The Simple Supply Chain World: Part I – Logistics

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Introduction

I was recently asked about my experience in supply chain, and what tools I would use to be a good supply chain manager.  I started to answer the question, providing all the different experiences and tools I had accumulated of the years, I realized that the answer was much simpler. In fact, the answer was succinctly put into two words “common sense.”

Biblical Supply Chain

The supply chain is all about common sense. The supply chain is the oldest profession, it is even supported as such in the Bible, and starts with the seven days of creation, where God manifests reality by “moving” things around, or as the Bible states, God Separated the Heavens from the Earth. This was a divine material management process.

However, let’s not theorize on theological interpretations, let’s look at life as we know it. Historically, humans have been moving from one place to another, following their food supply, from there, they became farmers and started to manage inventory of food. This then progressed to trade, where food was traded along transport lines, and wars were fought with the aid of “logistics” sitting in the rear and supporting the warring troops.

Supply Chain has been a part of the human endeavor ever since Adam took his first bite from the Apple, which was also a logistical operation since Eve had to pluck it and give it to him. (BTW, since Eve took the first bite, does that make women more astute? They do have seniority from taking the first bite.)

Supply Chain as a Process

The supply chain is a process; it is occurring naturally all around us. In fact, the only difference between the supply chain of yesterday and the supply chain of tomorrow is the technology used to control and track. As such, the process is the same for centuries, even eons. The supply chain is about the movement of resources. It is a basic process but gets complicated as it grows. As such, making decisions and finding solutions to a process does not change even when the scales are Galactic. The movement of a single grain of rice can be as complicated as the movement of ten million grains. Its all down to common sense.

The supply chain is all around us and is constant. From the toothpaste to the water (how do they get there?), from the stairs to the elevator, from the waste we throw away to the recycled products, and from UberEats delivering a Pizza to SpaceX delivering a Car to Mars. The world is a large supply chain of life in motion.

Supply Chain Tools

Supply chain basically uses only four categories of tools to manage and control resources in a supply chain process. These three categories are transportation, storage facilities, and storage devices, and tracking recording tools. Let’s take a closer look at these four categories:

  1. Transportation, this includes any device that is used to move a resource, it can be a manual forklift, a car, a ship, or even an automated robot in a four-dimensional warehouse automation system.
  2. Storage Facilities are as the name suggests, places to store resources, which can be warehouses dedicated to storage, to holding bays for WiP and racks in a Supermarket.
  3. Storage devices are a subset of storage facilities, but come in their own category, since they are the method in which you help transport the resources, such as bags, sacks, boxes, pallets, etc.
  4. Tracking Recording Tools; these initially started out as clay impressions stating what was in an urn and became complex software programs that provide automated tracking of devices using RFID as well as MRP systems.

So, as you can see, with only four categories, a supply chain system, no matter how complex, is really quite simple. It’s all a matter of using common sense to break down the complexity into the four basic components.

Supply Chain Technologies

So, what are the technologies used to control and track resources in a supply chain? As mentioned above there are four categories, and they have changed over time. However, the changes do not come to confuse the system or to expand the number of categories used to manage the system. Technologies come to deal with specific issues around time and space management, as well as the accuracy of the count.

In each category come technological changes, and these include:

  1. Transportation: Autonomous AI controlled vehicles and handling equipment, automated conveyor-based solutions, etc.
  2. Storage Facilities: Intelligent environments that control the temperature and humidity, maintain sterility as well as use sustainable energy sources to power up visibility. IoT building blocks creating intelligent buildings, materials used, and systems integration to optimize space management.
  3. Storage devices: Recycled materials, smart materials, IoT based storage boxes.
  4. Tracking Recording Tools: these range from advanced lean manufacturing methods and DL 6S algorithms, to AI controlled ERP systems, to barcode tracking stations, RFID printed patches for transportation and a plethora of software-based tools including Blockchain technology-based platforms.

Common Sense

The bottom line of all these amazing technological advances is that they are all categorized into one of the four parts of a supply chain matrix. Once you can segment a system into the four basic categories, you can then isolate the issues, and handle each one categorically. Using a basic common sense approach, you can integrate any level of technology, from the use of a pencil to write down information, to the integration of a comprehensive satellite-based RFID tracking system.  The bottom line is that all you do with the more complex systems is add more complexity to speed up a simple process. As such, supply chains can always be improved by applying common sense and not always using the latest methods.

For example, what would be better? A Kanban card system or a barcode scanning system? The answer is both, it all depends on what your operation levels are all about. If you are a small to the medium-sized manufacturer, Kanban is a perfect solution, and if you are a massive automated automotive system, the barcode scanners would be your solution. However, never rule out the Kanban or the barcode reader as supplementary solutions for either scale.

Some small-sized businesses can grow exponentially when a computerized solution is integrated alongside a manual system, and large automated systems are prone to electro-mechanical issues requiring immediate maintenance, as such, the added Kanban would provide an audit for specific operations in the automated system.

Solutions

So, what tools do I use to provide solutions? I use common sense. I analyze the system and break it down into one of its four categories and then rebuild the system for optimum performance using every possible solution available within the budget constraints and the system requirements. After all, there is never a perfect solution, and systems constantly evolve, even if they evolve from the use of a pen and pencil to an iPad, and an iPad to an RFID system, and who knows what will come next? Perhaps Smart packaging devices that “talk” with “smart” building materials.

The Bonus at the Bottom

If you want to simplify how you manage your supply chain, whether its to optimize the system for efficiency, to building a growth-based system, just answer the following questions:

  1. What do I use for Transportation: The first, middle and last mile.
  2. How do I receive, process, and move resources in my supply chain?
  3. How do I store the materials?
  4. What do I use to track and manage my resources?

These are the four basic questions, and believe you me, once you start answering them, you will find that they lead to (in some cases) thousands of answers. However, the answers are usually much simpler than you realize. Let’s look at an answer:

  1. I rely on the supplier for the first mile, 3PL for the middle mile, and my own resources for the final mile.
  2. I use a receiving bay with a forklift, use standard packaging and holding boxes, pallets and such for internal movement.
  3. I have a warehouse using basic gantry and racks, and I have WiP storage rooms in the production area.
  4. I use lean manufacturing with Kanban and support this with an MRP/ERP solution.

OK, so that’s a very basic answer, but it’s the kind of answer you will get from 60% of the manufacturing sector. Even if you break down the answers into more detail, the outcome will be the same.

The Secret

There is no secret; the solution is in maintaining simplicity, using common sense to keep things simple. Even the introduction of a big data crunching AI that uses ML and Dl for managing large supply chain networks such as Amazon is no different from the rice warehouse in a small village in Vietnam. The core four categories are identical; the difference is in the complexity of the distribution system that is based on demand. However, when you break down your supply chain and analyze its needs, you end up finding solutions that fit one of the four categories and that handshakes each other category to supply a streamlined and efficient supply chain system