How to Develop Infrastructure to Support Mission-Critical Logistics
here are critical logistics requirements and then there are mission-critical demands. The difference is end-user impact: a lost customer because of a late shipment, or a lost product line—and countless lost customers—because a critical part can’t be replaced in time.
When companies move high-value shipments critical to business process continuity, time is money and service is golden. Whether it’s a machine replacement for an automotive assembly line or a network router for a brokerage house, the immediacy and unexpectedness of demand warrants a reliable strategy for placing "just-in-case" parts inventory in various locations around the world, then seamless execution in delivering shipments to support end-user replenishment needs.
It makes no difference whether it’s business-to-business or business-to-customer, working within a one-hour delivery window or next-day defined service, replenishing a critical component or routine after-midnight maintenance. Mission critical logistics is a 24/7/365 commitment.
Having resources, infrastructure, and inventory in place are key factors to mission-critical success.
6 STEPS TO SUPPLY CHAIN ENLIGHTENMENT
ASSESS CRITICAL NEEDS Analyze the installation base and explore where strategic stocking locations (SSLs) exist and where parts need to be. At the same time, understand your service level agreements, as well as the pre-determined/contracted delivery times and performance metrics. Can you fulfill expected time-to-market demands from these current SSLs or do you need to put parts in additional locations?
When looking to locate a new SSL, consider these questions:
- Is there sufficient demand to warrant another SSL given the demand and failure history of the installed base you are servicing?
- Do you have a field engineering force or are you outsourcing that function?
- How are you placing demand? Do you have a central call center to place demand or do you rely on field engineers, third-party logistics providers, or suppliers?
- Do you need IT integration?
ENSURE CONSISTENCY AND DEVELOP SOLUTIONS ACROSS MULTIPLE REGIONS Perform a hard analysis of consistency across operating regions, looking specifically at local limitations or anomalies. Go through a needs analysis for each region and assess issues such as local stocking facilities, transportation and delivery services, inventory dispatch services, and real-time inventory management control. Operate globally, but think locally.
STREAMLINE PROCESSES ACROSS GLOBAL IT PLATFORMS Having an established IT backbone to support data-sharing is the glue that holds mission-critical processes in place. A single platform provides seamlessness in plugging in new locations and expanding SSL networks. Without an integrated technology platform, varying service levels and communication disconnects invite critical failures.
A seamless technology platform enables real-time inventory visibility. Because mission-critical logistics goes beyond simple shipment delivery, this comprehensive data and feedback facilitates inventory tracking, ensures accurate replenishment, and reduces capital expenditures. Historical reporting also helps companies benchmark service performance.
THINK IN REVERSE While much attention is placed on the immediate goal of meeting customers’ replenishment needs, there are internal savings to be achieved in quickly recouping used parts as well. There are considerable cash-plus opportunities and cost savings attached to bringing defective products back into the pipeline to be recycled, fixed, or scrapped. If infrastructure and processes are in place to capture demand signals and push product out, consider leveraging this same control to pull high-value materials back into the supply chain.
CONSIDER OUTSOURCING Given the IT sophistication and breadth of resources required to manage mission-critical moves, partnering with a third-party logistics provider that has global SSLs in place, and necessary connectivity, can be a critical success factor.