A vital pre-requisite is to introduce the process of continued review and improvement, including regular introduction of new ideas and methods aimed at reducing logistics costs, so that the process achieves its own momentum.
All personnel involved must understand and feel personally responsible for implementing the approach and achieving the targets set.
The improvement techniques presented have been developed during 1500 individual projects. They are a blue-print for a practical approach to the challenge of permanent inventory control. The programme has three phases: BRIEFING, CHANGING and SAVING (see fig.1). Each of which is divided into three steps. It includes a hierarchy of detailed “checklists” aimed at assisting the process and identifying the correct analyses, key-factors, presentation methods and project steps.
Clearly, each individual step need not be followed exactly. Each controller and materials manager must identify what is correct in his organisation. The economic improvements evolve through three critical project phases:
Ø identifying the initial situation (Briefing)
Ø moving from present well-worn practices to a new materials management philosophy (Changing), and
Ø when this has effectively been achieved and results are starting to accrue, then it is necessary to cement these new methods into the daily work of the organisation (Saving).
The first level of the structured checklist is shown in fig.2.
Logistics professionals have agreed that sustained success in optimising stock costs and net working capital requires a total logistics approach and necessitates many activities and actions by all involved along the supply chain.
Whether new philosophies and concepts such as KAIZEN or LEAN-MANAGEMENT are introduced, or if the experiences of JUST-IN-TIME control or TIME BASED COMPETITION are used, the bottle-neck of all these excellent strategies and concepts is their implementation in detail, including the setting of personal responsibilities.
The speed of implementation and improvement is actually set by the market and the competition but must be achieved within reasonable logistic effort and costs. It is not enough to reach a one-off static improvement of (say) 10 per cent. Management effort must be invested to establish IMPROVEMENT PROCESSES that are continuous so that improvement becomes a standard.
The programme described here is not simply a set of checklists, but rather a call to action: a guide to starting the process. It is conceptually complete, mature and practically proven in numerous logistics projects and stock improvement programmes.
It contains a large number of ideas, suggestions and detailed checklists relating to a range of individual work-steps. But it has three fixed and binding phases:
As with all structured methodologies, it is important to plan each stage in detail. On completion of each stage, the objectives for that stage, together with its results, must be reviewed as part of the planning process for the subsequent stages.
Using the techniques outlined above, a set of practical tools are delivered to the responsible personnel, enabling continuing, monitored, planned improvements to be made to the way in which working capital is employed within the supply chain throughout the organisation.
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