Where should warehouses be located?
Thu, 9 Sep 2010
Steve Walker believes it is time that those involved in the supply chain undertook more grown-up thinking
With the start of a new school year, it’s the time for a whole group of kids to move from short trousers to longs – well, at least metaphorically, if not literally any more. It is time to move up a gear, take more responsibility and expand horizons.
And it makes me think that it is time that those of us involved in the supply chain undertook more grown-up thinking as well.
How often do we ask ourselves ‘why do we do it this way?’ or ‘why do we actually collect this information?’ or ‘is this the best place to locate this function?’
With all the changes in production and transport over the last decade, it is amazing that there has not been a revolution throughout the total supply chain. Great changes have been made in some ways, but there are still many areas which could be addressed to improve efficiency and cut costs.
We have seen a huge shift of manufacturing to Asia, and the Indian sub-continent. But how many companies have taken the next logical step and also relocated their distribution centres (DCs)? It may not work for every supply chain, but it is certainly worth asking the question.
It has been a well-established ideology that all goods should be imported into one regional or even global distribution centre and then further transported either to smaller national hubs or direct to store or manufacturing plant.
In some cases, this could mean goods produced in Asia being shipped to a central distribution centre in the US and then being shipped again to the US, Canada or even to Australia. Surely, it makes sense to explore the option of basing the distribution centre in Asia, near the manufacturers, and shipping more directly to the end users?
This strategy also allows manufacturers to respond more quickly to changing patterns of demand, ensuring the goods are available where customers want them.
The most important thing is to ask questions – challenge the customers, the shippers, the transport providers to look at every step of the supply chain and ask ‘does this make sense?’.
If IT can have a white board mentality, why can’t supply chain? In fact “why”, asked continuously, is the key word to unblock many a supply chain.
Do it today – you’ll be amazed how often a small change can make a big difference, and let’s hope those kids work hard, otherwise they could end up falling into freight forwarding like many of my generation.
Steve Walker is Chairman of SBS Worldwide
And it makes me think that it is time that those of us involved in the supply chain undertook more grown-up thinking as well.
How often do we ask ourselves ‘why do we do it this way?’ or ‘why do we actually collect this information?’ or ‘is this the best place to locate this function?’
With all the changes in production and transport over the last decade, it is amazing that there has not been a revolution throughout the total supply chain. Great changes have been made in some ways, but there are still many areas which could be addressed to improve efficiency and cut costs.
We have seen a huge shift of manufacturing to Asia, and the Indian sub-continent. But how many companies have taken the next logical step and also relocated their distribution centres (DCs)? It may not work for every supply chain, but it is certainly worth asking the question.
It has been a well-established ideology that all goods should be imported into one regional or even global distribution centre and then further transported either to smaller national hubs or direct to store or manufacturing plant.
In some cases, this could mean goods produced in Asia being shipped to a central distribution centre in the US and then being shipped again to the US, Canada or even to Australia. Surely, it makes sense to explore the option of basing the distribution centre in Asia, near the manufacturers, and shipping more directly to the end users?
This strategy also allows manufacturers to respond more quickly to changing patterns of demand, ensuring the goods are available where customers want them.
The most important thing is to ask questions – challenge the customers, the shippers, the transport providers to look at every step of the supply chain and ask ‘does this make sense?’.
If IT can have a white board mentality, why can’t supply chain? In fact “why”, asked continuously, is the key word to unblock many a supply chain.
Do it today – you’ll be amazed how often a small change can make a big difference, and let’s hope those kids work hard, otherwise they could end up falling into freight forwarding like many of my generation.
Steve Walker is Chairman of SBS Worldwide
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