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Showing posts from January, 2021

Why Does Geography Matter in Supply Chain?

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Why Does Geography Matter in Supply Chain? It should be clear by now that the supply chain network design problem is just as much about geography as it is about business strategy. The two cannot be separated. Take these supply chain considerations for example: • If you have a plant in the interior of China and some of your customers are in New York, you need to physically get the product out of China, across the ocean, and to New York.  • If you make wood products (like paper or boards), you can locate plants either close to the raw materials (forest areas) or close to your customers (usually located a significant distance away from the large forest areas).  As the examples highlight, decisions about the location of your facilities impact many aspects of your business and require you to make trade-offs. Specifically geography drives the following: Transportation Cost Service Level Risk Local Labor, Skills, Materials, and Utilities Taxes Carbon Emissions Written By  ...

3 Inventory Management Techniques

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When businesses don’t have a handle on the activity of their inventory, or worse, track it with outdated spreadsheets and data entry, the rest of the pieces, like order fulfilment, don’t fall into place. When you don’t know how much inventory you have on hand, you can’t make smart reorder decisions. 3 Inventory Management Techniques Safety stock inventory Safety stock inventory management is extra inventory being ordered beyond expected demand. This technique is used to prevent stock outs typically caused by incorrect forecasting or unforeseen changes in customer demand. FIFO and LIFO LIFO and FIFO are methods to determine the cost of inventory. FIFO, or First in, First out, assumes the older inventory is sold first. FIFO is a great way to keep inventory fresh.LIFO, or Last-in, First-out, assumes the newer inventory is typically sold first. LIFO helps prevent inventory from going bad. Just-in-time inventory management Just-in-time (JIT) inventory management is a technique that arrange...