on demand forecasts, and improve inventory location accuracy from the low 80% range to consistently above 95%.

• A major manufacturer of timepieces reengineered their warehouse operations with a new warehouse management system and conveyor/pick control systems. This allowed them to accurately track raw material flows and finished good flows to improve inventory control.

• A distributor analyzed their slow-moving SKUs and unprofitable inventory using an automated inventory control system. This helped them reduce SKUs from 9,000 to 8,700 while freeing up cash and improving space utilization.

• A plumbing supplies distributor implemented the VIAWARE WMS system across three facilities to manage inventory in real-time and track inventory movements more effectively.

• An office systems manufacturer established an off-site dedicated storage and staging facility managed by a 3PL to remove inventory from their manufacturing plant. This improved order cycle times from 8 weeks to just 5 days.

• A chemical manufacturer collaborated with suppliers and customers on a supplier-managed inventory program using demand information sharing. This helped reduce safety stock levels by 60% and crisis shipments by 80% for all parties.

• A ball bearings manufacturer outsourced their tool crib operations to an MRO supplier, which improved inventory accuracy, reduced out-of-stocks and generated estimated cost savings of 20%.

• A computer parts distributor replaced their basic WMS with the TECSYS Elite WMS to handle their complex distribution needs. This improved inventory accuracy to a consistent 99% level.

• A planning and scheduling software helped reduce finished goods inventories for a paper products company by generating more reliable production schedules in real-time rather than from batch reports. This also improved integration between different production facilities.

• An advanced warehouse management system (WMS) increased warehouse efficiency by 25% by automating inventory tracking and accounting. This allowed the company to reduce inventory levels by one day and shrinkage has dropped 93% due to real-time inventory tracking.

• Cycle counting helped a metal fabricator improve inventory accuracy to 96.5% by better tracking inventory levels on the factory floor.

• A beverage company slashed inventory carrying costs 50% through improved demand forecasting using a statistical forecasting software.

• Finite capacity scheduling software helped a rug manufacturer better schedule production to balance orders and workload, improving manufacturing throughput and inventory management.

• Simulation software helped an automaker identify the impact of production variables on work-in-process inventory, leading to a 48% reduction through scheduling and technology improvements.

• An inventory optimization tool boosted inventory turns over 150% for a glass manufacturer while maintaining service levels and reducing inventory investment.

• An automatic notification system improved inventory and order data accuracy for an electronics company by automatically replenishing components based on inventory levels, streamlining the supply process.

• A midsize semiconductor manufacturer implemented a new Internet-based ERP system to replace its outdated 1980s system. The new system scans databases twice daily to assess material requirements and inventory levels, automatically initiating orders to suppliers as needed. It provides visibility into current inventory levels and future weekly requirements.

• A large eyewear and eye care products company implemented supply chain planning software to better coordinate production and distribution across global sites. It aims to reduce inventory levels and planning cycle times. So far it has reduced finished stock constraints by $2 million toward a $10 million goal.

• An electronics parts manufacturer implemented a new automated parts replacement system using barcode scanning and RF handheld terminals. This improved picking output by 40% and reduced outgoing shipment lead times from 5 days to 1.5 days.

• An LTL carrier added mobile computing terminals at customer docks to facilitate freight flow and provide real-time shipment tracking during cross-docking operations.

• A consumer products company improved supplier collaboration, with value-added suppliers taking responsibility for total supply chain management and reporting. This resulted in inventory reductions across parties.

• A toy maker implemented supply chain software to automate and digitize warehouse operations like receiving, putaway, picking and packing. It aims to increase inventory turns and lower operational costs.

• A manufacturer restarted its cycle counting process to restore order after several years without accurate inventory counts. Accuracy improved from 60% to the mid-90% range.

• A liquor distributor implemented advanced planning software to better control safety stock levels while improving customer service with less total inventory.

The passage discusses several ways that companies have found to improve inventory management and move buyers from manual ordering processes to more automated systems. Specifically, it describes how companies have:

• Implemented supply chain planning software to automate planned supply orders and alerts based on projections of inventory levels, sourcing rules, lead times, etc. This allows buyers to focus more on forecasting than ordering.

• Provided training to operators responsible for managing significantly larger and more complex inventory operations after mergers, which improved inventory turns and customer service levels.

• Invested in automatic identification and barcode scanning systems to track inventory movement in real-time and improve inventory accuracy by eliminating manual data entry errors.

• Implemented warehouse management systems with configurable automation capabilities to expedite picking and increase inventory record accuracy.

• Partnered with third-party VMI providers to receive daily inventory updates from distributors and automate optimized replenishment order planning based on demand history. This reduced inventory levels and discrepancies.

• Conducted training programs across entire warehouse staffs to improve cycle counting accuracy and emphasize the importance of accurate inventory records and reducing obsolete stock.

So in summary, the key approaches discussed are automation of planning and ordering processes, training, implementation of barcode/RFID scanning systems, warehouse management systems, vendor managed inventory programs, and company-wide training on inventory management best practices.

Here is a summary of the key points from the inventory management stories:

• A company implemented an integrated inventory accounting system that links engineering, cost accounting, and estimating teams, allowing them to track stock part usage and order quantities better. This eliminated annual physical inventories, reduced inventory 30% and improved accuracy to 98%.

• Scheduling software reduced work-in-process inventory 50% at a manufacturer by identifying disruptions to plant flow and enabling corrective actions.

• Radio frequency device counting improved inventory accuracy at a distribution center from outdated manual records to over 99%.

• ERP software supported a supplier managed inventory program where customers manage their own inventory directly.

• A cross-functional team worked with a major supplier to have them store and deliver materials on-site, reducing inventory costs and warehouse space needs.

• Automating an inventory system with barcodes and RF hardware improved accuracy from a paper-based system at an auto parts distributor, saving $20M in inventory costs and $3M in shrinkage.

• Manufacturing execution software reduced work-in-process inventory a week’s worth on one production line by better tracking product locations.

• Advanced planning software improved throughput, inventory levels, and cycle times by 10% at a semiconductor company through better routing and starts management.

• A virtual manufacturing strategy saved millions in inventory investment by improving responsiveness, collaboration and faster product development at a telecommunications equipment manufacturer.

The director of a company explains that in the past, engineering changes were made without input from purchasing, resulting in unnecessary excess and obsolete inventory. To address this, the company implemented a collaborative virtual manufacturing process connecting all parts of the supply chain through EDI and a PDM system. This has significantly reduced inventory levels, cut cycle times, and increased collaboration across the company and suppliers.

Implementing new inventory management procedures and measuring days supply of inventory revealed that maintaining a 32-day supply across the supply chain was unnecessary. After investigating and revising forecasts and cycle times, the company was able to reduce days supply and save millions in inventory costs without stockouts.

Here is a summary of the key points from the provided text:

• Whether or not a company needs supply chain management depends on the level of sophistication needed, not an outright yes or no.

• There are two main levels of supply chain management:

• Basic SCM, which focuses on getting the most value from existing MRP/ERP systems and best practices like supplier partnerships. This level is adequate for smaller companies with simpler supply chains.

• Sophisticated SCM, which utilizes newer IT tools for optimization. This level is needed by companies with large, complex supply chains or those where competitive advantage can be gained through optimized supply chains.

• When implementing supply chain initiatives, companies should differentiate their level of need as basic or sophisticated to set realistic objectives.

• A supply chain assessment model was introduced that identifies logical proficiency stages against business characteristics. This can help alleviate problems by assessing a company’s current supply chain maturity.

In summary, the key insights are that the level of supply chain management needed depends on a company’s specific needs and objectives, and assessing the current maturity level can help set proper expectations for initiatives.

The methodology for completing a supply chain assessment consists of six main steps:

1. Create a project plan to communicate the scope and resources needed.

2. Develop an “as is” supply chain proficiency model to establish the baseline.

3. Develop a “to be” proficiency model to define the desired future state.

4. Perform a gap analysis to identify differences between the current and target models.

5. Create a supply chain management plan by organizing projects to address gaps across characteristics.

6. Gain management approval for the assessment findings and plan by presenting the final report.

It is important that technology not be the only factor considered in supply chain redesign. Other critical elements like organizational structure, strategic alliances, and human resource management are also important enablers according to recent studies. Organizational infrastructure was found to be the most important enabler of supply chain implementation.

1. Business processes should be shared across the organization rather than owned by individual functional units to drive optimal supply chain performance through cross-functional alignment.

2. One key function that drives SCM initiatives is procurement/purchasing. The UW report found that setting clear expectations and understanding for strategic alliance partners was important for collaboration.

3. New benchmarks from NAM/McGladrey focus on individual plant site purchasing performance. Data shows purchasing effectiveness (variance as % of materials spent) and cost per purchase order are declining, indicating improved performance.

