Daily Archives: June 27, 2010

Three Great Tips for Redesigning Your Logistics Network

A recent article in Logistics Management contained 6 Network Redesign Tips designed to help you reduce distribution costs. The following three tips are particularly relevant regardless of the type of supply chain you operate:

  • Being Green Can Bring More Green

    If it’s truly green, it saves you money. If a solution that purports to be green increases costs, then you can be sure it’s another example of greenwashing, because truly green solutions reduce the requirements for energy, water, and other natural resources, which ultimately decreases costs. Examples given in the article include replacing high-intensity discharge lights with energy-efficient fluorescent lighting, installing solar panels, and utilizing fans for air circulation, but there are dozens of ways you can reduce costs. See the green and sustainability archives for other items.

  • Get Creative With Transportation

    As per the article, start by finding ways to eliminate empty miles and increase truckload utilization, but don’t stop there. It’s not just plane, train, and truck … there’s also bus and even automobile. Busses often have empty space and are used in some countries regularly to haul small loads, and sometimes you should off-load your smaller shipments to Fedex and UPS who use smaller, energy efficient vehicles.

  • Create an Off-Shore, On-Shore, Near-Shore Blend for Flexibility

    The last thing you want to do, as a result of a supply disruption in your factory half-way around the world, is expedite multiple shipments by air that would normally go on a single ocean carrier. Not only does this send transportation costs sky-high, but it can also increase your carbon footprint. (Yes, ocean carriers, which aren’t subject to the same clean-air requirements of land-based vehicles, are dirty … but your footprint is often just a fraction of the carbon-produced as you’re sharing the load with dozens [or hundreds] of other shippers. However, if you’re filling multiple planes worth of merchandise, that carbon footprint adds up fast.) However, if you also sell into foreign markets, the last thing you should be doing is on-shoring everything. The best strategy for today’s multi-national is a blended strategy. This will minimize disruptions and costs.

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Want More Supply Chain Profits? Take a Page from David Suzuki’s Notebook.

David Suzuki recently gave the keynote at SAP Canada’s Sustainability in Business Summit. ComputerWorld has been kind enough to put the most relevant part of his keynote on the web on the ITBusiness.ca site. In brief, he says nature has to be the bottom line, and he’s right.

Think about the following facts:

  • Every time you use a gallon of water, that costs you money.
  • Every time you use a watt of energy, that costs you money.

    And now that carbon tariffs are coming on-line, it costs you even more.

  • It costs money to mine raw materials.

    Which get more expensive as supply decreases.

  • It costs money to produce and distribute products.

    Energy costs, carbon costs, and oil costs.

  • It costs you money to dispose of waste.

    No one wants a landfill, and someone has to hall it away.

  • It costs you money to dispose of end-of-life products.

Now, if you would design for recycle:

  • You’d use less water producing every component you re-used.
  • You’d use less energy producing components.
  • You’d need less raw materials, as you’d be getting them back every time your customers upgraded.
  • Production would cost you less.
  • You’d have less waste to dispose of.
  • You wouldn’t have to worry about disposing of end of life products.

    They’d be recycled into next generation products.

Plus, your profits would soar as your green brand gained share in the minds and hearts of consumers everywhere. So take a page from David’s notebook. Put nature first and watch your bottom line improve. Going green saves green.

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