Getting simple isn't that easy, says Collin Albrecht, senior director of supply chain with Charter Communications. Still, there are plenty of opportunities for clearing out the "clutter" that adds time and cost to so many parts of the chain.
Simplicity can be a complicated matter. From a supply-chain perspective, Albrecht defines the concept as "a new back to basics." Companies must scrutinize their processes, including procurement, storage and shipping, to clean out the "clutter" that tends to build up in facilities and data. Their guiding principles should be visibility of inventory and collaboration with supply-chain partners.
Everyone benefits from the exercise, from the chief executive officer to the order picker to the end customer. Concepts such as sales and operations planning, business intelligence and analytics can be valuable tools, "but if you can't put the correct product on a truck, you've failed your customer," says Albrecht.
The process of data collection is one good place to start. Managers need to rid themselves of unnecessary information, eliminating data that is of use to just one or two people in the company. The establishment of key performance indicators can facilitate the process, with an eye toward removing needless complication. In addition, companies should map out their supply chains to get a sense of how product moves. "If it looks like spaghetti on paper," says Albrecht, "the chances are it's not going to be good. To visually see how that process flows is the key thing."
In the distribution center, managers should focus on the goal of fulfilling customer orders, and not burden employees with unnecessary tasks. They should also strive to create an environment in which workers and equipment can function without encountering physical obstacles. "When you trip over stuff," Albrecht says, "it affects process flow."
Network simplification is equally important. At one point, Charter Communications had eight warehouses in the southern part of a single state, all carrying the same product and located within an hour and a half drive time of one another. It also had a regional distribution center which was shipping to the warehouses. "We cut out a big chunk of the movement of that product," Albrecht says. "We saved on touch points and inventory requirements." When it comes to global supply chains, there are substantial benefits to be gained through better "command and control," he says.