4. Future benchmarks may be impacted by increased supply chain integration and e-purchasing/E-commerce. While adoption varies by industry, more advanced industries like electronics and automotive require E-commerce in their supply chains. Overall it has moved past early adoption phases in US manufacturing.

• Supply chain integration and management requires going beyond traditional customer-supplier relationships to also consider shared planning, inventory, human resources, IT systems, and cultures.

• Motorola worked with an electronics manufacturing service provider to outsource production. This required close coordination on shared planning systems, inventory transfers, allowing displaced employees to work for the provider, and aligning corporate cultures.

• Motorola uses activity-based costing to identify cost drivers and weak links in processes. They assign letter ratings to parts based on supply management and engineering criteria like lead time, cost, sourcing options. This helps identify where they as the customer may be inflexible in specifications.

• Motorola employs a supply chain “ombudsman” to expose weak links and drive timely resolutions, helping assess where more cooperation is needed between customer and supplier. They use supplier scorecards and reviews to measure performance. The goal is removing all weak links through a balanced focus on both customer and supplier practices.

• The article discusses using a score sheet to evaluate and monitor key electronic service providers on a weekly basis. Performance is assessed across qualities like quality, delivery, communication, service, and technical performance. Each parameter gets a letter grade from A to D.

• Scores below a B require corrective action from the supplier. The scoring methodology allows for fairly easy monitoring with minimal data, but subjects like communication and service could be subjective.

• The supply chain manager can use this tool to drive improved performance internally and with suppliers. They should act as an ombudsman to change internal customers’ views and make responsibilities joint opportunities.

• Collaboration and information sharing across the supply chain can help reduce inventory levels. Strategies like vendor managed inventory, just-in-time delivery, and real-time inventory tracking are commonly used.

• Supply chain synthesis goes beyond traditional supply chain management by focusing on continuous improvement rather than link optimization. It emphasizes factors like nimbleness, speed, visibility, integration, innovation, knowledge sharing, risk management, sustainability and collaboration. Whether a company is ready depends on these 10 factors.

• Tompkins advises understanding that the issue of speed has changed and a new thought process around speed is needed. Continuous improvement is necessary as today’s solutions will be outdated tomorrow.

• Everything an organization does is different now, so there is no “business as usual”. Breadth of understanding is important across the entire supply chain links and how they connect.

• Customer satisfaction differs from customer service in that satisfaction is about what the customer gets, not just what you do for them.

• Best practices are always evolving, not fixed, and the goal should be to create new best practices rather than compare to others.

• A global perspective is necessary as location is irrelevant online. Quality communication across the supply chain is important.

• All activities and processes need to be focused on the bottom line metrics like ROI, ROA and profitability.

• Tompkins developed a diagnostic tool to benchmark organizations across 10 key areas and identify areas for further integration and improvement to achieve supply chain synthesis.

• A score of 0 indicates an organization has fully adopted traditional logistics focused primarily on internal materials management coordination.

• A score of 0-20 represents an organization that is logistically isolated, meaning it focuses only on its own operations.

• A score of 40-60 represents an organization that is logistically interfaced, meaning it has some coordination with key suppliers and customers but not full integration.

• A score of 80-100 represents an organization that is logistically integrated, meaning it has adopted supply chain management practices and fully integrates its demand and supply planning with key partners up and down the supply chain.

The scale is from the monograph “Achieving Logistics Excellence through Supply Chain Synthesis” published by Tompkins Associates, which provides a framework for assessing an organization’s level of supply chain integration and adoption of supply chain management practices.

• There is a trend emerging where companies are shifting from managing inventory as a corporate asset on their own balance sheets to managing it as a supply chain asset upstream with suppliers/partners. This is reducing total inventory investment.

• Advanced information tools are enabling this shift of inventory management upstream. Leading companies require more sophisticated practices from suppliers like vendor managed inventory.

• U.S. companies have led the way in improving inventory performance metrics like turns and days of supply over the last 5 years. Europe has focused on operational efficiency.

• Adoption rates vary by industry - computers have seen the biggest gains while chemicals/pharma are slower to change so far.

• A survey found that over 50% of logistics managers see tighter/transparent cost controls as an important benefit of electronic supply chain management (eSCM) solutions. Companies expect eSCM to provide useful cost control.

So in summary, the trend is toward managing inventory more collaboratively upstream in the supply chain as a supply chain asset rather than a corporate one, enabled by new technologies, with varying adoption rates by industry but an emphasis on using these solutions to improve cost controls.

• CPFR (collaborative planning, forecasting and replenishment) aims to reduce out-of-stock items and excess inventory by better integrating retailers and manufacturers through information sharing and joint planning.

• The core idea is that partners develop a market-specific plan based on category management principles to determine what will be sold, how it will be marketed and replenished.

• Walmart and P&G are cited as leaders in implementing CPFR down to the individual SKU level to virtually eliminate out-of-stocks. They forecast demands collaboratively and Procter & Gamble works onsite with Walmart.

• While some retailers may not fully implement CPFR due to size, concepts like EDI, vendor agreements and coordinated replenishment programs can still help streamline operations as done by Boscov’s, a billion dollar Northeast retailer.

• CPFR aims to convert collaborative forecasts into automated shipping plans to make the process more efficient compared to traditional order management systems. Implementation requires partners to take joint ownership of the process.

• Fabrizio says that implementing CPFR requires full commitment and cooperation from supply chain partners as well as internal employees. All parts of the organization need to participate.

• Technology is needed to implement CPFR, like EDI, Internet capabilities, POS data, forecasting software, and DC software. However, changing company culture and cooperation between partners is more challenging.

• When implementing CPFR, companies should use the CPFR guidelines manual, become members of industry groups like VICS to benchmark against other companies, and network with other VICS members.

• If implemented successfully, CPFR can provide benefits like improved communication, a more efficient supply chain, reduced inventories, and lower prices - which can increase sales by having fewer out-of-stock items. However, the full results are still being determined as it is a new model.

• The article discusses the challenges of managing unsalable products in the supply chain from experts in the logistics industry.

• Key points discussed include establishing dedicated roles to manage unsalables, setting clear policies on how to handle unsalables, considering alternative packaging to reduce damage, evaluating customers’ equipment that handles products, using technology like cameras to monitor handling practices, and potentially having an internal reclamation center to deal with damaged goods.

• Specific companies mentioned include Motts, Gerber, and Quaker Oats. They have all dedicated resources to unsalables and established standard operating procedures to control damage internally and with customers.

• Packaging changes, monitoring equipment customers use, and technology are presented as ways to reduce unsalables externally. Having an internal point of contact, clear policies, and monitoring practices are ways discussed to reduce unsalables internally.

Here are the key points:

• Sprint PCS hired a third party to operate an in-house reclamation center. This has been a good solution as it can turn defective phone handsets back into a sellable state in under one week.

• Two consumer goods companies, Nike and Warner-Lambert, developed forecasting systems that incorporate promotional data and require collaboration with trading partners. This has helped them create successful logistics replenishment programs for promotions.

• Warner-Lambert identified gaps in its three-step promotion management process: planning, execution, evaluation. It now takes a more collaborative approach and monitors execution more closely.

• Nike relies on trend analysis, country-specific demand plans, and global IT systems to improve forecasting accuracy and reduce air freight costs. This helps ensure the right inventory levels and meet demand.

• A study found that two-thirds of respondents plan to share more information with customers and suppliers to collaborate on forecasting and replenishment through initiatives like synchronized operations planning.

The passage discusses collaboration in supply chain management. Specifically, it focuses on the concept of collaborative planning between trading partners/vendors.

Collaboration goes beyond just sharing information and requires jointly developing plans and forecasts. Key aspects of collaboration include shared responsibility for demand forecasting and replenishment planning. It allows partners to provide input on each other’s plans to better match supply and demand.

The passage provides examples of companies piloting collaborative projects, like Heineken sharing forecasts with distributors. Industry groups are also developing standards to facilitate electronic collaboration.

Effective collaboration falls under three main types - manufacturers collaborating with suppliers on production scheduling, manufacturers collaborating with customers on demand planning, and companies collaborating with third parties on logistics planning.

Overall, collaboration allows trading partners to have more visibility into each other’s operations and jointly modify plans to decrease uncertainty and improve supply chain performance. While still emerging, collaboration may eventually involve routine electronic sharing and modification of plans between buyers and sellers.

• Detailed inventory tracking throughout the supply chain is difficult to implement, as it would require labeling every item with barcodes and scanning them at every transfer point between manufacturers, warehouses, transportation, etc. This level of tracking is not commonly done.

• Doing so would take investments at vendor sites to label and transmit data, reduce sourcing flexibility, and depend on vendors accurately performing tasks. Items would also need to be scanned every time they are handled to get an accurate count.

