The coronavirus crisis has accentuated the need to control resources, and in particular the equipment and load carriers without which transport cannot take place. A motorbike cannot be delivered without a base, a piece of glass without a trestle.
In an economy where international exchanges in real time are increasingly numerous, and where the search for productivity is becoming a crucial issue, the logistics sector continues its digital transformation. Agility and reactivity have become essential in order to handle a constantly growing number of flows.
Jean-Marc Soulier, director of the Supply Chain practice at Wavestone, believes that digitalisation will make it possible"to increase the speed and agility of companies, to have better control over their network of suppliers (ranks 1, 2 and 3), to know in near-real time the state of their stocks and capacities, and to be able to plan and replan at high speed".
One of the main issues to be resolved is to have enough assets available on loading sites to be able to meet future orders, while keeping a reasonable safety margin on the size of the fleet.
So what consequences can a poorly conducted inventory have on your logistics performance? Here are our top 3.
Fleet size is not adjusted
Supply chain actors regularly invest in equipment on a localised basis, by branch or by country, and in different types of equipment depending on the needs of the operation.
In cases where the activity concerns just-in-time flows, such as in the automotive industry, responsiveness to an order is essential. This delocalisation of resource management and customer urgency pushes manufacturers to increase the size of their fleet, for security and to respond to seasonal variations. This can be costly.
Today, real-time inventories are generally based on declarative data from the field, which are manually added to the TMS and WMS of internal systems. Each country or BU often has different software. An annual physical inventory can also be organised at company level.
As Lucie Vauché, innovation project manager at FM Logistic, explains in this interview:
"From an operational point of view, [...] these are quite heavy processes. And when we have to carry out a fiscal inventory, i.e. the annual inventory, verified by the clients' auditors, we are under pressure. The entire warehouse has to be inventoried in a limited amount of time, often at the weekend. This means that we have to plan even more resources for this period.
One of the solutions to avoid these asset shortages is to have real-time visibility on the number of assets at each loading site by asset type.
The use of equipment is diverted
Warehouses need to store a certain volume of goods in order to be transported to their final destination. However, many companies do not have enough storage space and therefore divert the use of certain materials in storage, both inside and outside the factory.
This use of the equipment is likely to cause shortages of availability because it is diverted from its original purpose. This can also be the case at the customer's delivery site, which has not finished unloading its stock and takes advantage of this available equipment to store its goods.
Thus, when the investment budget at the beginning of the year did not take into account these diversion effects, a lack of equipment can impact the entire network.
Imbalances appear in the distribution of materials between agencies
While the availability of equipment is a prerequisite for the smooth running of logistics, inventory imbalances appear quite quickly between factories, on flows that are mostly long-distance or international.
To optimise the size of the fleet, companies often use a logic of pooling resources in the network. Without granular, real-time control of the distribution of these materials or min/max rules on the number of equipment units to be used at a given time (a number that is likely to change according to the transport plan and variations in customer orders), differences can arise between different countries or agencies.
Let's take the example of Saint Gobain Glass: each of the 18 factories must have a minimum number of trestles of each type ready for use at all times: no trestle, no delivery.
In conclusion, taking the digital turn to finely control asset availability and being more proactive about the use of your equipment facilitates inter-agency pooling and guarantees the customer promise of OTIF deliveries.
Want to learn more? Schedule a meeting with our team.