Logistics, Supply Chain Management, and Materials Handling
Logistics is a difficult part of the business, but it’s more important than ever.
“The most difficult part,” said Ajax Purchasing Manager Tony Krump, “is managing our supply chain during periods of growth followed by slowdowns.”
Tony knows of what he speaks. Since his arrival at Ajax in 2015, the company has doubled in revenue and has added significantly to floorspace, computer systems, and workforce. More customers mean more product throughput—materials in, finished goods out.
“We’ve never stopped adapting to supply chain changes,” he said. “We’re always reallocating logistics space, training people, investing in machines, systems, whatever it takes. We can’t sit still on this.”
Effective supply chain management minimizes cost, waste, and time in the production cycle. The industry standard has become a just-in-time supply chain where retail sales automatically signal replenishment orders to manufacturers. Retail shelves can then be restocked almost as quickly as product is sold. One way to further improve on this process is to analyze the data from supply chain partners to see where further improvements can be made.
Links In The Supply Chain
Supply chain management is the handling of the entire production flow of a good or service — starting from the raw components to delivering the final product to the consumer. To accomplish this task, a company will create a network of suppliers (the “links” in the chain) that move the product along from the suppliers of raw materials to the organizations that deal directly with users.
According to CIO Magazine, there are six components of traditional supply chain management:
- Planning – Plan and manage all resources required to meet customer demand for a company’s product or service. When the supply chain is established, determine metrics to measure whether the supply chain is efficient, effective, delivers value to customers, and meets company goals.
- Sourcing – Choose suppliers to provide the goods and services needed to create the product. Then, establish processes to monitor and manage supplier relationships. Key processes include ordering, receiving, managing inventory and authorizing supplier payments.
- Making – Organize the activities required to accept raw materials, manufacture the product, test for quality, package, and schedule delivery.
- Delivering (or logistics) – Coordinating customer orders, scheduling delivery, dispatching loads, invoicing customers and receiving payments.
- Returning – Create a network or process to take back defective, excess or unwanted products.
- Enabling – Establish support processes to monitor information throughout the supply chain and assure compliance with all regulations. Enabling processes include: finance, human resources, IT, facilities management, portfolio management, product design, sales and quality assurance.
A Core Competency
Ajax views our supply chain management, logistics, and materials handling as a core competency. Our objective is to outperform competitors in these key business function. But there are challenges aplenty. Especially today.
There are many variables at play, some of which are difficult or impossible to control. Weather, trade disputes, global health issues, and other disruptions can constrict upstream and downstream pipelines for hours, days, or even weeks. Here are three ways Ajax works to excel in this area and become your trusted supply chain partner:
We don’t wait for something to happen. We take steps ahead of time by developing lean, air-tight production plans for each customer. And we stay agile and super-responsive, because we know conditions can change quickly.
Our Workforce Is Tested
Like most business issues, it all comes down to people. Our logistics and procurement colleagues here at Ajax know the importance of supply chain management and have created and run practice scenarios to shorten our response time and prevent decision-making errors at critical moments.
We’ve Developed Local Sources
Local sourcing reduces supply chain risk factors. By choosing reliable providers that are right down the street, Ajax can maintain a solid logistical flow and keep the wheels turning until the disruption passes.