Tag Archive - Masters of Supply Chain Management

Masters of Supply Chain Management – Peter Durand

Like all of the best inventions, Peter Durand managed to create a device which not only helped to assist with shipment, but which was also of benefit to humanity as a whole. Durand’s creation? The humble tin can.

Masters of Supply Chain Management - Peter Durand and his invention tin can
Source: Wikipedia

Little is known of Durand’s early life, but by 1810 he had become a successful merchant, working from Hoxton Square near London. As a food trader, Durand knew only too well that his goods had a limited life span and would perish quickly. Using a technique he learned from the French inventor Phillipe de Girard, Peter Durand approached the then king, George III and was granted a patent for preserving food using sealable containers. Most importantly the patent covered the use of tin cans for preserving food.

Durand successfully tested his new method of preservation using tin cans by deploying a number of items for use by the Royal Navy. Six months after the food was shipped, scientists from the Royal Society opened the tins and found that the food was perfectly safe to eat.

The Royal Navy found that preserved food was only one of the benefits of the new tin cans. Firstly, tin cans were robust and easy to store; previously food had had to be stored in large wooden barrels which were bulky and space inefficient. Secondly, food which could be stored for at least six months meant that voyages could be extended, reducing the need to make landfall to secure supplies.

Despite the success of the tin can, Peter Durand chose not to take the invention any further himself and sold the patent just two years after it was granted. The new owners of the patent turned the idea into a commercial success and the storage of food was changed for ever.

Durand’s story did not end there though. In 1818 Peter Durand managed to secure the US patent for his tinned food invention and so began the globalisation of the humble tin can.

 


Posted on February 21, 2012 in Supply Chain, Supply Chain Management by
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Masters of Supply Chain Management – Léon Theremin

One of the most talked about technologies, Radio Frequency Identification (RFID), uses tiny passive electronic tags to track goods through the supply chain. Although RFID has found many uses in the modern age, the concept was originally designed by Russian inventor Léon Theremin as an espionage device.

Leon Theremin

Source: Wikipedia

Born in 1896, Theremin was a prolific inventor whose devices ranged from electronic musical instruments, such as the Theremin which bears his name, to the concept of interlacing which is still used today for improving the quality of broadcast video signals. From the age of 7 Theremin had developed a fascination with electricity and by 13 was demonstrating advanced optical effects using high frequency circuitry to his peers.

However it is Theremin’s passive listening device nicknamed “The Thing” which will probably prove to be his legacy. Designed as a tiny “bug” for use against American diplomats based in Moscow, “The Thing” relied on electromagnetic energy from an external source in order to transmit audio; the genius behind the idea was that the energy required was not obtained from a battery, but by a remote radio beam at the correct frequency. When activated, The Thing would then retransmit audio back to the sender who could eavesdrop on conversation taking place near to the covert listening device.

“The Thing” was a great success, allowing the Soviets to spy on their American counterparts undetected for seven years due to almost undetectable nature of the passive circuit. In fact the device installed in the Moscow embassy was discovered accidentally when a British radio operator overheard the broadcast from the device.

Despite his work for the Soviet cause, Theremin was interned in a gulag prison camp for several years before joining the KGB where he worked until 1966. He would later work at the Moscow Conservatory of Music where he developed the electronic instrument which still bears his name today. Theremin died in Moscow in 1993 at the age of 97 after a long and varied career.

The passive circuitry used by Theremin went on to form the basis for other similar devices which could be activated and powered remotely by radio waves and formed the inspiration for modern RFID and Near Field Communication (NFC) tags. The future of contactless payments, electronic inventory control and touch travel passes, such as the London Underground Oyster card are all direct descendants of “The Thing”.


Posted on February 7, 2012 in Supply Chain, Supply Chain Management by
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What is the ‘Bullwhip Effect’?

First coined by J Forrester in his seminal paper Industrial Dynamics back in 1961, the phrase ‘bullwhip effect’ is used to describe the knock on effects of a single product and its demand on the wider supply chain. Forrester found that in forecast-driven distribution channels, a change in demand had an ever increasing effect the further back into  the supply chain he went. When graphed, these oscillating changes in demand appear as a series of waves which get greater in size, reminiscent in appearance of a cracking whip. Because Forrester is credited with documenting the bullwhip phenomenon, it is also known as the Forrester effect by some.

Bullwhip Effect and the Supply Chain

Source: Wikipedia

The effect is created by statistical demand by suppliers attempting to forecast customer demand to properly position stock and raw materials at the correct points for timely delivery. Forecasting provides some degree of statistical accuracy, but the vendor must carry an inventory buffer to cover unforeseen fluctuations. Moving further up the supply chain, manufacturers and suppliers of raw materials must also maintain an inventory buffer to satisfy the demands of their own customers; because these demands can shift to even greater degrees, the “safety stock” levels must also be greater. Should downstream demand fall, the supplier is left carrying inventory which they are unable to shift, creating the “bullwhip effect”.