• If implemented properly, it could provide benefits like knowing exactly what inventory is where to address shrinkage issues, allocate stock more efficiently, and potentially ship directly to customers. However, the infrastructure and agreements may not exist to support this level of tracking across long, complex supply chains.

• Inventory managers will need to take on more critical supply chain roles, as the costs of inventory holdings, shrinkage, and long supply chains have increased the importance of tightly managing inventory flow and costs. However, aggregate inventory levels and ratios have remained stagnant despite new initiatives.

• Delaney argues that logistics productivity has been held back by restricting heavier trucks and protections for the Jones Act, reserving coastal shipping for American ships. This has cost $30 billion in potential gains.

• He insists companies need to focus on inventory velocity as future environmental regulations will limit cost reductions from carriers.

• Delaney is highly critical of ERP systems, saying they coincided with a productivity plateau in the 1990s. Legacy planning systems that fueled gains were replaced without strong alternatives.

• He notes key vendors are improving interfaces but argues meaningful impacts on productivity will lag years behind implementation. Top management needs to address logistics issues with ERP systems.

So in summary, Delaney argues logistics productivity has stalled due to certain regulations and protections, as well as issues with ERP systems replacing prior planning tools without strong alternatives. Management needs to address these issues to regain gains.

• Companies need to take a strategic approach to logistics outsourcing by identifying core vs non-core activities and only outsourcing non-core activities. They should evaluate insourcing vs outsourcing costs for each activity.

• Outsourcing multiple logistics functions can increase gains, but companies must ensure gains don’t dissipate over time by building continuous improvement steps into outsourcing relationships.

• Internal logistics experts are still needed to maintain organizational control over the outsourcing process.

• Supplier certification efforts aimed at boosting quality need to be re-evaluated, as many have been reducing these efforts. Continuous commitment is needed as supplier processes and quality can change over time.

• Effective certification requires separating specifications from tolerances, conducting risk analysis, requiring supplier control plans, run charting, and focusing suppliers on process improvements through inspection data and capability analysis. The goal should be getting suppliers to zero defects.

• Taking a strategic approach to certifying only the most important suppliers can help track quality performance and identify candidates for bypassing receiving inspection. This can reduce defects and inspection costs. Ongoing evaluation and evolution of certification processes is important.

• The passage discusses the importance of tightly integrating suppliers into the supply chain. It notes that executives are increasingly committing to supply chain integration and cites a study that found most companies still have room for improvement in supplier integration.

• Tighter supplier integration will be a key focus going forward. Companies will consolidate supplier bases and use technology like EDI to improve relationships. Cross-border partnerships will also grow in importance.

• Selecting suppliers based solely on cost is insufficient. A successful relationship requires suppliers that can meet quality, lead time, and quantity needs. The passage advocates developing client guidelines and a supplier questionnaire to fully understand capabilities and select the best long-term partner. Getting clients deeply involved in the process leads to improved supplier selection.

• To evaluate suppliers, firms should ask both general questions about capabilities/experience and specific questions about product/service outcomes. A selection team determines the importance of each question. This ensures selection is based on capabilities and not just price.

• Price negotiations should have technical and economic responses separated. The technical team focuses on capabilities while procurement analyzes costs. Finalists are selected and then prices are negotiated.

• Developing long-term relationships requires performance-based contracts where both parties share risks and rewards. Key performance indicators should be established to measure the relationship. Strong communication is important.

• Experts emphasize developing clear and meaningful metrics to measure supplier performance. Factors may include quality, delivery, cost, service, etc. Weights and definitions of each factor need to be determined. Surveys of buyers and users can provide input for “softer” measures.

• Approaches include limited key measures to focus on, scorecards to track metrics, and formulas to calculate ratings. Data should be routinely collected and providers should know how they are rated to identify areas for improvement. Overall the goal is to objectively evaluate suppliers on critical success factors.

• The passage discusses key findings from two studies on supplier management practices.

• One study found that many proven best practices for improving supply chain management are not being widely adopted or having as big an impact as expected.

• Examples of underutilized practices include measuring and providing feedback on supplier performance, sharing planning information with suppliers, and documenting procurement processes and supplier relationships.

• A second study by the Hackett Group found procurement tools like barcoding, EDI, procurement cards, and blanket orders are also not being fully leveraged despite evidence they could realize cost savings and efficiency gains.

• Areas identified for improvement included increasing the use of strategic sourcing, focusing more procurement resources on higher value activities, and better centralizing negotiations to gain more leverage with suppliers.

• Overall the studies suggest companies are missing opportunities to optimize supplier management through not more widely applying established frameworks and performance metrics.

• The survey found that 76% of companies report low or low-medium utilization of single sourcing, while only 3% claim high usage.

• Procurement systems tend to be customized, complex and not highly integrated in most companies. The typical company has almost 30 procurement systems per billion dollars of purchased costs.

• The average age of procurement systems is just over seven years, so many companies are due to update their procurement infrastructure.

• Hackett recommends finding ways to boost procurement’s spending effectiveness by just 2%, which could increase shareholder value by $100 million for a company with $1 billion in purchased costs.

• Effective supplier selection and evaluation is important for supply chain management. Methods discussed include creating an information file on suppliers, reviewing management teams, and using a supplier benchmark audit to define standards to measure suppliers.

• A sample supplier benchmark audit questionnaire covers topics like quality assurance, technology, general management/financial, delivery, pricing and environmental safety. Scoring suppliers in different areas can help with evaluation and selection.

Here is a summary of key points about a purchaser’s responsibility regarding a supplier’s compliance with fair employment laws:

• A purchaser can be held responsible if an employee reports harassment from a supplier’s salesperson and the purchaser fails to promptly investigate and address the issue. Purchasers should have a clear anti-harassment policy communicated to suppliers.

• Harassment of a supplier’s employees by the purchaser’s employees should also not be tolerated and there should be a procedure for suppliers to report such incidents.

• Contracts with suppliers doing work on-site should prohibit drugs and allow drug testing to ensure a drug-free workplace.

• Facilities used for company functions, including those off-site, must comply with the Americans with Disabilities Act (ADA) regarding accessibility. Construction contracts should account for ADA specifications.

• While not legally required, some companies include provisions in supplier contracts allowing termination for non-compliance with fair employment laws as a business decision.

• In general, purchasers are not responsible for policeing suppliers’ fair employment practices, but communication of policies and procedures can help avoid liability issues regarding harassment or discrimination. Consulting legal counsel is advised when such issues arise.

• Under government contracts, you are legally obligated to get suppliers to confirm they do not discriminate and may need proof of affirmative action programs.

• For commercial contracts, there is no legal requirement to monitor supplier equal opportunity compliance. However, buyers should still exercise caution, especially regarding illegal immigration or child labor issues.

• One suggestion is to include contract clauses stating suppliers will comply with fair employment laws. This allows negotiation leverage rather than active policing.

• For contractors working on company property, options are to do nothing, include drug-free workplace provisions, or require drug testing certifications.

• Supplier scorecards can help transition procurement from transactional to strategic by comprehensively measuring supplier performance over time.

• Elements typically include quality, delivery, costs, service, and subjective ratings. Meetings review performance trends and set goals.

• Scorecards are most effective for key, strategic suppliers that account for high spend or returns, not every supplier. They promote continuous improvement.

• Scorecards provide procurement visibility to management on contributions to customers. Meetings include high-level supplier and company executives.

• The executive supplier review is meant to provide an executive-level forum to discuss the overall business relationship between the company and its suppliers in the context of total cost of ownership and mutual competitiveness.

• Williams notes that the scorecard process for evaluating suppliers is evolutionary - it is always changing and the company is always revising it and raising the bar for suppliers.

• The insights provided give examples of how different companies work to improve customer satisfaction of their internal customers by establishing goals, processes, cross-functional teams, and obtaining feedback from customers on performance. This includes sharing results of customer satisfaction surveys.

• A supply chain audit methodology is described that can help managers assess the current state of their supply chain and identify improvement opportunities by benchmarking performance against best practices.

Here are the summaries:

Q2: What bus routes should exist route should exist? This question is asking for recommendations on what bus routes should be implemented.

Q3: Where should existing bus routes be expanded to? This question is asking where the existing bus routes should be extended to reach more areas.

Q4: What route changes would improve bus service? This question is asking for recommendations on how to change existing bus routes to better improve the bus service.

Here is a summary of key points from the provided text:

• Several companies implemented processes to consolidate and reduce their supplier bases in order to leverage spending and obtain better pricing, services and performance from suppliers.

• One company formed commodity teams to select key suppliers and develop strategic partnerships. This resulted in 20-30% price reductions and improved service levels.

