Your internal and external aspects of logistics are co-ordinated
It is important to identify a single manager responsible for co-ordinating the supply chain and internal manufacturing operations, treating them as a single business process. Traditional departmental structures tend to split responsibilities between purchasing and manufacturing operations, leading to dual accountability for delivering the factory output
Key Issues
·         Responsibility for managing the supply of components and the manufacture of internal parts, to deliver quality parts on time to customers at agreed production costs, should be under the control of one person.
·         This person should also own production schedules.  These must be compiled at a minimum of two levels:
o      the production schedule, that provides time for the supply of materials/components and
o      the production plan, which is a statement of what will be made in the next production period.
·         Managing the production schedule is a complex task as you have to consider original equipment, spares, arrears, supplier capacity, internal capacity and in some instances a third party logistics provider.  The person responsible for controlling the production schedules must, therefore, be intelligent and knowledgeable about products and part numbers
·         The master production and production schedules must take due account of the available capacity and ways of flexing it now and in the future
·         The magnitude of potential schedule changes should be agreed in advance with production management and suppliers
·         Information on production schedules and the latest parametric drawings must be readily available to all suppliers, preferably on-line
·         The role of purchasing has two elements;
o      a professional role that locates appropriate suppliers for key components and negotiates the terms and conditions of the supplier contract. This is normally performed as part of the new product introduction process. 
o      the procurement of items, ensuring they are delivered on time, using the agreed contractual terms.
·         The procurement tasks should be the responsibility of the operations team who provide suppliers with details of quantities and delivery dates, then feedback on their performance achievements for quality, cost, and delivery
Factors for Success      
Factors to  Avoid
1.     One senior person is responsible
2.     All information is accurate and readily available to interested parties
3.     Information on your computer systems has adequate security protection
4.     Open communication is encouraged within the company
5.     A culture of mutual help prevails.
1.     Splitting the tasks between several people with the M.D. being actively in charge
2.     Allowing significant changes to the production plan without justification
3.     Production schedules not based on customer requirements
4.     Using inaccurate information
Who does this apply to?
Senior management and those responsible for logistics, operations, supplies and manufacturing products
Realisable Benefits
Improved flow of materials, better quality with increased customer satisfaction


Logistics co-ordinationLogistics co-ordination

Logistics co-ordination

Uninterrupted material flowUninterrupted material flow

Uninterrupted material flow

Responding to changes in volumes and product mixResponding to changes in volumes and product mix

Responding to changes in volumes and product mix

Make versus buyMake versus buy

Make versus buy

The supplier approval processThe supplier approval process

The supplier approval process

Monitoring supplier performanceMonitoring supplier performance

Monitoring supplier performance

Sharing information with suppliersSharing information with suppliers

Sharing information with suppliers

Managing inventory throughout the supply chainManaging inventory throughout the supply chain

Managing inventory throughout the supply chain

Improving the delivery performance of suppliersImproving the delivery performance of suppliers

Improving the delivery performance of suppliers

Material flow and the factoryMaterial flow and the factory

Material flow and the factory

Production scheduling processProduction scheduling process

Production scheduling process

Calculating production capacityCalculating production capacity

Calculating production capacity

Visual managementVisual management

Visual management

Health and safetyHealth and safety

Health and safety





Ensuring equipment is availableEnsuring equipment is available

Ensuring equipment is available





Consistent manufacturingConsistent manufacturing

Consistent manufacturing