World Logistics Center Largest Logistics Hub in the United States

The World Logistics Center project was approved in Southern California by the Moreno Valley City Council this past month. The complex will be a 40.6 million square foot logistics hub, making it the largest in the nation, creating over 20,000 new jobs. It will be built in two phases with completion dates of 2022 and 2030.

Supply Chain Professionals Balance Same Day Delivery with Correct Inventory Levels 

Supply Chain Brain noted that same-day and next-day delivery are not services normally associated with furniture stores, but City Furniture is changing that in South Florida. City's fast delivery program, which began 12 years ago, has become a key competitive advantage and is changing customer expectations for the industry.  

City Furniture, which has a chain of retail stores in South Florida, was ahead of the curve on same-day delivery - especially for an industry known for long customer wait times. City began offering same-day and next-day delivery across its network a dozen years ago and has aggressively advertised the service, building it into a key competitive advantage, says Andrew Koenig, vice president of operations. Customers who place an order at any of City's 26 showrooms by 2:00 p.m. on weekdays or 3:00 p.m. on weekends can opt for same-day delivery within a 120-mile radius at no additional charge, Koenig explains. From 40 percent to 50 percent of customers choose the same-day option, he says. 

Each day when the cut-off time is reached, same-day delivery orders are batched and sent to the routing system, Koenig says. After routing is optimized, orders move on to the warehouse management system. "In the warehouse, we will have anywhere from 20 to 30 guys, who have about an hour to pull and stage up to 200 orders." These orders are then loaded onto company-owned trucks. Drivers leave the dock by 4:15 on weekdays and 4:45 on weekends and continue working until all orders are delivered, which can be as late as midnight. "Sometimes our trucks beat the customer home," says Koenig. The biggest challenge with this service has been on the customer side, he adds. "Things change in people's lives and sometimes they can't get home to accept delivery. It's frustrating to have to haul it back and do it all over again."   

Providing this service means carrying a lot of inventory, says Koenig. "We have a great purchasing team and we work really hard to maintain a high in-stock percentage. "The company operates a million-square-foot DC. With more big-box retailers getting into furniture sales and new online competitors gaining traction, the trend for very fast delivery will continue to grow.

Manufacturing Supply Chain Professionals Managing with Demand-Driven Data

The supply chain manufacturing managers recognize the need to respond to customers' needs by becoming more demand-driven. From plant floor managers to operation managers the interface with suppliers is helping supply chain manufacturing leaders discover how demand-driven principles help organizations profit through more effective methods. The notion of demand-driven is not new; it is undergoing great expansion by helping manufacturers become more competitive and better equipped to meet customer needs, create synchronized systems that solve common manufacturing challenges, and achieve critical business goals. The visibility gained through demand-driven and synchronized factories enable manufacturers to quickly adapt to change and come out more profitable for it whether the change is based on competing market conditions, evolving needs of customers, increasing consistantency, or achieving quality with less error and waste.

Supply chain professionals must aggregate information from both machine-level and disparate enterprise systems, providing real-time visual information systems that empower everyone - from the top floor to the shop floor - with actionable information. More than any other role in manufacturing and distribution, supply chain execution requires managing constraints, improving flow, driving on-time delivery, and maintaining a competitive edge.   

Forecast Errors
Volume 2, Issue 21, June 1, 2015

A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.

Demand Planning to Eliminate Errors

Demand planning is the art of integrating multiple, independent, and inaccurate signals into one accurate signal, according to Michael Massetti. Demand is the baseline for all things supply. Customers’ desire for a product drives the demand and is the foundation for business volumes. Without demand there is absolutely no need for supply and even less need for supply chain folks.  Demand planners have a plethora of signals available to them - point-of-sale (POS) data, macro market or economic trends, historic demand accuracy, promotional effects, seasonality, business targets, prior product launches, actual orders, and more. While these are options aplenty, by themselves, none are sufficient or accurate. Read more.

Forecast Errors
Volume 2, Issue 20, May 18, 2015

A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.

Demand Forecasting to Eliminate Errors

Today, by using demand forecasting software, manufacturing companies can plan long lead items without flooding production operations with unnecessary inventory. Companies working closely with key customers and the sales force are gaining insight into potential demand, in addition to working with demand sensing techniques, resulting in data and shared repositories with information about the status of inventory at key suppliers (or even the entire supply chain). Read more.

Forecast Errors
Volume 2, Issue 18, May 4, 2015

A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.

Moving Away from Forecast Driven Business Models

In a recent webinar, participants were asked “How accurate do you think the forecast for your company usually is?” With 54% of the respondents claiming less than 60% forecast accuracy, it is not surprising supply chain professionals have to spend a large portion of the day making additional corrective action spreadsheets and providing them to suppliers. Supply chain professionals in the automotive, aerospace, medical devices, electronic components, fitness equipment, pharmaceutical, and manufacturing industries were also asked how to improve forecast accuracy within the company. Two choices, “changing production to a demand-driven model” and “implementing a pull process,” (33% combined), though not a majority, bodes well for the future of manufacturing. Read more.

Demand Drive Supply Chain Management at Lowe’s and Home Hardware

Forecast Errors
Volume 2, Issue 17, April 27, 2015

A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.

Forecast Errors as Wrong as the Forecast

The Economic Detective blog recently shared some important data.  James Montier claimed that in the US analyst community, the forecasting error was 47% over 12 months and 93% over 24 months. To have forecasting errors almost as big the forecast itself, begs the questions as to why we have them at all. Granted, predicting the direction of a specific security price might be difficult, given the multiplicity of variables and innate complexity of expectations, but even broader market predictions have turned out to be mostly incorrect. Read more.

Forecast Errors
Volume 2, Issue 16, April 20, 2015

A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.

Manufacturer Eliminates Forecast Errors Moving To Pull-Based Replenishment 

A major medical device manufacturer moved from manual processes to a cloud-based automated system. By deploying Electronic Kanban the manufacturer, their customers and their supply chain partners benefited by an improved responsiveness to customer demand by transitioning from push or forecast-based production to pull-based replenishment, thus eliminating forecast errors. The new system allowed them to manage inventory and supply chain execution across their extended enterprise value chain. Read more.