In this post, I’d like to demonstrate how portfolio managers can optimise their product portfolios in an educated fashion by incorporating the right tools and information.
The 5 Cs of Transportation Success in Australia We’re a nation of independent thinkers in Australia, with a unique and vibrant culture unlike any other in the world. When it comes to supply chain efficiency, though, the maverick ideology that lives so deeply within Australians is constrained by many factors including a small population, vast distances between capital cities and poor road infrastructure. Despite the fact that the transportation industry in Australia is arguably one of the world’s most innovative, the vast majority of freight transported on Australian roads travels via the relatively expensive less-than-truckload (LTL) freight mode. That means most trucks we see daily are burning fuel, causing congestion on overused suburban and urban roads, and using man hours–despite the fact that they are only 40 to 50 percent full. And it is expected to get worse; much worse in fact, as greenhouse gas emissions in Australia are expected to double by 2050 – unless we find a new approach. While some Australian companies may have optimised their supply chains up to a company level, this is not enough to sustain competitive advantage into the future. It is useful to take a look at companies in other industrialised countries that have already adopted a more formal approach to transportation collaboration, optimisation, and consolidation freight management that helps them achieve economies of scale and resultant savings. When business-as-usual ceases to make sense, it’s time to collaborate and innovate. Put simply, our current approach in Australia puts us behind the curve and with our increased role in the global economy; it also puts business and even our economic growth at risk. So, how do we begin this transformation? First, we can address and incorporate the following factors into our strategic supply chain plans for success: 1. Network Complexity Developing largely in a vacuum without many outside influences over several decades, supply chains in Australia have become extremely complex and fragmented. With a population of just over 23 million, we also have several thousand freight carriers. Time is showing that this logistical network complexity is adding expenses for every player in the supply chain and resulting in inefficiencies at every level; as seen in problems like half-empty trucks clogging busy suburban roads and slow turnaround times at distribution centres. 2. Global Competition Globalisation is certainly nothing new, but competitive forces are accelerating and driving changes that will ripple throughout the market. A
Growth is good for a business. But growth can severely strain an outmoded distribution centre (DC), hampering productivity and fulfilment capabilities. In this two-part blog series, I’ll offer some thoughts on the best way to optimise your existing and future DC to meet growing demands.
It should be noted that a DC optimisation should be a part of a comprehensive supply chain network optimisation process. It’s is a necessary step for many growing businesses that are currently stretching to meet growing fulfilment obligations.
As supply chain practitioners, we understand the importance of having enough inventory to maintain supply chain flows and service levels. However, as your CFO will highlight to you – understanding the importance of inventory as it contributes towards the corporate financials as well, is the real challenge we face.
The service level agreement (SLA) is a popular platform on which a company and their third party logistics (3PL) provider can build a mutually beneficial and harmonious working relationship. On paper, SLA’s look like a great idea. Everyone knows where they stand. Everyone knows what’s expected of them. And everyone knows what they can expect if they fail to fulfill their side of the bargain.