What makes supply chain excellence?

Written by Columbus Product Strategy Director, Kevin Bull. Every year The Manufacturer runs an awards programme to recognise excellence in UK manufacturing. This year I had the pleasure of joining the judging panel for The Manufacturer Supply Chain Excellence award. So what were we looking for? What makes “excellence”?

The judging criteria was organised into 10 categories. Let’s take a deeper look into three of the categories in part one of this blog series - customer demand, process controls and factory layout - to explore the aspects of the businesses that the judging team felt delivered excellence.

Recognising Customer Demand

A clear and early vision of customer demand and its impact on the factory and on supply chain capacity is critical in driving up customer service levels and for improving efficiencies.

This level of insight might be achieved through enhanced customer collaboration, working closely with them to truly understand the drivers of their business and developing an understanding of their likely future requirements. Online collaboration websites that facilitate collaborative design and product development and uploading of their pipeline requirements reduce the level of manual effort and allow direct input into planning systems to support capacity and material planning.

The importance of data and analysis

Another way to achieve insight into customer demand is to analyse historic sales and use this as a basis for statistically generating a demand forecast, followed up by applying human knowledge of future events (new product launches, promotions, events that may affect demand, etc.). This is used to best effect when customers are unable to provide demand forecasts or where the forecasts that they do provide have ultimately played out as being unreliable. Information technology has a role to play in identifying trends and patterns in customer behaviour and delivering a deeper level of insight. The best systems will allow external factors to also be considered, including weather patterns, currency fluctuation, and product quality performance and so on.

Having derived a picture of the likely customer demand, these requirements need to be evaluated and used to communicate component and material requirements downstream to the supply base. An effective process that will allow collaboration between the business and suppliers, possibly including an online collaboration portal, should then be in place to support resolution of supply issues and constraints.

Constant analysis of customer performance is vital, as this helps the business to understand how well it is predicting customer behaviour. This analysis will often take the place of an OTIF measurement, but consideration should be given as to whether this is a measurement against a promised date or a customer requested date, the latter clearly being far more effective in measuring the ability of the business to meet real-world customer demands.

Process Controls

Operating procedures and works instructions should be documented, in place and visible at point of action. On the shop floor the modern factory will deploy computer work stations that will allow operators to view the work schedule, to start jobs, to look at instructions and to record job completion and quality information.

High quality work instructions will include image-based instructions, quality pass/fail images, and possibly video instruction. In-process quality testing should be taking place, with quality measurements being recorded and stored for subsequent recall and analysis and to be used in driving improvement programmes. Where a quality issue is identified, rigorous processes must be in place to prevent the product from continuing through the remainder of the manufacturing processes.

The drive for continuous improvement

Continuous improvement practices should be evident. To this end, it is good policy to have a vehicle to allow employees to raise suggestions on how processes can be improved. Using a T-card system on the shop floor notice board may seem old fashioned, but is does provide clear visibility of the status of the suggestions and their progress through review. KPI’s on the number of suggestions being raised/adopted should also be included, often embedded within balanced scorecards as a measurement employee morale. Incentives to employees raising an improvement suggestion that results in a measured benefit might also be in place.

Factory Layout

The efficiency and throughput of a factory can be heavily constrained by its physical layout. The key here is that travel distances are minimised and that double handling is eliminated. As judges, we were also looking for evidence that the factory layout is being considered as an element of the continuous improvement programmes within the business.

Where possible, the layout of the factory should also demonstrate a level of flexibility and agility. If the factory layout can easily be changed to adapt to new manufacturing processes or product ranges then this may allow the business to pursue additional opportunities and bring new products or new product variants to market faster.

Working conditions

The working conditions within the factory are also important. This includes adequate lighting and temperature controls, cleanliness, worker ergonomics and a keen focus on health and safety. The recording of health and safety incidents, follow up analysis, workplace risk measurements, and continuous improvement processes should all be evident.

Factories, especially older ones, offer many opportunities to improve their environmental footprint. The business should demonstrate awareness of this and include actions to reduce consumption of utilities and waste outputs.