posted on 3/3/2011 11:49:02 AM
The 2011 Progressive Manufacturing 100 Award winners display impressive supply chain management techniques and a knack for return on investment.
Supply chain management was central to many transformational business projects in manufacturing over the past year, the Progressive Manufacturing 100 Awards revealed.
Announced last week, the annual PM100 Awards honored projects in business disciplines as diverse as supply chain management, business model management, data and integration efforts, and education and training, which are among the eight disciplines that make a manufacturer progressive and help to create competitive advantage. For 2011, 18 of the PM100 winners hailed from the Supply Network category, which includes supply chain management projects.
The companies honored for their supply chain management expertise exemplify a broad range of manufacturing sectors and business structures, from automakers to tortilla makers, and from Fortune 500 luminaries to small and midsize businesses. IT transformation played a central role in many of the projects.
The winning manufacturers tackled a range of SCM challenges. One manufacturer replaced an MRP planning tool with a Web-based kanban system to manage inventory based on customer demand signals. Another used standard voice-over-IP (VoIP) technology and voice recognition software to modernize the picking operations in its warehouses—and did so in 100 facilities inside of nine months.
Sales and operations planning was a common target of the SCM improvement initiatives in 2010. One project combined the principles of operational excellence with those of effective supply chain management by creating a standardized sales and operations planning process.
In the words of the manufacturer itself, “One of the best decisions [the company] has made is to develop a best practice deployment model for S&OP…The result is that [the company] now has a very agile and dynamic S&OP implementation process—one in which they can start with a business unit and go from initial education to live in about four months.”
One PM100 winner in the food and beverage industry took on the thorny issue of asset management among its distributors. Each day, the manufacturer inserts into its supply chain thousands of product packages housed in returnable plastic containers. But the containers are reusable only when distributors return them to the point of origin, and in too many cases that didn’t happen, the manufacturer found. To stem the tide of lost assets, the company turned to an RFID system that helped it improve that facet of its supply chain management. Before the automated system was implemented, only 4% of the containers found their way back home. After, that number rose to 100%.
Another Progressive Manufacturer implemented a broader supply chain visibility project, using software and better supplier data to improve its SCM intelligence. As it noted in its nomination, once the system was installed and tested, “At the touch of a button [the company] can now understand what its capacity looks like at a graphical level, see where the bottlenecks are, understand the causes, and work to find solutions to alleviate them.”
It’s no surprise that in a time of economic uncertainty, supply chain management also took the form of supplier rationalization. One PM100 winner phased out 195 suppliers, and saw drastic improvements in its supply chain performance as a result. The company’s on-time delivery performance improved to 96.7% from 87.7%, while its Parts Accepted Trouble Free (PATF) metric jumped to 97.5% from 93%.
Another company bent on reducing waste while bettering its supply chain management instituted an impressive Just-in-Time system of parts delivery. Under the JIT system, suppliers deliver parts to the production line less than an hour from the time they will be incorporated into an assembly process. This brand of supply chain management obviated the need for the manufacturer to run a warehousing operations adjacent to its production line.
Every good project produces a good return on investment, and the PM100 winners that focused on supply chain management were no exception. One winner improved its picking accuracy by a full 96%. Another reduced inventory by 15% while boosting sales 6%. Still another lowered sourcing lead time by 40% and reduced its supply chain footprint by 60%, an important metric in this age of carbon consciousness.