• Another company shared manufacturing resource planning (MRP) data with major suppliers to coordinate production planning. This reduced inventory levels for both parties.

• One firm educated purchasing staff on supplier relationships before consolidation to overcome cultural barriers. Gradually reducing the supplier base resulted in 5-15% savings.

• Switching to distributors consolidated purchasing from hundreds of manufacturers. This streamlined procurement and allowed branches to focus on core operations.

• Increasing volume with a smaller group of approved suppliers boosted leverage to negotiate better terms from suppliers.

• Implementing full supply chain integration and rationalizing the supplier base freed up buyer time and further reduced costs.

• Successful consolidation programs involved cross-functional analysis, supplier visits, structured negotiations and multi-year agreements to optimize the supplier portfolio.

• Companies are focusing on consolidating requirements from multiple sites to reduce supplier bases and get better pricing. One company consolidated 6 sites’ spending on chipboard and achieved a 46% cost reduction.

• Some companies are instituting supplier-managed in-plant stores to consolidate MRO suppliers. One company reduced 240 MRO suppliers down to one, saving $100,000 annually.

• Reducing supplier bases increases leverage with remaining suppliers. One materials manager said reducing suppliers improved leverage to demand lower costs.

• Long-term agreements with fewer suppliers provide more leverage in negotiations. One company reduced PCB suppliers from 26 to 5, achieving 15% savings.

• Global sourcing/shifting to foreign suppliers is becoming more popular. Some companies reported 40-56% savings from moving items offshore.

• There is a renewed focus on strengthening supplier quality and certification programs. Many companies cited these practices as ways to improve supply chain costs and performance.

• Supply chain management practices are making rapid progress, with more organizations actively pursuing total supply chain management initiatives.

• Implementing purchasing cards (P-cards) has been a successful cost control technique for many, allowing organizations to reduce purchasing and accounts payable transactions by up to 40%. P-cards improve lead times and reduce paperwork.

• Using cross-functional teams and involving suppliers earlier in the design process have potential benefits, but adoption of these practices has been slower than expected. Those using them report benefits like avoiding costly design decisions and better focusing on issues affecting various functions.

• Reducing the supplier base remains a top focus, but objectives have expanded beyond just lowering costs. Goals now include supporting continuous improvement, reducing total cost of acquisition, freeing up buyer time for strategic work, enabling longer contracts through global consolidation, removing redundant suppliers to save costs, improving specifications through closer supplier relationships, and reducing inventory. Cross-functional teams also help “right-size” the supplier base.

• A plant buyer at a small specialty chemicals maker found that reducing the supplier base enabled stronger relationships with remaining suppliers. Materials are now delivered more frequently with less on-hand inventory. The buyer also has more time to learn about each supplier’s capabilities.

• A large frozen foods producer reduced their supply base in one area from five suppliers to two over three years based on meeting success criteria. This resulted in $6 million in savings.

• Strong management support and cross-functional teams were key to the success of the supply base rationalization process. There was initial skepticism but accounting teams for supplier selection helped ensure accountability and success.

• Internal customers now accept supply base rationalization as an ongoing initiative after initial doubts. Stronger supplier relationships and performance are now possible due to improvements from reducing the number of suppliers.

• In 1998, Vermeer reorganized their procurement function by forming a corporate-level procurement group to set strategy and policy. They created six new supplier alliance specialist positions focused on negotiating agreements with select suppliers.

• Previously, each factory purchased the same materials like steel from different suppliers at different prices. Now, Vermeer consolidates to two steel suppliers with consistent pricing.

• Supplier alliance specialists engage directly with suppliers instead of handling purchase orders. The number of suppliers has been reduced from 4,000 to 2,000.

• Key performance metrics like on-time delivery, quality, and total cost are measured. Supplier report cards and a value-based performance index are used.

• Suppliers are given more opportunities for involvement through activities like kaizen events at Vermeer and supplier facilities to reduce costs further.

• The reorganization has resulted in cost savings through consolidated sourcing and performance management of key suppliers. Communication was important to help internal stakeholders understand the changes.

• Developing strong supplier relationships takes time and investment from both the buyer and supplier. Terry Sueltman of Honeywell recommends pursuing longer-term (2-3 year) relationships where the supplier’s business is expected to grow with the buyer’s.

• Honeywell’s “resident supplier” concept integrates key suppliers physically and strategically into the business to generate additional value beyond a traditional supplier relationship. However, it takes effort to get full acceptance of this model internally and ensure the relationship continues adding value over time.

• Communication is critical to the resident supplier model. Honeywell shares a lot of internal business information with resident suppliers and involves them in meetings to build understanding and trust.

• At Hennessy Industries, buyers are now responsible for suppliers’ quality performance. Buyers must help suppliers improve or find new suppliers. Formal 8D corrective action is required from suppliers for quality issues.

• Hennessy uses a supplier development program to qualify suppliers as “approved”, “preferred” or “certified” based on performance metrics. Buyers are responsible for auditing and progressing key suppliers through this program.

• Buyers also coach suppliers on Hennessy’s use of kanban for just-in-time production to lower inventory levels and increase delivery reliability.

Here is a summary of the key points about Hennessy’s delivery of products to customers:

• Hennessy teaches suppliers about implementing kanban delivery processes to help lower inventory levels and ensure consistent just-in-time delivery of parts. This also helps suppliers manage their own production levels.

• Suppliers with long lead times must either reduce lead times or carry some finished or semi-finished inventory to meet Hennessy’s lead time expectations. Hennessy works with suppliers to improve processes and avoid increasing overall inventory.

• Hennessy’s buyers consider total costs, including delivery costs, inventory holding costs, quality costs, lost time costs from poor supplier performance.

• The goal is to drive improvements in quality, delivery, and cost reduction at supplier sites through coaching and minimizing the supplier base to focus efforts.

• Continuous improvement is expected from suppliers to continuously reduce costs through process improvements, materials cost reductions, quality cost reductions.

• Hennessy shares business changes with suppliers and sources from a single supplier to minimize inventory and coordination costs. The focus is on total cost improvement and management throughout the supply chain.

• One of Sun’s supply chain strategies is having customers directly talk to suppliers to remove Sun from the process and improve response time. This bridges the gap between suppliers and customers.

• When an order comes in, Sun sends it directly to the supplier to fill. Suppliers have access to Sun’s inventory to take time out of the fulfillment process.

• Within 3 years, Sun aims to have zero warehouses by having components merge during transit between multiple suppliers needed to fill one order. This will require stronger IT and logistics.

• The “one-size-fits-all” approach was hurting Sun. Different products need different delivery methods based on factors like geography. A flexible approach is needed to meet rising customer demands around cost, availability, and delivery speed.

• The passage discusses how Pioneer-Standard, an electronics distributor, has implemented supply chain management strategies to address competitive pressures around cost containment, differentiation, and increasing sophistication.

• It focuses on three key areas: developing a new mindset of an extended supply chain enterprise, cultivating new partnership-focused business processes and relationships, and investing in technology to automate processes and connect supply chain members.

• Examples given include helping a large contract manufacturer simplify component ordering and forecasting, providing electronic order quoting and potentially managing their warehouses. This benefits all parties by lowering costs, simplifying procurement, and improving lead times.

• Technology is seen as an enabler if it can accommodate different transaction types across day-to-day, planning, and strategic activities. Pioneer-Standard’s online tools provide customers real-time order visibility.

• Through these SCM strategies, Pioneer-Standard has increased its sales per employee by over 35% in three years, demonstrating how distributors can strategically integrate themselves in the supply chain process.

An e-commerce company helps customers track orders placed through various sales channels using an automated email program. It also facilitates information sharing and product movement through the supply chain via EDI connections with suppliers and customers. The company provides warehouse management software to help customers automate ordering and inventory processes.

The company believes its supply chain strategies will reduce costs for customers in areas like acquisition, manufacturing time, and time to market. It will also improve customer access to new products/tech and supplier access to new markets/customers. For the company, supply chain management has made internal processes more efficient and responsive to customers.

The software analyzes item-level demand data to determine the optimal inventory levels needed to meet a 98.5% customer service level with 40% less total inventory. This resulted in annual inventory cost savings of nearly $30 million for the company within 6 months of implementation. The system optimizes the trade-off between inventory levels, inventory turns and customer fulfillment rates.

• LogicStock calculates stocking quantities to maximize availability per cost, considering various constraints and specifications. It has flexibility to incorporate multiple variables into the model.

• Variables considered include business environment, customer demand patterns, item characteristics, supply strategy, financial objectives like inventory turns.

• GTE Supply used LogicStock to examine inventory stocking issues and determine optimal stocking levels while maintaining a 98.5% service level at lowest cost.

