Challenges for Logistics Engineering Practitioners
The devil is in the details. The challenge might be consolidating five
distribution centers into one mega DC. Your customer has 30,000 SKU's, many of which are
replicated across current facilities. How big should the new DC be? Certainly not the combined
sizes of the current ones. The new inventory balances should be lower than the previous aggregate.
Turns should be higher. Material handling and carrying costs should be lower.
How can you quantify this for the customer to secure the business? Some would just say that the
new approach is obviously better. More serious responses would be supported by data, painfully
collected and often loaded into Excel and Access. While the latter approach provides results,
it is at best time consuming and tedious. If the customer changes the parameters, considerable
rework may be required - potentially on short notice.
If the customer buys into the high-level design, the real detail work begins. What should the new
configuration look like? How will the SKU demand be matched up with capacity? What should the new
inventory max's and ROP's be? What kind and how much of each type of storage medium is required?
What are the operational cost projections? How can alternative scenarios be developed and compared?
How will changes in demand at the SKU level affect the answers? How do you apply your professional
skills to the data analysis and detailed design? Get some better tools!
We at Chiron Technologies can help you differentiate your service offerings by providing logistics analysis tools and support that will help you quantify significant opportunities for your clients to achieve a leaner inventory profile, more efficient material handling operations, and optimal use of storage media. Once identified, our tools support the implementation of these opportunities at the detail level. A byproduct of the design effort is a comprehensive database that will provide considerable value in maintaining an efficient environment.
Our flagship software product, i-Lean, is a sophisticated logistics engineering analysis and design tool focused on optimizing inventory management, material handling, and storage media selection/utilization within a distribution center, warehouse, or manufacturing facility. It does this by considering dozens of variables characterizing an existing or planned facility and the SKU population it supports. While hundreds of calculations are performed on each SKU during a design run, the analysis output is produced - even for thousands of SKU's - in only a matter of minutes. This allows your engineering team to explore a wide range of design options in a fraction of the time required by a spreadsheet solution - and with far greater accuracy. Last minute changes from the customer can be handled in a snap.
Another very important i-Lean benefit is recurring revenue from clients. Once you have established the client's data in i-Lean and delivered on the initial contract, there's a great opportunity to sell a "tune up" to help them respond to the inevitable changes they encounter in their product profiles. i-Lean's value as an engineering tool can be considered from a number of perspectives:
Financial Analysis Perspective
- What impact a change in product demand would have on required inventory levels and turns
- Whether shorter vendor lead times would help or hurt your overall costs (you might be surprised by the answer)
- What specific items can be routed directly to point-of-use or pick slots from the receiving dock (instead of going through reserve storage) to reduce material handling costs
- How a change in labor rate will affect operational costs
- How vendor package quantities are impacting your inventory carrying costs
- What items are the best candidates for a vendor managed inventory program
- And the list goes on….
Think what you can do with the ability to assign warehousing costs down to the individual item. i-Lean software analyzes dozens of variables at the individual SKU level to recommend the best:
An experienced professional can generate a high level warehouse or DC solution quickly, often based on limited data. The detailed design effort, however, is a far more intense exercise. Churning data for thousands of SKU's in thousands of locations to get a final, documented design solution can be a serious bottleneck resulting in project delays. If project requirements change and the deadline is fixed, the data crunching goes from tedious to painful. i-Lean's integrated database and analysis features help break through the bottleneck. These features include:
- Managing large amounts of data - Unlike spreadsheets, i-Lean uses a database to support a sophisticated data model. Once loaded into the database, analysis is no longer constrained by the volume of SKU's, locations, storage media, etc.
- Establishing data integrity - Working with inconsistent data yields questionable results. i-Lean provides data validation utilities to cross check many key data elements for internal consistency, highlighting questionable items, e.g., a SKU with no weight, dimension, or cost.
- Cloning and copying data - Whether it's creating a new SKU profile based on an existing one or transferring a whole group of SKU's from one subzone to another, i-Lean provides many options to manipulate bulk data.
- Automatically creating subzones - Subzones, logical groupings of SKU's and storage media, can be done in a variety of ways including SKU pick profile, demand, size, cost, hazmat, and product group/subgroup.
- Comparing multiple design outputs - Often, it's important to see the effect of changing one or more variables in a base design, e.g., the effect of increasing SKU demand or introducing additional storage media of a particular type. Multiple stored analysis runs can be compared at the summary or SKU level.
- Sorting, filtering, and exporting data - i-Lean windows with row/column output can be filtered and sorted on line; results can be printed or exported in various file formats.
- Creating custom outputs - While a large number of standard reports are available, custom reports can be developed using Report Generator which supports SQL conventions.
- Diagnostics - The logic for making SKU assignments during an analysis run can be generated as required. This will highlight the reason for a SKU not being assigned to a storage medium, e.g., height exceeds storage media constraint.
Information Technology Perspective
- An intuitive user interface - Like other high-quality Windows applications, screens are straightforward and easy to use.
- Excellent data import and export facilities - Bulk data, such as product information, can be loaded from your sources using flexible import tools. By the same token, i-Lean's outputs can be easily extracted, filtered, and sorted as inputs to your current systems.
- Data integrity tools - Multiple validations can be run on the reference data you establish to ensure it is consistent and appropriate.
- Data management tools - A number of housekeeping options are provided to keep your data environment lean.
- Standard reports - A wide range of reports are available for scenario analysis; this data is also easily exported.
- Custom report generation - To complement standard reports, a Report Generator provides the capability to customize content and format.
Contact
us for a demonstration.
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