Throughout the industrialized world in most manufacturing enterprises, the changes in operations can be categorized into numerous segments: new methods; innovative concepts; advanced processing systems; and control technologies, along with constant changes in products and packages that find their way into the daily operating schedules. Regardless of the category, these factors always seem to acquire a variety of identification names for application that might not adequately define the functions as initially intended.
From an operations perspective, “just in time” is and might still be an idea with suppliers to deliver materials just in time for use to avoid inventory damage and other obstacles that delay production. “Continuous improvement” came along as an approach for being aware that all things can constantly be improved throughout the operation. There are more examples, but these establish the point. Discussions with users of these ideas found that even though the line was followed, there were many deviations, and the intended results were not always obtained. Why? Research into the concept or idea indicated that basic principles were not fully understood by personnel involved in the application.
That brings us to the supply chain. The terminology of “supply chains” has existed for some time now; however, experience, observation and research into the subject has indicated not only the conditional applications, but also that the overall concept has deviations and interpretations. Exposure to magazine articles, books, seminars and even the syllabuses of college courses offering degrees in supply chain management have manifested a consensus that the topic, in fact, has many interpretations and viewpoints. Yet, what is needed is a simple approach.
From an operations perspective, like the old cliché, “a spade is a spade is a spade,” a supply chain is a supply chain. Like all good things, there is a start and finish with well-defined steps, and that is why looking at the application as an integrated supply chain is important.
When discussing supply chains, one issue is that most contacts using a supply chain idea immediately refer to the final step of the process: distribution. Others refer to warehousing per se and the inventory situation, which is a middle step. Some even refer to the first step — processing materials — especially when new materials are involved. These events indicate that understanding of the term “supply chain” obviously has different meanings and priorities. This highlights that an integrated supply chain is vital because integration is necessary, as each step demands interdependence and, in total, represents a completed cycle of operations. If one reflects on the old-fashioned production planning and scheduling system to see in reality how integration took place historically, the dependence on each step can support an integrated supply chain.
1. Processing: Beverage materials have to be formulated, mixed, filtered, aged or conditioned to become an established finished or partially finished product — if there’s no product, there’s no need to proceed. It depends on the next step.
2. Packaging: Once the product is established, it must be packed into containers with closures and transformed into a wide variety of packaging configurations, such as multipack units or cases. Units or cases are palletized in numerous patterns. Palletized pallet loads or other stacking methods can transport products to storage in a warehouse. If no warehouse, there is no need to proceed. It depends on the next step: a physical warehouse available through an AGV or FLT transport.
3. Warehousing: Once palletized product is stored in an automated or manual stacked facility, the product remains there until there are orders for direct removal. If there’s no removal order, there is no need to proceed. It depends on the next step.
4. Pre-Distribution: Stored product is removed by orders via automated and/or manual methods to the staging area for route allocation or re-sorting. The product is loaded onto various types of vehicles for delivery. If the vehicle remains in the loading area, there is no need to proceed. It depends on the next step.
5. Distribution: Once vehicles are loaded according to route plans, vehicles start distribution to the market for servicing accounts. Delivery vehicles, driver sales representatives and related activities are a distribution cost, as well as any special activities that might be involved in special events and promotions. Delivery vehicles then return to the loading location for restarting the delivery cycle. BI