Manufacturing Effectiveness 3: Internal Logistics
Quoting directly: a reliable benchmark on which to base an analysis of any manufacturing organisation is that of the internal logistics feeding the production operation – how material planning is carried out, how the purchasing system operates, how regular componentry is re-supplied on the shop-floor, what shortage reports are available to production staffs, who actually collects and delivers material to the positions where they will be used e.t.c. In addition the logistics within the production operation need to be examined, from raw material stores to the production lines and onto the warehouse: are batches/units moved on a ‘pull’ or a ‘push’ basis, do large batches build up at bottlenecks, does material awaiting the next operation litter the floor until identified e.t.c.?
The idiosyncrasies of any manufacturing sector or business will result in their own particular set of problems; however, production logistics is one of those areas that cause problems in all industrial sectors. Whilst internal logistics is only one of the factors affecting overall company effectiveness what is of concern here is the functioning of the Manufacturing Mechanism, and the critical factors in this case are logistics in a tightly defined sense of inbound and direct production logistics.
In fact I would go further than I did 17 years ago and say that the internal logistics of an OEM are the critical factor in its running. Inter-group logistics and wider distribution logistics can be rectified as a discrete problem. The internal logistics of a company is/are vastly more complex and is one of the areas where real gains are to be made.