Forrester also observed that the bullwhip effect can be caused by a number of factors relating to human error or operational problems. Misapplication of statistical forecasting techniques or internal and external communication issues all play a part in oversized inventory buffers. So too do perceptions regarding supplier’s ability to meet demand and fulfil orders for a variety of reasons.

The bullwhip effect has an effect on an organisation’s bottom line, through inefficient production or stock short falls. The obvious knock-on effect is a reduction in customer service and satisfaction levels which has a definite negative, and therefore costly, impact on a brand’s reputation.

 


Posted on February 3, 2012 in Supply Chain, Supply Chain Management, Supply Chain Upstream and Downstream by
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Masters of Supply Chain Management – Jay Wright Forrester

Although many people are claimed to be the ‘Father of Supply Chain Management’, Jay Wright Forrester’s research into Systems Dynamics lends weight to the argument for his claim to the moniker.

Forrester grew up on his family cattle ranch in Nebraska where he first demonstrated a gifting for electrical engineering when he developed a wind-driven system to provide the ranch with its first-ever electrical feed. Realising that he preferred engineering to raising cattle, Forester went on to study electrical engineering at the local university.

Masters of Supply Chain Management – Jay Wright Forrester

Forrester went on to further study at the Massachusetts Institute of Technology under the tutelage of Gordon Brown (no, not that one!) where he was put to work developing various devices for military deployment during World War II. Forrester continued work with the military developing a number of computerised systems after the end of the War, but eventually left engineering in favour of management.

Whilst lecturing at the MIT School of Management, Forrester began research into the interactions between objects in dynamics systems, leading to the modern concept of supply chain management. The work undertaken by Forrester and his team in the late 1950s have formed the foundations for all major supply chain management systems.

Systems Dynamics seeks to analyse and understand the behaviour of a complex system, particularly each of the internal processes which have the potential to affect the entire system. Systems Dynamics concentrate on trying to explain how simple systems are able to behave in previously unpredicted ways, using feedback loops and stocks and flows.

Put into the context of a business, Systems Dynamics help to explain how the delayed availability of a small component can cause major problems further down the construction process. By seeking to understand such effects, Systems Dynamics help to prevent these same problems.

Systems Dynamics are directly related to Supply Chain Management, and Forrester led the field in understanding them. Forrester’s claim to paternity is therefore substantial.


Posted on February 2, 2012 in Supply Chain, Supply Chain Management by
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Masters of Supply Chain Management – Norman Joseph Woodland

Woodland’s journey to Master of Supply Chain Management status initially started as something of an accident. Thanks to a conversation overheard by his friend Bernard Silver, Woodland began a personal quest to create a system which automatically read product information at the checkout in a store. The overall goal was to reduce processing time, reduce operator error and thereby reduce processing costs. The solution developed by Woodland? The barcode.

Norman Joseph WoodlandUsing Morse code as his inspiration, Woodland recognised that using simple dots and dashes information could be encoded simply and sent electronically. Legend has it that during a visit to the beach, Woodland drew a series of dots and dashes in the sand, which he then dragged to form lines; dots produced thin vertical lines whilst dashes were much thicker. The two-dimensional barcode was created as a direct variant of Morse code.

Woodland and his business partner Bernard Silver adapted an existing system used for optical soundtracks in movies to provide the automated aspect of the new coding system. An ultra bright light bulb was shone through the printed barcode onto a movie projectors photomultiplier (a clever piece of technology which accurately detects light levels and variants therein). After proving the concept worked, Woodland and Silver were granted a patent for their “Classifying Apparatus and Method” in 1952. Unlike modern barcodes, the patent used “bulls eye” circular codes which were easier to scan and decode from any angle.

The barcode concept developed by Woodland was pushed around by various technology companies for the next twenty years with in-store tests only beginning in earnest in 1972. Almost immediately a problem with Woodland and Silver’s original concept was discovered, because the codes produced were frequently corrupted whilst being printed, rendering them unreadable. Fortunately Woodland had secured a position at IBM and had developed an alternative system which was less prone to the printing problem, based on the straight line systems we know today. The new system was released in 1973.

BarcodeJust one year later, in a supermarket in Ohio, USA, the first ever commercial transaction using Woodland’s new barcoding system took place. So momentous was the occasion that the receipt generated by the transaction is still on display today at the Smithsonian Institute.

As more stores across the US began to implement barcode scanners at the checkout, researchers noted several findings. Firstly within 5 weeks of the scanners being installed, sales permanently increased by 10-12%. It was also found that operation costs were reduced by between 1% and 2% thanks to new efficiencies at the till. The finding which sealed the place of the barcode in history however was the discovery that the system generated a 41.5% return on investment. And in addition to the financial savings, businesses were also able to use the scan data for improved customer relationship management.

