RYAN KRISTJANSON

SUPPLY CHAIN

MANAGEMENT

Supply Chain Management Today

What is the role fo supply chain management in a typical business?

Production of products requiress components and raw materials that may be provided from many different locations. Eventually these products will be needed to be accessable to the costumers. Without the effortss of Suppy Chain technology, businesses would literally die. There would be huge conflicts with customer demanding orders and the inventory and lead time.

(NOTE: other questions are answered in the interview)

Supply Chain Management Careers

1. Supply Chain Manager

2. Logistics Specialist

3. Director of Materials

4. Director of Purchasing

5. Inventory Control Manager

Key Supply Chain Terms

Lead time: the total time needed for an order to be processed

Cycle time: The time required to complete a unit of work, generally the total of travel time, plus load storage or retrieval time

JIT: (Just In Time) goal to eliminate sources of manufacturing waste and cost by producing the right part in the right place at the right time

Lean Production: Lean production refers to a production technique where production methods are streamlined as much as possible. The aim is to cut costs by reducing waste and improving quality.

SPC: The Sustainable Packaging Coalition is an industry working group inspired by cradle to cradle principles and dedicated to creating a more robust environmental vision for packaging. Through informed design practice, supply chain collaboration, education, and innovation, the Coalition strives to transform packaging into a system that encourages an economically prosperous and sustainable flow of materials, creating lasting value for present and future generations.

Six Sigma: a systematic method for improving the operational performance of an organisation by eliminating variability and waste

Logistics: The management of both inbound and outbound materials, parts, supplies, and finished goods

Inventory control: the management of inventories, including decisions about which items to stock at each location; how much stock to keep on hand at various levels of operation; when to buy; how much to buy; controlling pilferage and damage and managing shortages and back orders

SKU: (Stock Keeper Unit) A common term for a unique numeric identifier, used to refer to a specific product in inventory or in a catalog

Level Loading: A technique for balancing production throughput over time

RFID: Radio frequency identification technology allows physical objects to interact with sensors and actuators via radio waves. In its simplest definition, RFID is a technology that uses radio frequency to identify an item. Unlike barcode technology, RFID does not require an unobscured line of sight to scan an item. Hundreds of items can be scanned simultaneously with RFID. Therefore, it reduces the human error element from item identification and speeds up the process by reading a large number of items in one instance.

Barcode scanning has been the major source for tracking assets in supply chain solutions and inventory controls for a long time. Barcode tags are small, relatively cheap, easy to produce and provide an inexpensive inventory tracking system for small and large businesses. RFID tags, on the other hand, are more expensive to produce and consume, although they provide a host of information for businesses. While RFID solutions are still in the infancy stages, there is need for a system that integrates and synchronize barcode and RFID data while companies are still in the process of transitioning from barcode tags to RFID tags.

http://www.ibm.com/developerworks/websphere/library/techarticles/0705_tandon/0705_tandon.html

Supply Chain Management Mentor:

GUNNAR ANDERSEN
Senior Director of Mobile Supply Chain Operations and Information Technology
ARAMARK Uniform and Career Apparel, Global Sourcing

Background:

"I started in the early 80s as a computer programmer. And I've always worked on supply chain software. I went up through the ranks of IT, and I have been a director of IT for couple different companies. After I got my MBA, the operations director position opened up for me. And I have been here for a few years."

Interview:

Q: What are the likes and dislikes about your work?

A: I like the fact that it is not necessarily the same thing every day. You set up processes and controls, but at the same time there is something different going on every day. Right now there is flooding in Vietnam. it just started Thursday; people cant get to the factories. We are affected by everything! There is always something. But the point is if you can measure it and if you can manage it! I don't need to manage specifically the ghost [infestation of a factory in Pakistan] but if I can manage that our costumers are not affected by the ghosts. So the challenge is measuring so you can manage it right - which is not too much inventory but the right amount of inventory, weeding out the bad suppliers, you drop the factories where the infrastructure is not good, [etc...]

[These challenges are both likes and dislikes]. I don't like coming to work and get slapped with a problem that cause me to loose my gray hair.

