The digital age is right here; everything is revolutionized. Not only has it changed and/or reshaped how the entire enterprise communities communicate and conduct businesses but specifically how the supply chains are operated and managed.

Thomas Friedman, superviser, Crunchy Candy Company

When you read this case study you will see the supply chains of Just Born Candy and Crunchy Candy Company. You will see the location of their factories and their distribution centers. Also shown are customers’ stores where they make deliveries. Each company does not sell to all of the same customers as the other, but there is a significant amount of overlap in the customers of the two companies. You can see the overlap in the supply chains of these two companies when you map them out as shown in the screenshot above. At the start of the case study both companies operate their own supply chains.

Customers would like to see fewer deliveries of candies in larger quantities like what they get from the bigger candy companies (M&M Mars and Hershey’s). They are also asking for lower prices. Both of these customer requests point toward combining supply chains. That way both smaller candy companies can make fewer and larger deliveries of their combined products. And if they can reduce their supply chain costs, they can also lower prices to their customers. In this case study each company makes and delivers two kinds of candy to customers. These products are shown as JBCandy1, JBCandy2, Crunchy1 and Crunchy2 . There is a spreadsheet reporting template you can use to analyze downloaded simulation data. Import your simulation data into the template and create monthly profit & loss reports as well as generate key performance indicators. 

In Spain customers visit Zara stores 17 times per year on average compared to 3 times per year for competitors. Because their clothing designs change often, it is harder for people to see them clearly on the Internet and thus they are encouraged to come into the stores instead and try on the unique fashions that Zara offers.

Suzy Hanzel, production technician associate, Zara Clothing Company

Agents for the company are always scouting out new fashion trends at clubs and social gatherings. When they see inspiring examples they quickly send design sketches to the garment designers at the Cube. New items can be designed and out to the stores in 4 – 6 weeks, and existing items can be modified in 2 weeks. Clothing items are priced based on market demand, not on cost of manufacture. The short lead times for delivery of unique fashion items combined with short production runs enable Zara to offer customers more styles and choices, and yet still create a sense of urgency to buy because items often sell out quickly. 

The company’s core market is women 24 – 35 years old. They reach this market by locating their stores in town centers and places with high concentrations of women in this age range. Short production runs create scarcity of given designs and that generates a sense of urgency and reason to buy while supplies last. As a consequence, Zara does not have lots of excess inventory, nor does it need to do big mark-downs on its clothing items. Zara has 12 inventory turns per year compared to 3 – 4 per year for competitors. Stores place orders twice a week and this drives factory scheduling.

Inventory visibility is crucial. Warehouse inventory has to be able to interface with the production side of the business and they have to be able to connect within the supply chain to know what is in the warehouse and what is on a truck or stored in a trailer.

Dave Bushee, vice president of logistics technology, Penske Logistics

As part of its work, Penske manages one 150,000-square-foot internal distribution center and one 400,000-square-foot external distribution center. It provides receiving, storage, sequencing, kitting and repacking. Penske handles large parts and modules as well as shipping racks and the trailer yard. Penske also designs and produces the material sequencing racks in-house, saving production space and reducing downtime.

The actions inside a distribution center are the catalyst for speeding deliveries, managing inventories and cutting costs. Penske’s proprietary technologies track the flow of inventory through and around the distribution center, monitor product velocity, and provide advance notice of arrivals. Since coming on board, Penske has focused on reducing and controlling inventory, improving the receiving area and boosting productivity. Penske leverages a data repository that provides a single, high-level, comprehensive view of the manufacturer’s overall operations, which allows the team to increase efficiency. Information about incoming and outbound products can be transmitted electronically between supply chain partners, and the information is automatically loaded into the core system.

Creating a positive experience for the distributor’s customers started with improving visibility and communication. Success within the supply chain depends on connectivity, and technology suite ensures everyone involved in a shipment has visibility into what is happening.

Lora Carson, join CEO, Warehouse Company

The distributor turned to Logistics to help streamline and improve its deliveries to warehouses, houses, job sites, apartments and businesses. The partnership has allowed the distributor to improve customer service, reduce the size of its in-house fleet and tap into dedicated capacity. Utilizing expertise also enabled the distributor to focus on its core business rather than transportation concerns.

