On Demand News: 06/28/18

The Deep Dish On Supply Chain Efficiency

28 June, 2018 // In a story this week about how pizza companies are researching autonomous delivery vehicles, Artie Starrs, president of Pizza Hut U.S., made an interesting supply chain observation:

“What we’re trying to do at Pizza Hut is get the ovens closer to the front door,” he said. Starrs was referring to the possibility that robotic vehicles may someday be able to assemble and cook pies while en route to the customer. But he makes a larger point about optimization. Manufacturing and distribution is generally improved when there’s less time and fewer processes between maker and consumer. 

Taiichi Ohno, the father of the famous Toyota Production System for efficiency had this in mind when he identified the seven types of “muda,” a Japanese word that translates as wastefulness or futility. In Ohno’s ideal system, when goods sit in warehouses, travel unnecessarily are over-produced or over-processed or have to wait at all, that’s muda—and that’s an opportunity for optimization.

That’s the same idea we had in mind when we introduced Inventory On Demand. In outsourced, multi-party supply chains, muda is endemic. All that non-value-adding time adds up to extra days of inventory. And that ties up a lot of capital.

With Inventory On Demand, we buy goods on behalf of our clients—right at the factory dock, in many cases—and transfer it to our clients right before they sell it to their own consumers. Because Morgan is a supply chain optimization company, we know where to look for wasted time and processes. And, because it’s our inventory, we’re highly motivated to make muda disappear.

We have long described the value of Inventory On Demand as being “like moving your factory next door to every customer.” Instead of paying for and managing supply chains, our clients buy the promise of availability. At any time, they’re able to buy goods where they want and immediately sell them to hungry customers, easy as (pizza) pie.

Inventory On Demand is just one of Morgan’s optimization strategies. To learn more, you can download our white paper on the subject below, listen to our OnDemand webinar or read a case study. Then, let us know how we can serve up some hot and fresh solutions for your own supply chain challenges.