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Editor's Note: As of late you may have noticed we have written a lot about procurement and the future of procurement. A large part of procurement is finalizing the contract and then the follow through of the determined deliverables in that agreement. All KPIS have metrics to measure. Collaboration.
When you have chosen a 3PL partner, insure that you have an effective Service Level Agreement (SLA) with accompanying Key Performance Indicators (KPIs) to manage the Service Level of the 3PL. This SLA/KPI has to be negotiated and agreed upon by you and your 3PL partner.This negotiation time can take three (3) to Six (6) months.
Let's talk about the outputs, or desired metrics worth measuring, in each category of what a logistics company might provide. Implementing and sustaining LEAN initiatives : 5S, Kaizen, Kanban and LEAN SixSigma to bring value to the customer and go beyond their expectations. Consider SixSigma quality will be used and measured.
There should be metrics involved to monitor these objectives to ensure success across the supply chain. These metrics should be reviewed frequently to ensure supply chain success. Reduction in “Total Cost” of the entire supply chain. The New Role of the 3PL. These objectives are accomplished as follows: 1.
The focus is to eliminate all wastes in the organization, improve processes, solve root cause problems, create a pull environment, and ensure that Lean SixSigma (LSS) works for quality and daily problem solving using DMAIC (Define, Measure, Analyze, Improve, and Control) and PDCA (Plan, Do, Check, and Act). Why are we doing this?
An effective measurement and reporting process can improve performance and provide warehouse cost savings. One 3PL-managed distribution center for a major U.S. manufacturer adopted a work measurement program to gauge and report warehouse performance at the employee level. Implement a reward system for major victories.
Today, I will now address how a focus on inventory will allow for warehouse cost reductions as well. These are based on my 40 years working in operations at Schwinn and other companies as well as consulting many companies on how to select the best 3PL for my client's needs. A Focus on Inventory Control Begets Warehouse Cost Reductions.
The first post in this series broke down what is supplier quality management and the steps to evaluate suppliers and the second post gave you insight into the metrics to look out for by 6 major industries. The next step may be SixSigma quality ( In order for a company to achieve SixSigma, it cannot produce more than 3.4
But times are changing, the use of reduce inventory offers more quality and useful performance metrics. The use of reduce inventory in production optimizes delays and reduces other associated costs. If your setup costs get spread over the run of a production, using reduce inventory would naturally lead to smaller setup cost.
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