I interviewed Robinson Balestero who discussed Logistics Engineering and Some of the Benefits.
It’s good to speak with you again, Robinson. It’s been a long time since we did our last interview. Today I’m looking forward to hearing the discussion you want to have about logistics engineering and some of the benefits. Can you first provide a brief background of yourself?
Yes, I’m a supply chain manager for important, the group of equipment manufacturer, which is a European-based company. My previous experience was in construction machine manufacturing, which has some similar activities because of being a complex manufacturing industry. Before that I was working in a group of companies focused on education material, a group of companies on the franchise model, and I think our previous conversation was when I was in that position.
Can you explain more about your views on logistics engineering and how it can be used?
Sure. For any industry, especially the manufacturing industry, I think to focus on turning the logistics into a high-level logistics activity, logistics engineering or an intelligence logistics area would be very interesting to be established. I have recently had this experience, and I would recommend it for any supply chain manager, or director who’s working in a complex industry. For example, one of the things that we have been performing is process mapping and review. If you have a process in any activity and any department in a company that has several internal process, sometimes other processes are connected with other areas, and if you don’t make sure these processes are really competitive, they are quick enough, they are at the proper level, you probably will lose money, and at the end your results will not be good.
In my case, implementing some lean tools in this logistics engineering area has had very good results. For example, running a VSM, value stream mapping, on a process to make sure that each operation under processes duly to the nature of the operation, everything has been really improved. And then very fine which operation has added better for the process results. Those who have no added value or maybe they are just being turning the process too much complex. With identifying this type of activities in each process, it will really help you to get rid of the things that are not helping to, making your process productive and efficient. This is one of the things we’ve been performing in this logistics engineering area. I also tell you about interfacing with the engineering area, process and product engineering. Integration is key in any organization. You should have a competent department, but he’s isolated with his fashions, his activity.
Of course, he will probably upgrade maybe even in a good level but, autonomously, without the proper integration, the company will lose. The company will be, at the end, probably a little divided and not united. A union is key for any organization to survive in this very complex, competitive world that we live in today. In any manufacturing company, this will be also necessary to have this integration between the process of logistics engineering and the other engineerings in the company so they can talk the same language and they can be on the same page. One of the technical and important features of this activity, logistics engineering, is packing specification. If you don’t let your supplier know exactly how he has to pack their materials, the materials purchased for your procession, for your transformation, for your manufacturing, of course you do in the original, his original design, which may not necessarily meet your needs.
But if you specify exactly what is the material he has to pack your product with or how he has to pack your material, the product he’s shipping to you, then, of course, he’ll be in the best position to service you and to deliver the material in a way you really need it. An external will enable you to handle it the most efficient way. For example, when it comes to transporting or to storing or to handling, unpacking, filling the production line, all this will be much more efficient, will be much more productive if your packaging was really in the way you need.
Of course, you have to contractualize once you have examined and once you have reached the conclusion of which type of packaging material and how each product must be packaged, you have to contractualize this with your supplier; otherwise, you run a risk of his not meeting your needs the way explained to him. It’s especially important for materials of A- and B-class because they are much more, most cases, much more important in terms of value for your inventory, so you will have to manage them with a focus and to prioritize this type of material in many cases because of their financial value, the inventory that they carry there.
Also, just to give an example how packaging specifications are important, for sensitive material, we will have a standard shipping by sea, for example. You may need special protection; sometimes you may need anti-rust application, anti-rust material, special packaging or bubble plastic, as I have a recent case that we had that case, especially when you’re sea-freighting material in long distance. For example, I’m in Brazil today but shipping from Brazil to China, for example, from China to Brazil, which are long distances, if you don’t have the proper packaging, you may have little damages to the material, and this will cost for us. Until you have a replacement, you have trouble to manage. Maybe you have to go to a freight which will cost much more. This is just an example to illustrate how packaging specification’s very important.
Logistics specification should be very close to packaging specification as well. There’s a little difference. Of course, you have to externalize your supplier, to explain to him not only supplier but service providers, as well, like transport companies, customs brokers, and things like that; they have to know exactly what is the type of handling or what really requires special attention in terms of moving your material from one place to another or storing, if you have storage places outside your company.
If you don’t really specify these kinds of details to him or to these companies that provide you transportation, storage, and things like that, you will probably not get the best service at all. In terms of handling material, it requires a lot of operations. For example, loading materials, transporting and loading, shipping, if you don’t really specify to each of these players which is the type of logistics operations required for them and which format and with what material or equipment, you probably will not get the best service. Inside the manufacturing plant, logistics engineering is also important relating to feeding the production line.
If you’re talking about a complex manufacturing plant or product being produced, you’ll see the need for assembling some racks so they can carry the material, each part of each material or each product to the specific workstation in the production line. Not only that, so that there’s no missing material, no missing parts, there is no part in excess or material in excess as well, but also to respect ergonomy of your operators. If the assembly technician is working there and he asks you to bolt down, every time he asks you to take a part almost in the ground, so this could damage his health to a certain extent. This logistics engineering will be important in this way as well.
Also, when you’re talking about C-class material, material that you may have a lot of part numbers for but they don’t cost as much as A and B materials. Even so, some people ignore it a little bit. A screw, for example, which will be, in many cases, a C-class, it’s not too important, I think, to purchase or to manage or to handle, but if you’re talking about millions of screws, it’s different. It’s a C-class but it’s important, not in terms of annual budget for that item to be purchased and to be managed but also in terms of fitting a line. You can just imagine how catastrophic it would be for a production line to stop or shut down because it’s missing a screw.
When it comes to line fitting, this management of C-class is very important, and there is a very common process for doing that, which is a rack with a lot of bins. In each position there are two bins; they are two different colors, of course. In one of them the supplier or, if it’s an internalized process, the line fitters, they will place the C-class item in the first bin and the second one as well. When you have run out of materials in the first bin, the second one will come up, and this first one will go back. Then you’ll see it, because they’re two different colors, you’ll see visually from a distance how many items are to be replenished. If you have, for example, a rack with a hundred bins and you can see that there are a few, just five or ten bins that must be replaced, or if you have ninety of those bins to be replaced.
Logistics can provide support for production. Also flow, logistics flow, you have to also define which art of flow you’re going to work with. For example, pull flow, push flow, just in time, or another type of flow. For example, the supplier has to deliver by searching the material product directly to the production line, which is a kind of flow. You have to specify all these flows, and, of course, you have to identify which category of material, which commodity will be in each type of this flow, logistics flow, so that you can provide the best customer production line. Also, I’ll say that other tools and concepts are very important to make the supply chain and also logistics itself more efficient if possible. Applying best practices and the idea of continuous improvement is, I would say, you’d be in the core of this logistics engineering function.
Going ahead, results would be, as I told you before, productivity if you shall see the service level will, for sure, be in better shape if you apply these concepts. And, of course, because day-to-day monitoring and managing all these items that compose this activity of logistics engineering would help to grow up with this. of course, and I was just talking about the lean concepts.
You have so many tools, so many things you could use to improve your processes. For example, 5S, fishbone, 5Ys, and others, many of these quality tools as well. You can use all this; it depends, of course, on the application, but you can discern which one will be useful for a certain activity. Summarizing, I would say that logistics engineering for a complex manufacturing company would be very, very important to really increase efficiency and service level while decreasing cost.
About Robinson Balestero
Supply Chain Manager