• A pilot revealed 300 items that were greatly misaligned with the suggested stocking strategy. Focusing on these high impact items reduced inventory levels by 30-40% while maintaining service levels.

• Expanding LogicStock to other business units also yielded inventory reductions and improved turns, with no changes needed to the existing supply chain.

• Key benefits included 30-40% inventory reduction, 98.5% item availability, reduced costs, improved turns from 3.3 to 7.3 annually. LogicStock reports helped planners focus on high impact areas.

A pharmaceutical company worked to improve its supply chain processes and relationship with suppliers in order to achieve 95% on-time delivery. They focused on improving data accuracy in their MRP system, updating lead times, correcting past due purchase orders, and ensuring accurate bills of materials.

They also made changes to how they work with suppliers. This included improved communication, setting clear on-time delivery goals, developing strategic supplier partnerships, creating a supplier planning report to provide visibility into upcoming orders, and changing supplier behavior by requiring them to communicate delays. Working closely with suppliers through quarterly meetings, sharing forecasts, and allowing raw material purchases in advance helped suppliers meet lead times and delivery requirements. The efforts stabilized key performance metrics and helped the company achieve MRP class A certification. Strong cross-functional leadership was also important for success.

Daniel described how Sikorsky Aircraft improved supplier on-time delivery performance from 70% to 95% through two parallel improvement paths.

The first path involved directly communicating expectations to suppliers and closely monitoring their performance by calling suppliers weekly about upcoming orders. The goal was to change supplier behavior through continual follow up until performance improved.

The second path involved improving Sikorsky’s internal data systems and developing better relationships with suppliers. After completing both paths, on-time delivery reached 95%.

Key steps in Sikorsky’s supplier kaizen process included:

• Selecting suppliers for improvement projects based on purchasing manager and commodity team input.

• Planning kaizen events by identifying opportunity areas, gaining supplier management support, and creating project plans.

• Conducting multi-day workshops at supplier plants to analyze processes and identify improvements.

• Following up to ensure benefits were realized and continuous improvement continued.

Over 40 suppliers participated in the program, resulting in millions in savings and substantial lead time reductions through process improvements. The goal was to develop world-class, continuously improving suppliers.

• Lifetime Products, a basketball equipment manufacturer, had issues with wasteful inventory levels and material shortages. The materials department lacked focus and disciplines.

• The company hired more people and implemented materials management disciplines, which helped but didn’t solve the deeper issues.

• They analyzed the interrelationships between purchasing, inventory control, and quality control. Purchasing relies on inventory data and wants quality issues addressed.

• The company restructured the materials department by creating commodity procurement teams led by purchasing agents. This helped eliminate silos and created a “we” environment.

• Each team is responsible for the entire materials process for their commodity, from sourcing to delivery. This aligns them with Lifetime’s technology improvement teams.

• The changes improved communication, consistency, and allowed purchasing to impact other functions like inventory and quality.

• Metrics like inventory accuracy, inventory levels, and on-time delivery improved. Staff was reduced. Buyers could focus more on strategic sourcing.

• The summary discusses Porter-Cable Corporation sharing production schedules with suppliers and transferring scheduling responsibility to them. They created reports to facilitate this.

• The eet report contains lot sizing calculations for trailer loading in addition to the standard summary sheet information. It can be used by production control for lot sizing or warehouse/shipping for order picking and filling.

• Some Porter-Cable suppliers build to stock using the blanket order information. They use the final loading report to complete orders.

• The item master includes box or skid quantities, which determine the minimum lot size. If both are provided, the skid quantity is used. If only the box quantity is given, it is used instead.

• Steelcase developed a cross-functional strategic sourcing capability through their leadership system process focus. They organize using supply chain, new product development, and operational excellence process teams involving different functions.

• Examples provided show how cross-functional teams successfully developed a supplier certification program and integrated sourcing into new product development through their process.

• Steelcase exceeded their $100 million cost reduction goal through their Continually Advance Supplier Excellence program developed by a cross-functional team including suppliers.

• Dun & Bradstreet transformed their purchasing operation through strategic sourcing, reducing suppliers from 8,600 to 3,000 and staff from 70 to 14 while achieving $8.3 million in savings.

• Douglas Greene, global purchasing director at Dun & Bradstreet, overhauled the company’s purchasing process, unlocking significant value.

• Through initiatives like centralized purchasing, cross-functional teams, strategic supplier relationships, and data-driven decision making, they cut costs and improved efficiency. Paper invoices were reduced from 86,000 to zero at focused suppliers.

• Key was having the “courage to critique” their existing system honestly. It was an “uncoordinated mess” previously.

• The transformation provides a case study in reorganization and refocusing purchasing functions.

• Harley-Davidson is working with suppliers through NISCI’s supply chain integration process to build trust and cooperation between Tier 1, 2, and 3 suppliers. This includes mapping the value chain and holding a “Cooperation Day” meeting to surface issues. The goal is to improve performance across the full supply chain.

The passage summarizes Sequent Computer Systems’ new supply chain management approach of separating strategic and tactical functions.

Some key points:

• The strategic side focuses on long-term supplier relationships and corporate supply chain goals. The tactical side handles day-to-day execution.

• Strategic sourcing manages supplier strategies and development, while tactical activities like order placement report through different functions.

• They have a small number of preferred suppliers for each service type to reduce costs. Long-term contracts of 3+ years provide stability.

• Regular performance reviews and metrics are used to monitor suppliers. Suppliers also provide feedback on Sequent’s performance.

• Overcommunication is emphasized to ensure understanding across company/supplier divide.

So in summary, it describes how one company separated strategic and tactical supply chain management functions, established long-term preferential supplier relationships, and implemented a formal process of monitoring performance and receiving feedback to strengthen relationships and benefits for both parties.

• The company is surveying its suppliers to evaluate their quality systems and processes based on QS 9000 requirements. The goal is to classify each supplier’s quality level compared to minimum standards.

• Suppliers will be asked to conduct a self-evaluation by completing a survey within a deadline. Non-responsive suppliers will receive phone call reminders and may be warned of losing future business from the company if still non-compliant.

• The supplier evaluations aim to provide a realistic assessment of quality levels. Previous experience found suppliers to be hard on themselves in self-evaluations.

• The survey contains 9 sections rating different quality aspects like documentation, inspections, corrective actions, etc. on a scale of 0-5. Scoring guidelines are provided.

• The company is prepared to help suppliers establish improvement processes to meet higher quality levels required by the new standards. Cooperation from all suppliers is expected for the evaluation effort.

Here is a summary of key points about AB certification:

• AB certification is a third-party certification for management systems. It focuses on quality, environmental, safety, and other aspects of business operations.

• The certification is granted by accredited certification bodies after an audit to verify the organization has implemented an effective management system that meets the requirements of the applicable standard, like ISO 9001 for quality management.

• Common standards AB certification is granted against include ISO 9001, ISO 14001, and OHSAS 18001. These cover quality, environmental, and occupational health and safety management respectively.

• Obtaining AB certification demonstrates to customers and other stakeholders that key business processes and systems have been established, documented, implemented, maintained and continuously improved.

• It is a way for companies to ensure their operations meet globally recognized standards and best practices. It can boost credibility and open doors to new business opportunities.

• Maintaining the certification requires ongoing compliance to the standard through internal audits, management reviews, and periodic external surveillance audits by the certifying body.

So in summary, AB certification is a third-party audit process that verifies a company has established and is maintaining an effective management system aligned with international standards for quality, environmental, safety or other aspects of operations.

• A partnership between an electronics manufacturer and a PCB manufacturer helped the PCB manufacturer develop quality programs and standards. This resulted in significantly lower prices for the electronics company as the PCB manufacturer improved their yield.

• Building strong supplier partnerships and transforming them into supply chains provides competitive advantages by leveraging suppliers’ capabilities. True strategic partnerships are characterized by synergy, collaboration, shared benefits/risks, common goals, trust and communication.

• Moving supplier partnerships into a supply chain involves aligning objectives, developing a shared vision and strategy, collaborative planning, sharing information, common systems/processes, performance measures, and continuous improvement.

• An important change is sharing schedules with suppliers. This allows suppliers to reduce finished goods stock and costs by working with real demand instead of forecasts. Schedule sharing agreements work best with guarantees to purchase called inventory.

• Continuous assessment and improvement are needed to balance supply chains with changing customer demand. Gap analyses identify where companies need to improve competitiveness through benchmarking industry standards.

The key points are:

• Performance metrics should measure the impact of different supply chain nodes on each other to encourage synchronization rather than individual optimization.

• Old metrics like purchase price variance are no longer adequate. New metrics like quality of demand plans and flexibility are suggested.

• Information availability and the ability to interact with external partners is critical for survival. Companies must assess how to improve their internal information systems and external partner interactions.