The distributor’s parent company uses transportation-as-a-cost-of-sales as a metric to compare business units, so managing costs is critical. ClearChain technology allows customers to centralize their data, giving them the ability to see and understand their total transportation spend. The technology has also helped optimize the network and streamline deliveries, driving overall cost savings. Moreover, the distributor saw added value in efficient, professional drivers that arrived at its customers’ sites on time. As part of its communication, team members from Logistics and the distributor meet regularly to discuss metrics, data analysis, priorities and plans. The increased visibility enables data-driven decision making, and regular meetings give both parties clear direction for the future.

The simple rule in traditional supply chains was to store “maximum possible quantity of every product, everywhere, every time”. This rule had to be followed because of lack of information flow and planning mechanisms in the supply chain.

Bill Carston, warehouse selector, Deliver Group Company

Supply chains have evolved and are much different from what they used to be say 2-3 decades back. Modern supply chains equipped with better information & intelligence are able to predict product demand well in advance, plan accordingly and deliver the items close to when they are needed.

You now know the stark difference between a warehouse and a distribution center and how the evolution happened over time. Does this mean that warehouses no longer exist or they don’t serve any purpose? You will be mistaken if you believe that. Warehouses still exist and serve a purpose. A good example would be how inventory is pre-built months in advance to meet the high seasonal demand and is stored in typical warehouses before being sent to a distribution center for customer service. However, the importance of warehouses in supply chain has gone down and the distribution centers have now emerged as the nerve centers of the modern supply chains.

Making your warehouse more efficient starts with having the right layout in place. Your products should be organized according to their popularity. You should automatically collect data on your products as soon as they enter the facility.

Thomas Hunter, shipping & warehouse lead,

Warehouse weighing scales can greatly improve productivity in your facility. For example, by using forklift scales, you can lift, weigh, move and record loads in a single operation. Since they have electronic sensors, they can weigh the loads accurately. The weighing scales are made of durable materials and have no springs or hydraulics, which ensure that they can withstand harsh conditions and jolts without interfering with their accuracy.

You must leverage technology to provide real-time inventory visibility and management. Since real-time inventory tracking considers averages and variations in orders, you will be better equipped to handle any sudden changes in throughput. Maintenance of equipment is essential to ensure its smooth running. You must have a maintenance plan which ensures that the essential machinery is serviced at regular intervals. When the machine is well-serviced, it will its prevent complete failure as you would identify a potential problem during the maintenance checks itself. Another benefit of regular maintenance is increased efficiency as the operations will run smoothly, without downtime caused due to the breakdown of machinery.

A proprietary system helps design the most efficient routes with a route algorithm. Dedicated staff constantly redesign this QSR’s routes for absolute optimization. Imagine if each shipping line or container operator followed their own specifications without adhering to the ISO Standards set for the industry. A unified shipping approach would have been impossible.

Joe Carlier, senior vice president of Global Sales

The changing supply chain and higher customer expectations will require that you know every detail about where your inventory has been, is going, and when and how it will arrive. With it, you’ll have a more comprehensive understanding for better decision-making around order fulfillment and operations management, as well as transparency throughout the recall process.

Many of today’s best-known food and beverage brands trust HighJump for supply chain management and visibility because we offer unparalleled advanced inventory management capabilities and real-time visibility to critical information. From the supplier to the store shelf and all locations in-between, this level of material and inventory control allows our customers to focus energies on expanding their businesses and building new effiencies into their processes.

As soon as you accept an offer on your business, you’re going to be anxious to jump into your next big venture. Savvy buyers often withhold a portion of funds until you finish training them on the nuts and bolts of the business, so your work isn’t over just yet.

Sara Paulson, shipping coordinator, Langer Delivery

When businesses change hands, it’s common for the buyer to deposit a portion of the funds into an escrow account and not release them until you hold up your end of the bargain. While it can be scary to give up control of your business before you have the cash in hand, realize that putting the funds into an account controlled by a third party offers protection to both you and the buyer: It ensures the buyer actually comes forth with the funds and that you fulfill the criteria set forth in your agreement (such as business training or the transfer of intellectual property).

If your business earns money from subscriptions, SaaS tools or memberships that automatically renew on a monthly or annual basis, you’ll need to help the buyer gain permission to collect recurring revenue from those clients. Handling this up front can help prevent headaches and service disruptions a month down the road. Instead of living across town, your buyer may live across the country or halfway around the world. And instead of handing over the keys to the building, you’re transferring account passwords, intellectual property and domain names. That’s the beauty of having an online business – you can live virtually anywhere. But distance doesn’t mean you should close the lines of communication after price negotiations are complete.