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. 

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.

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.