(He later spoke of how he and his team uses creativity to optimize the process)

Q: What are some crucial skills or talents needed for this type of work?

A: Creativity! Because there are a number of supply chain organizations, but the global supply chain theory is still relatively a young industry. People are still trying to figure out how to figure it out. So the most successful companies are the ones that have people who can come up with creative solutions, to handle the issues. It helps that I have a strong IT background, because I see problems and I want to wrap a system around it, and I know how to to do that. The challenge is if all you are is a systems person, systems people want to wrap system around the whole process and I absolutely disagree with that. When you put a computer system around your entire process, you are pouring concrete around your business. What you are saying is, “I am not flexible. This is how I do things.” So you need to have system that are pliable, agile, flexible.

The supply chain is extraordinary dynamic.

A big part of the job is keeping up with whats going on globally, and adjusting your strategies to a changing world.

The Supply Chain is always changing. It is always changing. So, if want to learn it and then have to adapt, if you want to be in that kind of business where you are constantly adapting, I mean, I love it! I feel I am involve; I feel like I am a member of the global community. Because I have to be concerned about things going on. It's neat, I like that.

Q: What is your projection of this type of work? Is it stable, increasing, decreasing?

A: I have seen a lot of inflation in Asia – China, Vietnam, Cambodia. So things are slowly moving further and further west -India, Bangladesh, Pakistan, Africa. If gas prices return to its peak 6 months earlier, things will remain on this hemisphere - the freight costs would be too high elsewhere. So, as long as fuel is cheap, you'll continue to see a lot of production coming out of Asia.

Q: What are some developments that are streamlining your work?

A: For me, it is real important when you are looking at your work and decide where it is that you compete as a company. We don't compete on our ability to forecast better, and we don't compete on sending emails better than our competitors, or making better spreadsheets. The point I'm making there is as a result we will buy an email system, not build it. We'll buy Microsoft Office, We'll buy forecasting systems. So when you are laying out your strategy from a technology perspective you need to decide where you are going to compete, you want to create some kind of competitive differentiation – something that makes you different than the competition. So for that reason, we tend to be very careful about what we're going to buy versus what we are going to build from a software perspective. So we buy a pattern making system – we're not saying that we make better pattern making systems. We buy a forecasting system, you see? But where we build is on the execution side. The execution side is production planning, inventory planning, Order planning, production scheduling. We actually build all that software ourselves. So we can decide this morning we need more of something else, and before lunch it is in production. Thats how we choose to compete. So anything on the executive side, it is home grown.

Q: Where are the opportunities?

A: I think it is all over the world. I would think that if you are going to be really good at supply chain you would want to start in a factory somewhere, in a sense of what goes on in a factory. So, then you can do production planning in the factory, engineering work in a factory. Then you can come back and work in the Corporate office.

Q: What are some Salaries of these types of jobs?

A:

Supply Chain Support Analyst entry level: $45-55K

Senior Supply Chain Support Analyst: $57–69K

Manager: $73-89K with 20% bonus

Director: $86-$105K with 20% bonus

My Director of Supply Chain that reports to me get ~$115K with 20% bonus. For my IT guys, I pay them ~$100K with 14% bonus.

Q: Does your work invovle much of RFID?

A: I don't use RFID because I don't see the value of it. We don't do retail. I can see how it can help in retail, but we don't do retail.

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"One of the problems with Supply Chain in general is that people 15 years ago, the factory was across the street from the distribution center. If you needed something, by the end of the day you'd have it. Now, Congress has passed laws, the factory went to Puerto Rice, then Mexico, then Central America, Asia, or Africa. And as the supply chain became elongated people were using the tools that they used when the factory was across the street. Even thought eh labor was cheaper, people were spending enormous amounts of money on air freight. Because their tools were not sophisticated,t hey didn't need to be sophisticated."

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Gunnar explained to me at one point of an analysis that his company did, comparying the benefit or disadvantage of location of factories. They learned that if the factory across the street from a distribution center was moved to asia, and the steps were accomplished, there was a increase of 87% to 95%, almost 10% increase, or productivity and profit. Very interesting.

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