Organizations Need of the Day – Business Process Improvements
Today the need of the hour is for the Organizations to be competitive and embracing new methods, processes, to keep changing continually to ensure future growth and survival. It is only those Organizations that have been responsive to the need for continuous change and those that have been able to keep reviewing themselves with reference […]
The Changing Face of Business Environment
Introduction The last decade has shown rapid development in the information technology and its application. This has helped changed the way we look at the world as well as the way business is conducted. Both business and trade have gained under the wave of information technology with improvement in efficiency, productivity and bottom line. Productivity […]
The Cost of Poorly Performing Processes – Need for Six Sigma
Prior to the introduction of Six Sigma philosophy, there was a debate as to whether Six Sigma is a goal worth pursuing. Many experts in the area of quality believed that wastage was a way of life. Trying to eliminate wastage would cause more wastage. They believed that it was possible to eliminate waste but […]
ERP – General Ledger and Accounting Management
Financial accounting module of an ERP package provides company wide control and integration of financial information. This module provides the ability to centrally track financial accounting data within a framework of multiple companies, languages and currencies. The General Ledger (GL) module is the heart of finance package of an ERP system. Through integration with logistics, […]
Why are Industrial Companies Acquiring Tech Startups?
Mergers and acquisitions used to be fairly straightforward in the yesteryears. This is because companies would only make acquisitions within their own industry. This meant that if a technology-based startup were up for grabs, the list of potential suitors would only include companies like Google and Microsoft. This has completely changed now. Traditional companies like […]
FG Supply Chain consists of all activities involved in movement, storage and distribution of Finished Goods from the Delivery point of Plant to the Point of Sale.
In the case of global supply chains, supply chain management gets more complicated with the variations arising out of different countries regulations and logistical practices.
Computer Hardware supply chain is a good example for students and SCM professionals to understand the dynamics. The life cycle of computers is very short, and frequently models and technology keeps changing all the time. This factor needs to be kept in mind while drawing up the supply chain strategy for Finished Goods to ensure that obsolete inventory does not clog the pipeline and that the inventory maintained is lean.
Manufacturing practices have changed drastically over the last decades. With the help of ERP systems, manufacturing has JIT system of manufacturing.
Computer manufacturers have established the strategy of setting up assembly plants in various countries to service global markets. Computer manufacturing is built on two models. While certain fast moving desk tops are built on BTS - Build to Stock model, most of the laptops and other products are manufactured on Build to Order Model, wherein manufacturing of a batch quantity is taken upon confirmation of orders from the customers.
HP has multiple business divisions managing different product lines. While one division manages PSG Group - Printer and Consumables section of the product, two other divisions separately manage laptops, desktops and servers. Manufacturing of all the products is spread across various countries for each of these products. Common Supply Chain Division and Logistics services departments manage the functions of all business divisions.
Managing multiple product lines under common logistics network provides challenges in ensuring process compliance. To add to the complexity, a set of DeskTop or Laptop includes the main module assembled at HP Plant and other items like monitors, keyboard, mouse, etc which are bought out from third party vendors.
Third party vendor items are supplied to the designated FG warehouses that are managed by 3 part Logistics Providers and held as HP inventory. Finished goods are received similarly from HP Plants across countries.
Normal Supply Network consists of 3PL Owned Country Depot in each country and further regional distribution centers and stocking points which ship out goods to distributors who maintain their logistical network to reach to the customer point of delivery.
On receipt of all items at the warehouse, process is designed to kit or bundle all the items together, re-label the cartons at the distribution center and move out as one item.
Such an activity involves managing inventory processes where the items are received as individual items with SKU description and after the kitting or bundling is done, all SKUs get converted into a separate SKU as the final product. The inventory management and transaction of conversion needs to be managed both at the warehouse level in the warehouse management system and simultaneously in HP Systems.
In few cases the bought out items are kept in stock at the warehouse as vendor managed inventory belonging to the vendor and only at the time of kitting, the transfer of ownership happens using a sale. In such cases, the 3rd Party Logistics provider maintains HP inventory and Vendor inventories in the same system and managed operations accordingly.
In FG Distribution, ensuring FIFO is essential for all items and capturing serial numbers at the point of dispatch from distribution center to ensure updating in warranty tracking database.
A culture of drilling down processes, active participation and interaction with 3PL service provider with frequent audits and training goes a long way in ensuring that service levels are met by the 3PL service provider which reflects on the SCM division’s performance too.
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