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Changing supply-chain thinking

May 4, 2010
FT. LAUDERDALE. How goods are moved end-to-end within both domestic U.S. and global supply chains is changing and changing fast --thanks to increasing pressure to cut costs while boosting operational efficiency and productivity
GPC’s Charlie Chesnutt

FT. LAUDERDALE. How goods are moved end-to-end within both domestic U.S. and global supply chains is changing and changing fast --thanks to increasing pressure to cut costs while boosting operational efficiency and productivity.

And, according to both speeches covered and interviews conducted here at software provider Manhattan Associates annual “Momentum” user group meeting, all the parties involved in making supply-chain decisions will undergo seismic shifts in their transportation strategies – especially truckers.

“The days of a shipper being just a shipper, of a trucker being just a trucker, of a [freight] broker being just a broker, are limited if not gone,” Mike Glasgow, carrier account executive for Manhattan, told FleetOwner.

“Shippers are increasingly trying to streamline their supply chain operations, while truckers are trying to diversify their service offerings to meet broader transportation needs,” he added. “At the same time, truckers are trying to boost equipment utilization and reduce empty miles to improve their own cost structure.”

All of this is taking place at a time when more demands are being placed on supply-chain structures than ever before, noted Pete Sinisgalli, Manhattan’s president & CEO.

“Meeting the complex and varied demands of the ‘anytime, anywhere’ supply chain in today’s customer-drive marketplace requires more than just visibility,” he explained. “It demands unified insight and execution across all organizational and market dimensions.”

As a result, supply chains need to become both leaner in terms of costs and more flexible, added Charlie Chesnutt, senior vp-technology & process improvement for Genuine Parts Co. (GPC) – especially in light of the global economic recession.

“After the experience of the last 18 to 24 months, we know we need to be much more nimble in the future – to drive efficiencies through a multi-divisional company like ours while enabling us overall as a corporation to more rapidly respond to changing business dynamics.”

For example, Chesnutt pointed to the largest of GPC’s four divisions – NAPA, a $5.2 billion auto and truck parts distributor that accounts for 54% of GPC’s overall business.

“NAPA alone has six supply chains – added to those of our other three divisions,” he said. For years, GPC functioned with a decentralized supply-chain structure, with each division within the company deploying its own strategy, infrastructure and assets. Now, that is changing.

“The theory is that what we move should not matter – be it ball bearings, spark plugs, or office furniture. We’re all using warehouses, trucks, and technology to manage it all,” Chesnutt said. “How the physical supply-chain infrastructure is laid out might be different, but the software managing everything can be the same – that we have more commonalities than we think, and leveraging those can make us more efficient.”

He noted GPC right now is in the midst of deploying a suite of Manhattan systems designed to do just that – systems expected to help increase GPC’s overall inventory efficiencies 8% to 15%, boost line fill from 94% to 96%, improve order accuracy by 60%, and spur volume throughput by 30%.

“It’s all about more precisely establishing the ‘what, when, how much, and why’ of the shipment and storage of goods so our business as a whole can benefit from this supply chain shift,” Chesnutt stressed. “Fewer touches, with more inventories in the right place at the right time increases efficiency and increases the ROI [return on investment] the supply chain brings up.”

About the Author

Sean Kilcarr | Editor in Chief

Sean reports and comments on trends affecting the many different strata of the trucking industry -- light and medium duty fleets up through over-the-road truckload, less-than-truckload, and private fleet operations Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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