A lot of manufacturers tend to face and address common inbound logistics challenges and one area of improvement that many don’t consider is the discipline of production logistics. This is when it is ensured that each machine and workstation deals with the right product in the right quantity and quality, at the right time.
Production logistics is what connects inbound materials to on-time delivery of outbound products and so it is very crucial that much attention is allocated to it. By having the right blend of technology, equipment, and disciplined processes, you make certain that materials get to where they are needed in order to have production smoothly flowing. This increases an operation’s efficiencies and saves costs for companies.
However, the question now is – When do you know it’s time to improve your production logistics? Let’s discuss the five signs to look out for.
Production logistics will definitely cause damaged parts and supplies and end up damaging the product in the end. Damaged items many times are a result of too many hand-offs among suppliers, or too many workers handling parts and materials. The more touchpoints, the higher chances there are of damage.
High Inventory Costs
Keeping more inventory on hand than necessary or needed often leads to high inventory costs. These costs then increase working capital and reduce inventory turns. At times you may find that having unnecessary freight costs like multiple feeding the plant, can also cause high inventory costs. The core problem for all these high costs might be traced to poor visibility or poorly conceived and executed production logistics processes.
Myopic View of Inventory
Another sure sign of production logistics is when line workers struggle to find materials. The second indicator is when there is too much or not enough inventory of an item. The final problem to look out for, is when there is confusion about which supplier is delivering which items and when – often caused by too many hand-offs between suppliers before an item heads to production.
Line Delays and Stoppages
A pattern of delays shows the need to review production logistics as the cause of the problem might lie in poor inventory visibility, inventory errors, damaged parts or suppliers, or any combination of these issues. A production line delayed or stopped once, is once too many.
Right time, wrong part
Parts can arrive at the production line when needed but it is a problem when the wrong ones arrive instead. This error may happen because the supplier shipped the wrong part to the plant but workers added it to inventory anyway. It may also occur because someone recorded wrong data into a spreadsheet as part of a manual process for inventory tracking. Or it could be that a supplier’s IT system may not be in sync with the plant’s IT systems that connect materials sourcing and production.
Many companies ignore these signs and that is the biggest mistake. Consider having a production logistics expert called in to evaluate the inbound materials flow from the time they arrive on site until they reach production.
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