The Route To Efficiency Starts in Data Management!

You may be asking yourself why is this CEO talking about data. Well, it's really simple, in the modern data-driven logistics operations, it is the route to efficiency. I have always found it unusual that many supply chains are missing one of the most basic fundamentals; the maintenance of data. It is also important to note that any advanced approaches to digitalisation require impeccable data management before commencement. Over my years, data has caused me so many challenges in new implementations, and in some cases has caused operations to grind to a standstill. So, I can think of no better thing to help others and make people's lives better than to share my thoughts in this area. Firstly, I wanted to share the challenges of not maintaining the master data:

• Shipping Costs - These can be directly impacted by incorrect data measurements. The first issue is transport planning, if cargo sizes are incorrect the transport department might be using the wrong type of vehicles, using larger vehicles than actually required. Also, if you have partial loads or cartons to transport, the incorrect cargo measurements may mean your carrier will bill you on this incorrect data, which may mean you're paying the incorrect amount. In the end, inaccurate data makes it is almost impossible to verify carrier's invoices against reality.
• Packaging Costs - These days due to e-commerce deliveries packaging costs are becoming a large cost to the supply chain. Therefore incorrect master data may lead you to select inappropriate packaging. We have all received through our door the box that seems far too big for what we have purchased, stuffed full of void fill. This is all adding to increased packaging costs.
• Pick Productivity - Efficiently configured warehouse layout designs can enable optimised pick routes if you understand the individual SKU dynamics and use ABC analytics. For this to be truly optimised, you need the product weights and dimensions to ensure the picker can operate in the most effective manner. Without this, you are reducing labour productivity and simply adding costs to your operations.
• Storage Design - Optimised warehouse storage design is simply impossible without understanding the correct master data. Imagine a warehouse with cartons stored where pallets are supposed to be and vice versa, simply stated ... "chaos!" Why spend more on overflow warehousing or increased racking, when with the correct efforts on data, the warehouse footprint can be designed to meet the exact needs.
• Stock Inaccuracy - Units of measure and pack sizes, can add unnecessary complexity to warehouse operations. When new products are established, careful thought should be given to the simplification of units of measures and standardisation.?

Let me highlight the issue with an example:?

1 pallet = 50 cases = 500 sleeves = 50,000 pieces, the RF device asks to pick 5 units. Without the appropriate master data management and pick clarification for the operator, mistakes will surely be made.?

The worst I have ever seen, was in a DIY retailers warehouse, that had 67 different units of measure within their ERP in English (meters, piece, carton, case, pallet, litres, gallon, etc.) You can imagine the training requirements for a Thai workforce.

• Storage Constraints – Storage requirements of products are essential, (temperature regime, dimensional storage constraints, hazchem storage needs, etc.) If this is not configured correctly in systems it can lead to product damage and potentially life-threatening environments. For instance, I once walked through a warehouse and found 12 pallets of mop buckets in the freezer, and flammable products stored across the entire warehouse, due to master data inaccuracies.

"So considering data is so important, why do we allow things to slip?"

Supply chain partners don't understand the importance of accurate master data on the total supply chain. How many times have we heard the following?

“We have other priorities right now, but I will get back to it.”

“It's not my job to do that it’s operations job!”

“I am bonused on selling, not on the efficiency of getting it there!”

“The data is already wrong, so why should we do it?”

Master data is not the job of the junior administrator and the receipt employee. Today, it is the most critical requirement for the Supply Chain Manager. If you are the head of a supply chain, it is vital that you drill this into the management routines of your departments. Handled well it enables you to unlock the efficiency of your operations and customer delight, instead of chaos, unsatisfied customers, and tension in the workplace.

Some tips that can help:

• Build it into a routines - Generate KPI's and task your managers to routinely review and report on data across the business.
• Check, Check and Check -?Inaccuracies in Master data are easy to miss, and trading partners don’t help.?

For example:?

• Suppliers will falsify their cargo dimensions to reduce their shipping costs.
• Buyers will set up the ERP master data in its most simple form, 1x1x1, and 1kg without considering the true details.
• Replacement products are configured totally differently from the original products, and the data is maintained to the original.?

The devil is in the detail, and I suggest we dive in.

• Invest in dimensioning equipment -?Great devices, like ‘Cubiscans’, enable you to quickly capture dimensions and weights. New features include the possibility to be linked to many warehouse management systems, directly updating the master data.
• Get out into the warehouse and look - Too many people enjoy looking at their computer screens and don't physically verify. Walk the floor and see for yourself, it will surprise you what you find.
• Publicly reward and praise - Generally, a great culture comes from having a positive rewarding environment. Make sure you recognise those that are doing a great job in this area. On the negative side, nip in the bud any mistaken lapses.
• Simplify and standardise - Standard pack sizes and approaches simplify everything, also naming conventions should include vital standardized data. Ensuring your trading partners follow these standards will enable efficiency in your supply chain.
• Go one step further with trading partners - The more you make data a supply chain initiative, the better. This helps the entire supply chain bringing benefits to everyone. The best way to do this is through creating collaboration committees with specific agendas to generate joint benefits.

I want to pass on very important advice, specifically, to those who work in the third-party logistics industry. Inaccurate master data is the most common reason why implementations fail. Put your best people in this area, check, double-check, physically verify, and leave extra time in your stock transfer process to verify this. If it does not, stop and fix the problem, don’t carry on, and come back to it.

In sharing this insight I hope others will avoid the challenges that I have encountered over the years. Trust me, better to have it right the first time than to have to fix it later.

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