Communications Technology and Supply Chains
April 6th, 2013 12:18 pm Category: Optimization, by: John Hughes
There is nothing fundamentally new in the area of Supply Chain management! Supply Chains have existed ever since some caveman somewhere decided to make specialty dinosaur clubs from a particular kind of really hard wood and very sharp rocks that he got from two other troglodytes over in the next valley. What has changed however is the nature and speed of the communication that occurs between the participants in a Supply Chain, and the ability of those actors in the process to keep and use past information for making decisions.
In my current job in Supply Chain consulting, I frequently work with Production Schedulers. These are folks who I have a lot of empathy with, since once upon a time, a long time ago I actually started my career as a production scheduler (and no I was not involved in the dinosaur club market!). And I was recently thinking about this idea that what is new in the area of supply chain management is a result of the way we communicate today as compared to the past.
I hate to admit it, but “back in the day” when I was scheduling, computers were huge boxes controlled by a phalanx of support people in separate departments, if not different buildings. They were not the practical job-aids that they are today. And if you used the word internet, people would have thought you meant to say ‘hairnet’. In building a schedule the basic tool was a board where I would physically place magnetic strips that were marked to indicate which products should be produced on particular pieces of equipment.
The communication that occurred was in the form of either paperwork carried in the interoffice mail, phone calls, or face-to-face conversation. So if a particular manufacturing process was running late, there would usually be a tremendous time lag before the scheduler would find out. Or if there had been some major snafu somewhere either in my own organization, or in any of the suppliers’ plants, I probably would not hear about it until I proactively asked. And of course from the customer’s point of view, they couldn’t simply change their order and email (what’s that?) me the new information. Obviously there was no real-time tracking of a truck’s location, and whether or not it was broken down or stuck in traffic on the N.J. Turnpike. And of course because there were no computers, I could never really be sure as to just how much product was available to ship to customers. Although the paperwork might say that there were 20 pallets on hand, the guys out in the warehouse might have lost track of where exactly all of those pallets might be.
What this all inevitably led to was a lot of extra inventory being carried at every stage of the Supply Chain. This was because you always wanted to try to have a little extra cushion built in to cover yourself for the unexpected. As a scheduler, I would catch a lot of grief (a nice way of saying you know what) from my boss if a production line was to shut down because they ran out of the intermediates or raw materials needed to keep running. Or if I committed to a customer order of 15 pallets on Wednesday, but the shipping department could only find 14 pallets, there was “hell to pay”. I can remember literally climbing over the tops of shifting and unstable pallet stacks (OSHA would have had a field day), and shining a flashlight down the gaps looking for inventory that a “3 x 5” index card said was still in the warehouse somewhere.
And I don’t think the comparison of my experience vis-à-vis schedulers today, is any different than the comparison of those who did scheduling in 1900 versus me in 1974. In 1900, telephones were only just coming into widespread use, and typewriters were a comparatively new-fangled gadget. Ultimately, Trog (the son of the caveman who I mentioned earlier) was able to streamline his father’s Supply Chain tremendously when we was able to get the customers, as well as the wood and the rock guy, to start using that new concept called “writing” (of course which language to use could have been an issue).
The field of Supply Chain management will always be at the mercy of communication technology. Over time, Supply Chains will continue to morph into more efficient contributors to organizations’ bottom lines as the ability of humans to communicate with each other evolves.