The Goal: A Process of Ongoing Improvement is a book about commercial success. The integration of the global economy and the change of consumption trends make the enterprises face more and more competitive pressure. The practice of reducing costs by increasing labor productivity and conserving material consumption has shifted from production to non-production areas, particularly logistics management.
The concept of logistics as the third source of profit has been gradually accepted and proved, the modern logistics industry in China is more and more industry attention. The logistics industry to provide intangible logistics services to obtain profits, which determines the level of service competition, will become the focus of logistics market competition. Good customer service helps maintain and enhance customer loyalty and satisfaction. Customer service is more important to customers than price, quality, and other factors.
With the change of modern production mode and the intensification of business competition, the level and quality of logistics service provided by enterprises to customers has become a key factor in their pursuit of profits. Therefore, how to scientifically analyze and evaluate the customer service performance of enterprise logistics has attracted more and more scholars and enterprise executives.
A typical imbalance that must be eliminated is the imbalance between workloads found through models or job rotation. Through effective line balancing, companies hope to reasonably match the labor load among team members to achieve a balance between cycle time and actual working hours. One member’s cycle time must be the same or close to the cycle time of the other members.
In other words, all cycle times must be the same. If each position on a team requires different hours, all team members must wait for the longest positions to complete their work. In this case, the cycle time imbalance will lead to waiting waste.
Breakthrough projects should be managed according to the project management approach in an effective and efficient manner. Change completed the new project plan, which should lay the foundation for continuous management of the process. Also, people within the organization are the best source of information to provide incremental continuous improvement.
In addition, it usually participates in working groups. The group weaving should be geared to gradual and continuous process improvement activities to control. To understand their effects, participate in the changing personnel in the organization shall be granted the corresponding authority. Besides, it should receive the technical support related to the improvement resources needed.
Supply chain process waste should be the concerns of the global manufacturing enterprise cost control work, the main consists of seven types of waste, including unnecessary inventory and service of the defect, the product defects, the production of any defect, procurement, transportation, power waste and unnecessary movement, the seven waste process caused the high operating costs.
Firstly, the unnecessary inventory mainly includes the dull inventory, excessive production of inventory, ahead of the arrival of the goods inventory, production line of excess inventory, redundant safety stock, invalid inventory loss caused by the cost. Secondly, service defects mainly include order loss cost and order retention cost caused by loss of sales, as well as penalty cost caused by the failure of service level to meet the requirements.
Thirdly, product defects mainly include finished product wastes, product maintenance costs, penalty costs caused by product defects, and reverse logistics costs. Fourthly, production defects mainly include non-effective consumption of materials and production line waste products.
Fifthly, poor quality supplies, late arrival supplies, the cost caused by ineffective consumption in the procurement process. Sixthly, waste of transport capacity mainly includes duplicate transport routes, non-economic transport scale, transport waiting, and costs caused by transport accidents. Seventhly, unnecessary movement mainly includes unnecessary materials on the production line, repeated selection in production handling, storage work, picking the route of goods, and heavy labor caused by reverse retrieval of materials.
After identifying the source of cost, the enterprise can start to work on the cost structure. Also, the so-called cost structure requires the enterprise to clearly define the membership relation between total cost and sub-cost and the relation between sub-costs based on the process. In addition, the main purpose of this is to avoid cost duplication, to identify key points of cost control in the process, and to identify the “here and there” relationship between costs.
However, it is worth noting that due to the obvious contradiction between cost and service level, enterprises need to consider working on the premise of ensuring a certain level of service while identifying waste and controlling cost, otherwise the cost control will not be worth the effort.
The two books between The Goal and Lean Supply Chain and Logistics Management are relative closely. In fact, logistics performance evaluation is a complicated system engineering, and it is impossible to have a logistics performance evaluation index system applicable to all enterprises. Therefore, some scholars