• A joint service agreement can be an effective tool for cementing supplier-customer relationships by describing responsibilities, expectations and entitlements of both parties. However, it’s not needed for every supplier relationship.

• Developing a JSA promotes clear objectives, reveals inefficiencies, and provides a foundation for supplier management training and review processes. The negotiation process of a JSA also strengthens the relationship.

• A significant price increase or change in pricing structure by the supplier may be warranted if service level agreements are consistently not being met or quality issues exist. The client may be receiving daily calls about quality and technical issues with the supplier.

• Consult groups and departments that could be affected by a supplier change. Find out the impact on their processes and communicate this and potential costs of changing suppliers to management.

• Construct a pros and cons list of staying with or changing the supplier relationship. Consider costs of changing and resources used to maintain the current relationship.

• If pros of staying are greater, create a joint action plan to address concerns and improvement steps. Include timelines and measurements.

• If cons of staying outweigh pros, issue a request for proposal to select a new supplier. Do not terminate the current supplier relationship until a new partner is selected.

• Involve end users in the decision making process as their input initiated discussions. Get their buy-in on alternatives.

• Consider legal, confidentiality and intellectual property issues when terminating a supplier relationship.

Here are some key points about how supply chain management expertise can provide value:

• Conduct supplier performance evaluations to assess key criteria like quality, reliability, documentation accuracy, responsiveness, etc. This helps ensure suppliers meet standards.

• Define key performance metrics to effectively manage the supplier performance process. Things like on-time delivery, quality levels, responsiveness, etc. should be measured.

• Classify suppliers based on factors like spend volume and review them at different frequencies (e.g. large suppliers quarterly, small suppliers annually) to focus efforts where most needed.

• Encourage continuous supplier improvement through self-assessments and action planning when issues arise. Work collaboratively with suppliers to boost performance over time.

• Develop structured processes for managing relationships with strategic/top suppliers through regular communication, performance reviews, problem solving, goal setting, etc.

• Leverage supplier certification programs to clearly define requirements and drive quality improvements throughout the partnership lifecycle.

• Create synergies between procurement and logistics functions through collaboration, clearer role definitions, shared goals, improved information sharing, etc. to optimize the overall supply chain.

• Several e-procurement sites are listed that can help with sourcing, including Sourcing Net, PurchasingCenter.com, SupplierMarket.com, Virtual Source Network, ShareMax.com, and E-SupplierLink. They provide features like supplier directories, RFQ tools, and supply chain collaboration.

• Les Artman discusses five levels of procurement sophistication, from individual user groups to fully optimized procurement integrated with the supply chain. More companies are integrating procurement and supply chain to create synergies like shared information, joint performance measurement, and considering total landed costs.

• Suppliers are increasingly asked to provide feedback to buyers in “report cards” to promote cooperation. It can be difficult to get honest feedback at first. Companies emphasize they want real feedback to improve their business practices and make it easier for suppliers. Examples of feedback topics and report card formats are described from several companies.

This summarizes key points from four presentations at a purchasing conference on supplier development strategies:

• Lorrie Mitchell recommends using a supplier technical/capabilities questionnaire with open-ended questions to evaluate suppliers based on capabilities rather than just price.

• Wayne Riley says buyers should analyze how well a supplier’s manufacturing and technology align with their own to ensure long-term fit. Suppliers should be evaluated on production structure compatibility in addition to capabilities.

• William Wehr describes a supplier partnership management process used by Lewis-Goetz to set performance goals, address issues, and improve partnerships over time through communication and accountability.

• George Harris advocates developing partnerships with a few key suppliers through a four-step process involving assessment, partnership formation, execution, and review to streamline relationships.

The overall message is that effective supply chain management requires streamlined, partnership-based relationships with suppliers through open communication, goal-setting, alignment evaluation, and long-term commitment on both sides. Selection should be based on capabilities rather than just price.

The passage discusses the importance of putting terms of partnership agreements with suppliers in writing. This is recommended as procurement and supplier management personnel often change roles and locations over time. Key details that should be captured in writing include measures of supplier performance, processes for periodic evaluation, and terms that will survive any personnel changes. This helps minimize risks for the buying organization when optimizing the supply base, such as becoming overly reliant on a single supplier. Putting the agreement details in writing helps ensure the partnership terms are maintained despite changes to the people originally involved.

The article discusses the importance of supplier partnerships and alliances for purchasing managers. It reports that over a third of survey respondents are focused on establishing new supplier partnerships. Creating these relationships helps companies achieve long-term supply chain management goals by reducing costs, improving quality, and enabling initiatives like inventory reduction and JIT delivery.

The article provides examples of how different companies have benefitted from supplier partnerships, such as establishing long-term agreements, sourcing from industry-leading global suppliers, involving suppliers in engineering issues, and openly communicating company needs. It also notes that while materials partnerships have succeeded, service provider alliances should not be overlooked.

Finally, it offers advice on developing effective service alliances, including identifying mutually beneficial partners, creating a total cost model, clearly defining roles, developing evaluation measures jointly, and establishing formal communication systems. The key takeaway is that supplier relationships need to provide value to both parties to be sustainable long-term partnerships.

The passage discusses the importance of periodically reviewing and revising purchase order terms and conditions. Purchase order terms and conditions are legal documents that can range from simple statements to comprehensive documents covering all possibilities. Establishing a “good” set of terms and conditions is important. Examples of terms and conditions are provided from a legal adviser publication to serve as a foundation for companies to draft their own customized terms that fit their requirements, with consultation of corporate counsel. Key points are that purchase order terms set the legal parameters of agreements and should be tailored for each company while accounting for standard legal considerations. Regular review allows terms to be updated as needed over time.

• The terms and conditions outlined in a purchase order or invoice from either the seller or purchaser will be superseded by the terms and conditions outlined here. By shipping goods or providing services after receiving a purchase order, the seller agrees to be bound by these terms and conditions.

• The price will be what is stated in the purchase order, unless that price exceeds the seller’s lowest price to other customers at the time of delivery. In that case, the lower price controls. If no price is stated, the seller cannot charge more than the last quoted or charged price to the purchaser.

• Drawings, specifications, and technical data provided by either party are incorporated into the contract. The seller is responsible for ensuring items comply with requirements. The purchaser retains ownership of documents provided and the seller cannot disclose them without permission.

• The purchaser can make changes to items, specifications, delivery details, etc. by written notice. The seller must comply with changes immediately even if adjustments to cost or schedule are not agreed upon.

• The seller must deliver items by the date(s) specified. Failure to deliver on time allows the purchaser to terminate the contract. Risk of loss remains with the seller until items are received by the purchaser.

• The seller provides various warranties regarding the merchantability, fitness for purpose, quality, and compliance of items with specifications and standards for 4 years after delivery. The purchaser can require the seller to repair, replace, or re-perform at the seller’s expense if items are defective.

• Payment terms are as specified in the purchase order. Invoices cannot be issued before shipment/delivery. The purchaser can withhold payment to protect itself from financial or contractual issues by the seller.

• The current situation is that purchasing professionals face uncertainty about their future roles as e-procurement and supply chain exchanges develop. Some argue these technologies could replace purchasing roles, while others see opportunities.

• The defined problem is determining how purchasing can adapt and leverage new technologies rather than be replaced by them. Specific concerns include maintaining strategic supplier relationships and expertise rather than just handling clerical tasks.

• The recommendation is for purchasing to embrace new technologies but not let them depersonalize supplier relationships or diminish purchasing’s strategic influence. Purchasing should guide management on supply chain management and become experts on how to properly use exchanges.

• The vision for the future is for purchasing to broaden its role to total supply chain management and free up time from clerical work to focus on strategic planning and supplier partnerships. E-procurement can strengthen purchasing if properly implemented with supplier ownership of data and equitable sharing of savings.

• The supplier’s perspective is acknowledged, that exchanges must operate independently and protect proprietary data to maintain supplier trust. Savings from higher volumes must also be shared across the supply chain.

• Anticipated objections focus on technologies not fully replacing personal relationships and knowledge. Exchanges still require strategic sourcing skills and management of supplier partnerships. Indexes and averages may not apply to specific supplier cost structures.

• The proposed strategy is for purchasing to educate senior management on supply chain advantages and guide proper exchange implementation to maximize benefits for both buyers and suppliers. By embracing change constructively, purchasing can evolve its role and expertise.

• Stallkamp instituted a practice at Chrysler of having open access to industry suppliers through web procurement portals, rather than company-specific portals. This allowed all competitors to see what Chrysler was buying.

• Web procurement portals can reduce costs, time, and errors associated with clerical transactions like vendor selection, ordering, and payment processing. Goldman Sachs estimated procurement costs could be reduced by a third through web-based systems.

