I enjoy making useful things freely available on Supply Chain View, so it’s good to find other people doing the same thing. There are 57 useful business statistics Excel files to download from the McGraw Hill website (to accompany the book Complete Business Statistics by Aczel and Sounderpandian).
Among others, there are calculations for testing difference in means, linear regression, exponential smoothing, t-tests and (as they say) many, many more.
This is basic stuff, but as usual there is a lack of clear and concise explanations of this on the web. It is also very important, as most methods of inventory control can be reexpressed as some form of reorder point method. Hence this simple introduction. I have also prepared a Reference Sheet that summarises the tutorial and a spreadsheet calculator that you can play with.
Among other things, he sells widgets. I’m not sure what kind of widgets, but he usually sells about 5 each week. Sometimes a few more, sometimes a few less, but usually about 5. Every Friday before he closes up shop, he checks how many widgets he has and then calls his supplier to place an order. The widget supplier is reliable, but it takes him 4 weeks to fulfil an order. Mr Li generally receives delivery of widgets on a Monday morning. Because he orders every week, Mr Li’s average order consists of 5 widgets (though it varies from week to week).
In the normal supply chain inventory management jargon we would say:
Forecast weekly demand (D): 5 units Supplier lead time (LTs): 4 weeks Planned order size (Q): 5 units
With such a long lead time, Mr Li gets nervous if his stock drops too low (if he runs out his customers will go to Mr Zhang down the street). So he doesn’t like to end the week with less than 10 widgets in his store-room.
Posted by: Martin Arrand
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There’s a commercial profile of Aricia Limited in this month’s Logistics and Transport Focus - I’d not heard of them, but it appears to be a micro-consultancy in the supply chain field, run by Kirsten Tisdale who wrote the Focus article.
Kirsten’s website has a one-page document available to download entitled 50 ways to make your warehouse seem bigger without moving the walls. (Look for the link at the bottom of that page.)
It ranges from the obvious (write off and dispose of old stock), through the general (analyse stock cover levels - yes, but how to reduce stock and maintain service…?) to the indirect (label your racking clearly - yes, for all sorts of reasons, not least so you avoid a warehouse clogged with stock you can’t find or don’t know you have) and the off-the-wall (play some upbeat music - I can see where that’s going, but it might make the warehouse seem smaller).
Anyway, it’s well worth a look.
I forgot to mention in my post yesterday about last week’s HELP Forum meeting that Mike Whiting has also written about the air operation during Nargis, both the air-bridge from Bangkok and the helicopter operation in-country. Mike was OiC for Aviation for the Logs Cluster, so this is an authoritative account. You can find his article in the November 08 issue of Logistics and Transport Focus, available online too if you are a CILT member.
The CILT’s Humanitarian and Emergencies Logistics Professionals (HELP) Forum met again on Tuesday last week (28 Oct 2008). It was another interesting session, so I thought I would post a brief report (with a long title). My apologies if I have mangled any of the following in transcribing my notes. For those that don’t know, HELP aims to increase the professionalism and profile of logisticians working in the humanitarian and emergencies fields, and is supported by people working in NGOs, academia, various UN agencies and the private sector.
Update 18 Nov 08 - pdf copies of all the presentations for this forum meeting are now available on the CILT website at http://www.ciltuk.org.uk/pages/nargis
Matthew Hollingworth of the WFP, but now heading the Global Logistics Cluster (for which WFP is the lead agency), gave a very lucid account of his team’s work in Myanmar in the aftermath of Nargis in May this year. The Logs Cluster is independent of the UN, “owned” by a body called the Inter Agency Standing Committee, and its purpose is to “augment and supplement” logistics capabilities, both on the ground during an emergency response and also by developing preparedness.
In Myanmar this meant setting up a logistics hub in Yangon together with five further transit stores closer to the affected region.
It has been a long time since I updated the site, almost a year in fact. Although my last employer didn’t explicitly forbid my sharing my professional thoughts on line, they did make it clear they were uncomfortable with it and I decided to respect their wishes.
But now that I have moved on, I am free to start again. The enforced hiatus has given me the opportunity to reflect on what I find interesting to share with you, and to do some research on which posts get the most interest. The focus will continue to be on solid supply chain issues, while also touching on some more generic process improvement topics.
It is very clear that practical and educative posts are highly rated. In fact, my two posts on how to reduce inventory are in number 2 position on the google search for “how to reduce inventory”, ahead of a slew of consultants and other solutions providers. I can’t help feeling very happy about that - it must mean that fair number of sites are linking to those articles (thank you). I am looking forward to running some more pieces in a similar style.
