3-D Printing, Conventional Manufacturing at Risk

The capabilities of 3-D printing hardware are evolving rapidly. These machines the begin by printing simple plastic items can now handle a range of materials from titanium to organic materials like human cartilage. Not only does this technology allow for a spectrum of materials but allow  for production of fully functional components including LED’s and other electronics.  The ability to create complex items with mechanical and electronic components will make 3-D printers a viable alternative to standard manufacturing.

The technology is rapidly improving and costs are decreasing. Larger and more complex components, increased precision , and higher speeds is just the tip of this iceberg ready to sink the manufacturing economy. In my opinion it is not a matter of if 3-D printers will become a staple in every house but when. Just like how the personal computer invaded in the 1990’s, 3-D printers will rock the foundation of business.

Expect 3-D printing to:

1. Change the design, production and logistics of products
2. Influence manufacturing strategies
3. Become highly profitable
4. Change business models to maximize product design revenue
5. Quickly and continuously improve capabilities
6. Make many manufacturing facilities obsolete

3-D printers still have many markets to profit from before entering our homes. From a historical perspective, 3-D printing has a clear path through corporate America.  Just as computers made their way from research to business, 3-D printing will replace many conventional manufacturing processes.  They will eliminate the need for specialized machinery, they will reduce development time, and reduce the waste of raw materials.  Research suggests that 3-D printing, also known as additive manufacturing could reach $1/2 Trillion by 2025.

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Global Supply Chain Insights: Global Healthcare Logistics 2014: What to Expect

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Critical Supply Chain Data- What Data Should a Company Collect

A major piece of supply chain management is the collection of sales data.  Sales data is extremely important to supply chain analytics and without linking this data to supply chain analytics a management team is missing out on significant insights

The collection of sales data should include as much useful information as possible.  I use the term “useful information” because some information might never be used.  Below an explanation of sales data points needed in supply chain analytics, the end goal being the creation of demand forecasting models. Collect total sales for each product or service and in a time series. (for supply chain purposes you don’t need much customer information but the location of each sale should be recorded for more advanced supply chain networks)
Information to Record

• Average Demand
• Demand Standard Deviation
• Cost of over producing
• Cost of under producing

A demand forecasting model will help management decide when to produce and how much to produce for tangible goods. For intangible goods forecasting models will help decide how much capacity is needed and when it is need to maintain an optimized service level

To Establish appropriate models a company should record also these operating metrics

• Record and measure the average lead time in a appropriate units (hours/days/years)
• Demand rate (items per year)
• Setup costs / ordering costs
• # of units to purchase at a time
• Average Inventory levels
• Purchasing Costs

These 6 pieces of information can be used to understand your supply chain system and how to optimize your procurement activities and production activities.

Hope this information helps and if you would like to know more please contact us through our contact us page. Thank you

Supply Chains increasing Brand Equity

Its hard to talk about efficient supply chains without talking about Amazon.  Amazon in not just an online retailer but a sophisticated Supply chain system, allowing fast delivery through an advanced logistical network.  Most customers of Amazon do not realize the massive infrastructure created for high service levels but this supply chain network is the fundamental reason for Amazon’s success. 

CEO Jeff Bezos, has continued to allow large investments in new distribution centers to strengthen Amazon’s Logistical capabilities while forgoing short term profits. Amazon’s Plant, Property and Equipment rose from $4.4 Billion in 2011, to $7 Billion in 20012, and $10.9 Billion in 2013  This long term strategy is paying off.  Amazon’s Revenue has increased from $48 Billion in 2011, to $61 Billion in 2012, and $74 Billion in 2013.
The video below show's Amazon's largest distribution center

Amazon Supply Chain investment has helped their brand in several ways.

• Building Trust- In amazon’s early years they noticed that many customers doubted the services
• Faster Process- Customers enjoy less hassles and an easy shopping experience
• Increasing Sales- Using purchasing analytics, Amazon found a way to suggest products
• Amazon Prime- Paid subscription for Amazon’s customers that waved shipping costs.

Another Organization to consider how a supply chain can effect branding is Zara.
Zara is a clothing retailer that deliveries trendy clothing through an efficient supply chain network. While the company is built on using technology to share information across the company, i.e. digital order forms transmitted via handheld devices, Zara does not take full advantage of the many possibilities available to help improve its business. Like Amazon, Zara has used their supply chain to establish their brand.
They use the information gathered in each store to optimize their production. They match demand with production to optimize inventory levels of each product.  Without this process their brand of being a trendy clothing store with a constantly rotating selection of fashion products could not be possible.
They are often described as an information age retailer. The information age, commonly called the computer age, is characterized by the ability of individuals to transfer large volumes of information quickly and easily. This digital revolution shifts traditional industry structure into a structure that heavily incorporates the collection and analysis of information.

Below is a video of Zara's supply chain

An information age organization adopts the use of technology to streamline how particular responsibilities were formerly completed.  For example, computers can be used to automatically process data, allowing analysts focus solely on relevant analyses.  Companies can also take advantage of the latest technologies to perform work on massive scales that save time by sharing and utilizing data.  Communication within the organization is more diversified, as information flows fluidly across all levels of the organization.  This helps in decentralizing the firm, as more people have access to important information that helps with decision making.  Information age organizations take full advantage of available technology to continuously improve upon existing processes, including but not limited to manufacturing and information sharing.
Author: Peter Klausz
Consultant at Operation Consulting Group

Supply Chain and Logistics

Ensuring Success through experience and expertise 

Procurement, Transportation, Project Management, and Logistics

The successful execution of every project requires experienced management to design and implement operations. This begins with detailed planning, structuring contracts and documentation to align company goals with your supply chain; daily management of projects including special efforts for complex endeavors; and effectively managing the supply chain and logistics to ensure proper on-going operations and maintenance.

Operation Consulting Group is qualified to handle large and small commercial organizations.  Our team addresses all the requirements for Supply Chain Management, Contract Strategy & Procurement Operations, Project Management, and Logistics.

Supply Chain Management Company Hits Milestone

This weekend was a milestone for operation consulting group.  They gained their largest client, a fortune 500 company who asked to remain anonymous.  Supply chain management consultants have made progress.