• However, Stallkamp believed the future opportunity was in true supply chain management beyond just purchasing - areas like strategic buying, production planning, inventory management, demand forecasting, and customer service.

• He viewed the supply chain not as a horizontal line of links, but as a vertical “X” with control at the intersection point. The internet could help connect all the various links in the supply chain.

• Relationship management is still important - the internet should not be allowed to depersonalize supplier relationships, which are the responsibility of purchasing/supply functions.

• The key was rising above just using web procurement for cost reductions and clerical efficiencies, to a higher level of managing supply relationships strategically through communication, planning and financial skills.

Here is a summary of the key points regarding agreed-upon service levels:

• Service level agreements (SLAs) define the performance and quality standards for a service. They establish expectations between a service provider and client.

• Common elements of SLAs include uptime percentage, response times, support coverage (hours, days of week), problem resolution and escalation procedures.

• SLAs help ensure services are provided as expected. They provide recourse if minimum standards are not met, such as service credits or contract termination.

• During procurement, the service provider and client negotiate the specific performance metrics and consequences of under-delivery prior to signing an SLA.

• Once operational, service performance is measured against the SLA. Issues are resolved per escalation processes defined in the agreement.

• Periodic reviews check that the SLA still aligns with business needs. It may be renegotiated over time if service priorities or requirements change.

So in summary, agreed-upon service levels refer to the minimum performance standards for a contracted service as outlined in a service level agreement between the service provider and client.

Here is a summary of the key points about e-purchasing solutions from rchasingNet.com:

• SourceTrack provides an e-purchasing service that allows middle market businesses to purchase operating resources like office supplies, computer supplies, and maintenance/repair/operations (MRO) items online. It offers shopping, approval workflows, and electronic ordering/confirmation. Setup fees are $20,000 and monthly fees are $1,000.

• SupplierMarket.com upgraded their online marketplace for direct materials to version 4.5. New features include commodity templates for supplier registration and a field for value-added services. It also added two analytical tools.

• SupplyWorks MAX is an e-procurement solution that streamlines purchasing for discrete manufacturers. It offers electronic purchasing, order status tracking, an intuitive interface, customizable fields, and approval workflows. It integrates with ERP systems.

• The article provides an introduction to new e-purchasing solutions showcased at an APICS conference, including products from Ariba, Aspen Technologies, CastaLink, DWL, ECOutlook, Eventra, Great Plains, J.D. Edwards, Logility, and Moai Technologies.

Here are the key points from the summaries:

• LiveEnchange has enhanced its structured negotiation features in version 3.5 to enable complex online negotiations on multiple transaction parameters and multistage negotiations.

• PeopleSoft Supply Chain in a Box is a preassembled pure internet supply chain solution that provides integrated applications for customer management, eCommerce, order fulfillment, planning, and supply chain analytics. It also integrates supplier management applications like sourcing, supply planning, account settlement, and product lifecycle management.

• RightWorks launched a new eBusiness Applications Suite that provides end-to-end eProcurement including vendor selection/management, purchase order management, and analytics for spend management.

• SupplyWorks introduced Release 2.0 of its SupplyWorks MAX solution for streamlining direct eProcurement for discrete manufacturers. New features improve procurement planning collaboration and order execution.

• Mobil’s successful 9-week eProcurement project involved determining objectives, selecting a cross-functional team, conducting a rigorous vendor evaluation, developing a business case, and recommending a pilot implementation to gain experience integrating with suppliers and systems.

• Quinn recommends running a pilot program with a potential e-procurement solution to understand how easy/difficult it will be to integrate the solution with your existing ERP system at scale with hundreds or thousands of suppliers. A pilot can show how long integration takes, what the real costs are, and how fully integrated it will be.

• It is important to test how easy/difficult it is for your buyers to actually purchase items after using the solution for 3-5 months. Their experience after extended use is more valuable than initial impressions.

• Setting up e-procurement requires developing a strategy to leverage the internet to improve supply chain operations and support e-commerce. Assess how online exchanges can help share information and coordinate processes rather than just focus on prices.

• Internal systems also need to be connected to trading partners’ systems to truly improve supply chain performance through electronic information and process sharing.

• E-procurement evolutions require proactive supplier qualification agreements tailored for online purchasing, ongoing performance management, and exception-based “hands-free” processes optimized by internet-native designs.

• Early adopters recommend getting senior management buy-in early, implementing change management, dividing projects into achievable parts, and continuous communication during implementation.

• Scope, partner selection with experienced individuals, and training are critical success factors to control for e-procurement projects.

• The article reports on research into current supply chain performance and integration of digital technology. It finds that while executives expect extremely high performance, few suppliers actually meet these expectations.

• Companies are ill-prepared to integrate digital technology and reduce cycle times to meet demand expectations. Only 4% of customers are completely satisfied with fulfillment performance.

• The research recommends developing more integrated supply chain processes responsive to demand with continually shortened lead times. Integration of process and technology is key to success.

• Internet technology is seen as crucial to achieving integration across the extended enterprise. While websites are common, innovative solutions integrating fulfillment, procurement, knowledge management are needed.

• Collaboration, outsourcing non-core functions, and improved communication through electronic means like the internet are trends expected to continue growing in importance for supply chain management.

• Effective e-purchasing requirements like security, catalog functionality, approval workflows, and reporting need to be considered carefully before implementation to reduce risks when transitioning processes digitally. Planning is important to do it right.

Here is a summary of the key points about preparing a supply chain for electronic trading exchanges:

• Companies should be working on readiness by focusing on a timeline for potential integration of exchanges and resolving issues like collaboration, standard practices, and taxonomy.

• Justify the use of exchanges based on the depth of services and set of benefits like visibility, planning, speed, logistics, transactions, and customer service.

• Business practices, processes, and supporting technology must be aligned to bridge information between internal systems and exchanges.

• Established relationships remain a priority, so exchanges should enhance rather than squeeze suppliers or compromise customer service.

• Consider building your own electronic portals if exchanges are not the sole or immediate solution for connectivity within the supply chain.

• Coordinate technology upgrades and integration timelines across trading partners to support connections to exchanges.

• Select exchange partners carefully based on credibility, stability, and services to meet supply chain needs over the long run.

So in summary, companies need to work on readiness, justify the benefits, align internal systems, prioritize relationships, potentially build their own portals, coordinate upgrades, and carefully select exchange partners.

Here is a summary of the key points about how web-based tools are fostering supply chain collaboration according to the provided text:

• Internet/web technologies allow companies to collaborate more effectively with supply chain partners on product design and development, helping to customize products to customer demands more quickly. Technologies like product design portals facilitate this.

• Collaboration tools like web-based CPFR (collaborative planning, forecasting and replenishment) strengthen customer relationships by sharing forecast and order information.

• Extranets provide similar benefits to EDI (electronic data interchange) but are easier and cheaper to implement. They allow partners to share information and monitor orders/performance.

• Intranets support purchasing programs by giving suppliers access to order/scheduling information from buyers. This improves coordination and reduces costs.

• E-marketplaces lower procurement transaction costs by facilitating buying/selling between multiple buyers and sellers online.

• Leading companies collaborate online to synchronize fulfillment of e-commerce orders, ensuring orders are fulfilled on time even as fulfillment remains a physical process. This reduces order-to-delivery times.

In summary, web technologies are fostering supply chain collaboration through tools that facilitate joint product development, demand forecasting, operational data sharing between partners, online purchasing/sourcing, and order fulfillment synchronization. This leads to benefits like faster innovation, improved customer service, lower costs and times.

• Web exchanges can help synchronize suppliers and provide order visibility over the internet. Order visibility exchanges (OVEs) specialize in supply chain event management and giving companies more control over production replenishment.

• OVE functionality expands the number of suppliers a company can connect with electronically and can migrate existing EDI connections to the internet.

• Kaman Aerospace is using Eventra’s OVE solution to manage planning, forecasting, and collaborative supplier communications electronically. Previously all transactions were done by phone, fax, or mail.

• Eventra had to interface its system with Kaman’s legacy system. Kaman piloted with 15 suppliers and plans to increase to 40 suppliers by end of year, ranging from small to large parts suppliers.

• Network Appliance is using WorldChain’s solution to manage ordering, shipping, and delivering spare parts inventory worldwide over the internet for improved visibility and connectivity with trading partners globally.

This summarize provides an overview of key points from the given text:

• Network Appliance is implementing WorldChain’s hosted solution to improve customer service and support by providing real-time visibility into outsourced partners’ data and processes. This will help meet service level agreements and customer expectations.

• WorldChain’s solution will integrate with Network Appliance’s website for customers, the company, and service partners to securely view, verify, and control supply chain information. This will automate processes and enhance customer satisfaction.

• The text then describes four types of order management an online vendor exchange (OVE) can provide: data translation, transaction management, notification/alerts, and analytics.