Barcodes are now present on virtually every item in every store in every country. Woodland’s conversion of Morse code into a machine readable format changed supply chain management and the wider world forever.

 

 


Posted on November 25, 2011 in Supply Chain, Supply Chain Management by
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Masters of Supply Chain Management – Edward A Guilbert

Many of the large players in the EDI world would have us believe that the concept of joined-up supply chain management is a product of the 21st Century. Or maybe the late 1990s if they were feeling generous. Few however realise that the foundations for electronic data interchange were actually laid during a European crisis in 1948.

At the end of World War II, Russian forces blockaded parts of Berlin, preventing Allied access to the areas of Berlin for which each nation was responsible. US, French and British forces were immediately unable to get into the parts of the city they controlled.

The Berlin Airlift was implemented as a way to deliver food and other important supplies to Allied forces and local people through the only way possible – air cargo. For 13 months, an almost constant stream of aircraft landed, dropped off cargo, and departed again, eventually delivering more than 2 million tonnes of food.

Space on the tarmac at the Berlin airport was at a premium. Consequently flights arrived and were turned around for departure again in minutes. And with no onsite storage, cargo had to be collected by the receivers as soon as the plane touched the ground.

Edward A. Guilbert's manifests marked the start of EDI standardsBecause every aspect of The Berlin Airlift had to be performed at the fastest possible speed, logistics officers, led by US Army Master Sergeant Edward A Guilbert, had to develop a way of tracking all of the cargo arriving in the city. Upon commencement of the Airlift, it rapidly became apparent that the different manifest forms accompanying each delivery were totally different, some even in other languages. Clearly something had to be done to standardise the process.

Guilbert and his team managed to develop a standard manifest system which they could easily transmit via telex, radio-teletype or telephone and which allowed them to track the contents of several thousand tonnes of cargo every day. Cargo manifests were transmitted from the despatch point to Berlin as soon as the plane was en route, advising Guilbert and his team of the work required when the cargo arrived.

Through standardisation, Guilbert’s team were able to implement an orderly logistics and distribution system thanks to the time savings made. It may not have been as instantaneous as internet-connected systems, but Guilbert’s manifests marked the start of EDI standards.


Posted on November 2, 2011 in EDI, Supply Chain, Supply Chain Management by
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Masters of Supply Chain Management – Keith Tantlinger

Since mankind first learned the principles of commerce, the transport and sale of goods has been a necessity. Camel trains, ships, trucks and trains have all played their part, but it is actually the humble cargo container which has had the greatest impact on modern commerce. So today we salute the passing of one of the first Masters of Supply Chain Management, Keith Tantlinger. Keith W. Tantlinger in 1958

Back in 1955 the trucking magnate Malcolm McLean was looking at ways to reduce his costs and thereby make his haulage service cheaper and attractive to customers. As part of his grand scheme, McLean bought the Waterman Steamship Corporation with a view to creating a drive-on drive-off system which would allow him to ship trucks to cities up and down the East Coast. McLean calculated that the time and fuel economies of such an operation would save his customers nearly 75% on their current haulage costs. However, McLean realised that the trucks themselves would waste valuable space, reducing the amount of cargo shippable at any one time.

Realising he could not find the solution he wanted himself, McLean turned the problem over to Keith Tantlinger, then vice president of engineering at Brown Industries, the company which supplied McLean with trucks. Taking existing shipping crates as inspiration, Tantlinger set to work creating a reusable variant which would protect customer goods in transit and which could be stacked in the ship’s hold, one on top of the other.

The result of Tantlinger’s experiments is the shipping containers we see in their hundreds of thousands criss-crossing the globe today. Tantlinger created a number of safety devices and innovations, such as the eyelets and twist-locks which join containers together and keep them in place when loaded onto a ship. Tantlinger also redesigned the cranes which load and unload ships so that they could use the same eyelet system, standardising fittings and reducing the load-unload times in dock.

Shipping containersThese new shipping containers also allowed for accurate shipping cost calculations, cargo load balancing, and better protection of customer goods from general pilfering by dock handlers. However, the major coup of Tantlinger’s containers was the massive reduction in shipping costs that all of these innovations allowed. Shipping of goods is now a tiny part of the overall production cost, and it is almost the same price to transport goods from anywhere in the World to anywhere else.  No longer are shipping costs calculated in terms of geographical distances between points (as was the case in McLean’s original haulage model). Instead they are now calculated on weight. As a result, it costs roughly the same to ship 1 tonne of goods between Holland and Harwich as it does to ship from Beijing to Birmingham.

Such was the success of Tantlinger’s revolutionary stackable shipping containers that they eventually became an ISO standard, cementing his place in the Supply Chain Management Pantheon of Masters. The modern shipping container paved the way for truly globalised commerce and for that we have Keith Tantlinger to thank.


Posted on October 17, 2011 in Supply Chain, Supply Chain Integration by
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