I have also been working on a tool that can be run in a web browser that demonstrates some of the key interactions in a supply chain or manufacturing operation using a simple simulation. It is called a discrete event simulation model - previously people have developed these as highly specialised and resource-hungry programs, but computing power has come such a long way that we can run a meaningful simulation inside Internet Explorer or Firefox. When the tool is a little more reliable I will make it freely available and use it to illustrate some poorly-understood phenomena, such as the relationship between capacity and cycle time, and how Push and Pull control systems really work.
Posts that link to online materials are also popular. I had a large number of enquiries about Wallace Hopp’s Supply Chain Science, which is unfortunately no longer available as a free download (but is available in a revised edition in print). I’ll continue to let you know about any good stuff I find.
I’ve had a few comments from people from the Humanitarian/Emergency sectors about some of the posts I’ve made on those topics. I’m still working with Bernard Auton on the CILT’s Humanitarian and Emergencies Logistics Professionals (HELP) Forum, and I find the whole topic fascinating so I will continue to write about that.
I am going to make less comment than before on supply chain stories in the news (unless I feel reallystrongly!) These posts have a much shorter shelf life than others, and we supply chain professionals are far too busy and practical to be reading (or writing…) what is effectively a form of technical gossip swapping, aren’t we?
So, there’s plenty to be going on with. It’s good to be back.
While working on a European distribution strategy assignment for a client earlier this year, I did some work on how to use lower-carbon multi-modal transport and still get goods to the customer on time. So I was interested to read about Tesco’s latest innovation - bringing imported wine down Manchester Ship Canal by barge.
My own investigations found that apart from corporate social responsibility, there were good commercial motivations to use rail, canal and short-sea shipping. Increasing oil prices and carbon taxes represent a significant risk for companies locked into carbon-inefficient strategies. In addition, increasing road congestion lengthens journey times and/or attracts road pricing policies.
Posted by: Martin Arrand
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As I’ve been working from home a lot recently, I’ve had the radio on to give the office a bit of a ‘buzz’ and today I overheard this story on BBC 6 Music. Camelot have withdrawn a lottery scratchcard because customers couldn’t work out when they had won.
The customers’ confusion stems from the concept of this scratchcard, as the Manchester Evening News explains:
To qualify for a prize, users had to scratch away a window to reveal a temperature lower than the figure displayed on each card. As the game had a winter theme, the temperature was usually below freezing.
Players, apparently, had trouble comparing two negative numbers and deciding which was the higher.
Do read the MEN article, as it is very funny, if rather depressing. I wrote only last month about how poor numeracy threatens the success of Six Sigma. But failure at this level of simple arithmetical ability would make even the “keep it simple” improvement activities employed in Lean quite hard. I don’t want to get too down about this, because people can still come up with error-proofing ideas, etc without being able to work out that minus six is not less than minus eight.
But would we get better, faster results if our workforce had better basic skills? Undoubtedly.
Manchester Evening News ‘Cool Cash’ card confusion: http://www.manchestereveningnews.co.uk/news/s/1022757_cool_cash_card_confusion
Sometimes people get hung up on semantics. Sometimes it pays to be clear - very clear.
I am currently trying to wade through some waters muddied by misunderstanding and poor use of terminology. My employer has had some good quality experience of Lean (albeit in a fairly small section of its operations) for about four or five years. Now the senior management have woken up to the idea, and have decided that a full Lean programme would benefit the business - without, they admit, a very deep understanding of what they’re getting themselves in for. Let’s leave that issue on one side for now.
What I’ve been grappling with is a difficulty with the terms “Lean” and “Continuous Improvement”. Because understanding of Lean is limited, there is a view that Lean = Tools, and Lean = Manufacturing. For some, Continuous Improvement is an umbrella term that includes Lean, but not exclusively, and also includes Six Sigma and, as one colleague put it “anything else that works”.
There was a pretty depressing story in the Guardian a few days ago that proposes, in typical newspaper hyperbole, that Britain is in the grip of a numeracy crisis.
For once, the concern is justified. According to the article, there are 3 times as many UK adults with poor numeracy than poor literacy. That’s 15.1 million people with the equivalent of grade G or below at GCSE Maths (an appallingly low benchmark in any case).
What’s more, Tricia Hartley of the charity Campaign for Learning is quoted as saying:
“Many people in senior posts who are responsible for budgets, are really worried about their numeracy.”
As the article points out, there is a much greater social stigma attached to illiteracy than to innumeracy. Well-educated people are quite happy to admit that they were “never any good at maths”. I was surprised to find that senior, well-performing colleagues struggled in Six Sigma training because of their lack of mathematical competence. Those without degrees in science or engineering struggled most.
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