By Arnel Gamboa
About the Author
Arnel is the president of Supply Chain Management Association of the Philippines (SCMAP). He has been the editor-in-chief of the official newsletter of SCMAP, the Supply Chain Philippines, for the past 2 years. He is a seasoned practitioner and resource speaker in supply chain with focus areas in cold chain, FMCG distribution, retail-supply networking, demand planning and supply chain ICT. He is the head for supply chain at Benby Enterprises, Inc., the leading distribution company for imported world-renown food, personal and home care products. – Ed Sanchez, Executive Director
In today’s practice of supply chain, particularly in warehousing and distribution, it is common knowledge that if one is to search for a potential client or principal, you need to offer the best-in-class practices available. The preferred partner is no longer chosen by the name or brand it carries but the best value it can offer for every centavo or cent spent by the client.
Thus best-in-class philosophies and doctrines have been established over the years by industry leaders and innovators to bring processes to the next level evolution. Some of the more popular ones are known as Kanban, Lean, Six Sigma, Kaizen, Total Quality Management, and Quality Circle.
In this article, we will be sharing the basics — the Triple 5’s.
5 S is a system for work processes started by Toyota in Japan several decades ago to institutionalize performance setting and performance per individual employee. The concept has been successful in maintaining good warehousing practices and cleanliness for most of the leading Japanese companies in our time.
- SEIRI (Sort) Take out unnecessary items and dispose. Only what is needed in work remains.
- SEITON (Systematize) – Arrange necessary items in good order. Prioritize important and urgent tasks.
- SEIKETSU (Standardize) – Maintain high standards of housekeeping or performance. Eyes of the prize. Every person and activity needs to have a target.
- SEISO (Sweep) – Clean your workplace. It is always easier to work in a clean and organized environment vis-à-vis a cluttered and dirty one.
- SHITSUKE (Self discipline) – Make 5 S a way of life. Though 5 S starts as a company directive, the over-all objective is to ingrain this mindset to all employees and enlist commitment from each to participate and persevere.
5 M, on the other hand, is a traditional industrial engineering concept that sets key results areas (KRAs) in the work place. Normally, the 5 M covers the major elements of root cause or fish bone analysis. Proven to be effective in managing or supervising a fast-paced environment such as manufacturing and a distribution center – normally submitted in the form of a report or scorecard.
- MAN – covers any aspect of personnel activity such as attendance, productivity, work assignment, shift schedule, among others.
- MACHINE – includes all machines or equipment inside the workplace. In most cases, this covers a roll call or accounting of assets, damages or repair requests, additional equipment, etc.
- MATERIALS – any inventory asset in the factory, warehouse or vehicle. Normally registered as stock keeping units (SKU) in the work place. Report normally covers Hi-Lo report, Near-to-expire, Critical / OOS items, Promo Allocation, among others.
- METHOD – refers to processes in the work place that will or have taken place and adds detail on the activity, i.e. Inbound of 3×45 TEUs Textile from China, Bundling of SKU A with Free Goods X for 100 units, Cross-dock for 2x10wheeler for Customer Y, etc.
- MEASURES –relates to metrics or key performance indicators (KPIs) defined for the supervisor or manager for the shift or area. Set targets with given gap analysis on the performance.
5 P stands for Proper Planning Prevents Poor Performance. Before we expect a great execution, we need to come up with a good plan. A plan provides the roadmap of how we get to our destination.
Supply chain is a complex landscape which needs a fair amount of planning to help put order in the processes and influence the future of these chain of events.
Sales & Operations Planning (S&OP) is a tool used by most large companies today to plan their operations from procurement to deliveries to trade. S&OP has become an indispensible tool for the modern demand planning managers that enables them to bridge supply and demand.
S&OP also helps the company optimize customer service level (CSL) and promotes other efficiencies such as order lead time reduction, inventory cover reduction, warehouse space optimization among others.
While supply chain or demand planning managers are expected to lead S&OP’s, the members also include Sales, Marketing and Finance.
There are other planning tools in supply chain though that may be useful to various companies in different industries and varying complexities in their supply chain set-up, to wit:
- Supply Chain Capacity Planning – normally used in medium-term and long-term horizons. Applied in machine, plant, warehouse and fleet capacity building normally lifted from the strategic plan of the company.
- Material Replenishment Planning (MRP) – refers to a demand planning tool used to periodically replenish stock cover of materials for a specific site, section, department or warehouse. Normally beneficial to a hub-and-spoke warehouse network or a manufacturing / production environment.
- Production Planning and Inventory Control (PPIC) – covers the monitoring and replenishment of raw materials and / or packaging materials necessary to build the components of finished goods. Generally used in plant or factory logistics and resembles the Kanban system except that it keeps inventory on site.
If implemented religiously and consistently, the Triple 5 System is guaranteed to level up the performance of a supply chain team. The only ingredients to make the Triple 5 System really work and ensure success will come not from technology… but from you – discipline and commitment.
For more information please go the SCMAP website www.scmap.org.