• It discusses several new Internet-based logistics solutions including NextLink for global shipment tracking, I-Deliver for real-time tracking and proof of delivery, and Shipping Solutions 2000 for automating export documents.

• These new solutions aim to streamline supply chain management tasks like transportation, documentation, tracking, and provide benefits like lower costs and increased access over traditional customized systems.

• ShipLogix is collaborative Web-based software for managing transportation operations between shippers, carriers, and third-party logistics providers.

• The first version will feature electronic load tendering, shipment status tracking, and electronic invoicing. Each trading partner needs a PC and web browser to access it for a nominal monthly fee.

• Additional network licenses for additional workstations are $200 per workstation. The initial software license is $2,495.

• The company providing this software is InterMart, Inc., located in Eagan, MN. Their contact information is provided.

So in summary, ShipLogix is collaborative transportation management software that allows electronic communication between shippers, carriers and 3PLs for a monthly fee. The initial license is $2,495 with additional workstation licenses available for $200 each.

Here is a summary of the key points from the provided text:

• It mentions various logistics and supply chain software, technologies, and service providers such as Ariba, SAP, i2 Technologies, Manugistics, JDA Software, Oracle, Baan, etc.

• It discusses logistics concepts and frameworks such as collaborative planning, forecasting and replenishment (CPFR), distribution resource planning (DRP), distribution requirements planning (DRP), efficient consumer response (ECR), continuous replenishment planning (CRP), etc.

• It references research studies, white papers, reports and surveys from organizations like Gartner, AMR Research, Forrester Research, CSC Index, etc. on topics like e-business, e-commerce, benchmarking, best practices, etc.

• It provides examples of logistics/supply chain initiatives, strategies and technologies adopted by major companies like Dell, Procter & Gamble, Walmart, Caterpillar, Compaq, Boeing, Toyota, etc.

• It mentions logistics/supply chain conferences, publications, associations and certification programs like CLMP, APICS, CLM, Tompkins, CAPS, etc.

• In summary, it covers a broad range of logistics/supply chain software, concepts, case studies, research and industry trends with references to many vendors, technologies and organizations.

Here is a summary of the key points about the companies and concepts mentioned:

• EDS (Electronic Data Systems Corp.) provides IT services including ERP systems.

• Descartes Systems Group provides supply chain software and logistics management services.

• Efinity and eFulfillnow are e-fulfillment companies that help with order fulfillment.

• Ng e-Fulfillment discusses the importance of e-fulfillment.

• ERP (Enterprise Resource Planning) software is important for supply chain management and integration across functions. Popular ERP vendors mentioned include SAP, Oracle, Lawson, Glovia.

• Concepts like eSCM (electronic supply chain management), fourth-party logistics, RFID, and warehouse management systems can improve supply chain functions.

• Industry leaders discussed include GE, GM, Ford, P&G, Pillsbury, who are implementing advanced supply chain initiatives.

• Consultants and market research firms provide insights into best practices, including Hackett, KPMG, Forrester Research, Gartner.

• Transportation and logistics software/service providers mentioned are Descartes, i2, EXE, SAP, Transplace, Manugistics.

• Key themes are digital transformation of supply chains, use of technologies like ERP, RFID, IoT, and strategic partnerships for improved integration and visibility.

Here is a summary of the key points from the list:

• Many companies and organizations are mentioned that are involved in logistics, supply chain management and related fields. This includes large corporations, consulting firms, software/technology providers, and academic institutions.

• A wide range of logistics/SCM concepts, methodologies, and initiatives are covered. This includes JIT, lean manufacturing, quality standards, logistics outsourcing, materials management systems, forecasting approaches, and industry associations.

• Specific software solutions, technologies and online platforms are listed. These span warehouse management systems, transportation management,spend management, forecasting, procurement, and e-marketplaces.

• Industry reports, case studies, books and other reference materials on various supply chain and logistics management topics are mentioned.

• Details provided for some include company descriptions, implementation examples, product versions, and in some cases pricing or client information.

So in summary, the list encompasses a broad cross-section of organizations, concepts, technologies and references within the supply chain and logistics domain. It touches on many different elements involved in planning, executing and analyzing modern supply chain networks.

A Real-Time Locating and

Warehousing, 1–5, 9–12, 14–16, 30–31,

Inventory Management Solution, 344

49–50, 54–57, 59–62, 71, 84–87, 90–92, Warehousing Education & Research Council,

95–96, 124–26, 149–50, 157–58, 161,

30, 98, 185, 798, 804

166, 170–72, 177, 182, 188–89, 194,

Warex, Inc., 211, 635

200–201, 204, 210, 216, 230–32, 239–46, Waste Management Inc., 217

249–51, 254–58, 260–61, 269, 279, 286–

Web Enablement Market Model, 209

89, 292, 294–97, 299, 304, 313–14, 316–Web Logistics Group, Inc., 367

18, 321–23, 336–42, 346–63, 366–69,

WebMethods Inc., 219, 996, 1017, 1018

377–82, 386–88, 440, 479, 527–29, 534– Wegener Logistics, 72–74

36, 545, 634–35, 637–40, 662, 674, 676–Welsh Companies, 539

77, 691, 723, 796, 798, 868, 1019-21

Whirlpool Corp., 325–26

Warehouse Management Handbook, The, 635

Who Are the 3PL Providers?, 798–99

Warehouse Management Systems (WMS), 207– Whole Foods Market, 116

208, 279, 529, 534, 563, 635, 637, 872

Wick Communications, 1014–15

Warehouse Managers Advisory Council

WideSpan, 639

(WMAC), 30

Wharf, 938, 966

Warehouse SmartLogix, 638, 641, 639

Whirlpool, 325

Warehouse University, 661

Wiener, Charles, 148, 882

Warehouse Works software, 638

Willis Corroon Logistics Services, 639

WarehousePro Express software, 637

Wilson, Barry, 338

WarehousePro Gold software, 638

Wilson Leasing, 372–73

WarehousePro Silver software, 638

WinAir software, 208, 243, 344, 637

WarehousePRO, 206–207, 635, 637

Windows NT, 525, 912

Warehousexpress.net, 339

Wingard, Al, 28

Ward Worldwide, 649

Wireless networks and technologies, 47, 296,

Wardeck Supply Services, Inc., 292

303–304, 308, 435–36, 504–505

Waring and Gillow Ltd., 885

Witron Logistik + Informatik GmbH, 256

WARMD, 382

Wolfgang Digital, 634

Washington University, St. Louis, 189, 638,

World Customs Organization, 97, 102

841

World Institute for Research and Application

Wasserstein Partners, 717

of Chinese Academy of Science (WIRCAS),

Waterway Management Transport, Inc., 344

366

WCP/Wireless Customized Planning, 308

World Trade, 96–97

Weaver Popcorn Co., 401–405

World Trade Organization (WTO), 31, 33,

Web-enabled supply chain management, 209,

96–97, 99, 105, 364

356

World Trade Press, 364

Web Methods, 1013, 1017

Worlds Away Trading Company, 108, 111

Web Track II, 49

W.W. Grainger, Inc., 196, 658, 772

WebMD, Inc., 221

WebSphere Commerce Suite, 356

WebSphere software, 357, 1017

1 0 4 0

I N D E X

Wurldtech Security Technologies, Inc., 350

Wyeth Pharmaceuticals, 805-808

Wynyard Group, 257

Y2K remediation, 871-872

Yard Management System (YMS), 206, 342,

637

Yellow Freight System, Inc., 183-87, 321

Yellow Transportation, 126

YRC Logistics, 74

Yusen Logistics (America) Inc., 639

Z Acquisition Corporation, 859-862

Zaldi Supply Chain Software, 662

Zenith Logistics, 325

ZeroOne Software Inc., 633-634, 699

ZFP, 321-22

Zimcon Technologies Inc., 49

Zones, Inc., 176-78

Zurich North America, 723

Zycus Inc., 987

• There are various drivers of turnover such as job dissatisfaction, better opportunities elsewhere, lack of growth potential, etc. Turnover can be measured by tracking reasons for resignation, time to fill vacancies, costs of turnover.

• The value chain initiative aims to optimize processes across the entire supply chain from raw materials to the end customer. It involves partnering with suppliers and customers.

• Warehouse management handles receiving, putaway, order picking, packing and shipping. It impacts inventory accuracy, labor productivity, space utilization. A warehouse management system automates these functions.

• Third party logistics providers like DHL provide outsourced warehousing and transportation services. Emerging technologies like radio frequency identification and voice-directed workflows are improving warehouse operations.

• Education and training programs through organizations like WERC help develop warehouse management skills. Ongoing research aims to improve areas like warehouse design, automation, and performance measurement.