Assessing flow management to increase capacity - May 2019

As supply chain leaders continue to look to improve costs and agility in their operations and networks, there may be an untapped solution right under the surface of existing business practices: flow management.

Flow management can unlock additional throughput and capacity in existing operations leading to capital expenditure avoidance, and decreased costs.

In its simplest form, it’s adopting a key notion in the theory of constraints – find the constraint, exploit it, and iterate.

But flow management can have wide ranging impacts (and disruption) to other parts of the supply chain and business. As an example, many organisations have good metrics to measure, and reward productivity. Often these metrics reward “local” behaviours which impact the overall flow in an operation. This can lead to increased WIP or, worse still, insufficient flow to exploit the constraints identified in an operation. Changing or enhancing these metrics to support flow management is not always an easy task.

 

Crimson & Co encourages its clients to approach flow initiatives holistically including consideration for:

People – reviewing organizational structure, decision making, and rewards to ensure alignment with the goals of end to end flow management.

Planning – understanding seasonality is important, but so too is intra-week, intra-day and, sometimes, minute by minute demand signals to schedule and manage flow. Developing an S&OP process is a good first step.

Processes – developing insights into upstream and downstream supply chain activities, key functional areas, material handling and automation capabilities, and service level targets.

Systems – ensuring platforms can support process changes and can provide the right level of data and reporting to manage flow initiatives. There are three considerations: business rules (WMS), floor execution (WES), automation controls (WCS). Changes, and testing in these areas are always time-sensitive in a “live” operation.

Communications – reviewing current practices to ensure consistency, feedback loops are in place, and the right mechanisms and audiences are included in up and downstream communications. Change management practices are an important consideration too.

Metrics – ensuring metrics are in place to measure the impact of flow management initiatives on capacity, throughput, cycle time, and productivity.

 

-Brad Grimsley, Executive Supply Chain Consultant, Crimson & Co North America

 

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