Back Order Black Holes

The Problem – How many Black Holes are out there?
Purchase orders are the lifeblood of B2B commerce. For sellers they build the “top line” that drives their businesses. For buyers they initiate procurement of materials needed to make and sell their products. Millions of POs are placed every day.

Think, then about the multiple items on these orders. It’s common for businesses to place POs for multiple items. It’s the normal way..

How to Design Warehouse, Distribution House / Center Network?

Whether you are adjusting your current warehouse network or designing a new one…whether you are closing warehouses or improving customer service…and especially if you are reducing distribution costs, these six Steps will simplify your effort and streamline the process.
STEP I – Determine your Objectives
These are several objectives you might seek. Three of the..

The Ultimate ABC Approach

If the ABC inventory management approach is a good idea, why not ABCD or ABCDEF…and so on? If three classes of inventory help it perform better, why not more classes? What’s the right number? How about the “ultimate ABC” – a class for every item?

While desirable, this is not practical (usually not even possible) using the ABC approach. However, a new method, Optimized Inventory Management, does exactly that..

“The Optimizer” Creates New Highs and Lows

Dramatic. The word gets used to the point of exaggeration, but it’s the right word to describe the changes made at Cummins Mid-States Power of India-napolis during the past year.

This engine distributorship was the test case for a new parts inventory management system developed by Cummins Engine Co. in conjunction with a Chicago-based management consulting firm.

Order Sourcing–The Hidden Gold Mine

Sourcing orders – deciding when and from where an order should ship – is a hidden gold mine for many companies. Both cost reductions and service improvements are available from just slight changes in the way sourcing decisions are made. Let’s examine a hypothetical but all to common organization, how they source orders and its consequences. A manufacturer of electrical products distributes a line of about 4,000 items to distributors nation wide.

Inbound Logistics

The Network Is Not Enough

Most logistics professionals are familiar with designing warehouse networks where the objective is to determine how many warehouses a company should have and where they should be located. Establishing the network, however, is not enough. It leaves open too many other questions. Moreover, just adding warehouses to an existing network could actually decrease service to the customer to say nothing of the added cost it would take to operate.