Sorting Empty Boxes and Dunnage

The temptation is great on the production shop floor to throw all empty boxes and dunnage together at random and count on the consolidation center to sort it out. After all, consolidation center labor is cheaper than assembly plant labor, so why not do it The reason it is a bad idea is that it is not a transfer of work to the consolidation center but rather the creation of work that otherwise would not need to be done. The empties on the shop floor are found where the parts have been consumed. They come out automatically organized by item, operation, and product line. By scrambling the boxes, production is actually destroying a structure it 

For a consolidation center to achieve the goal of insulating the plant from remote or uncooperative suppliers, it should buy the parts and resell them to the plant. There are, however, impediments that make it necessary to at least start on a different footing, where the plant still purchases the parts and the consolidation center provides handling services for materials it does not own. In addition, except for handling damage at the consolidation center, quality problem reports and technical information about parts must be communicated directly between the plant and the supplier. 

The consolidation center takes a considerable risk if it buys parts on a four-month lead-time to deliver them several times a day to the plant. Playing this right, particularly with thousands of items, requires good inventory control, sophisticated management, and the clout to influence suppliers to improve deliveries and reduce costs. A consolidation center typically starts out weaker than its manufacturing client in all three areas, but can catch up and become a real trading company. 

For overseas products, we should add up to two days of process time within the supplier plant, five days for ground transportation on both sides of the ocean, and ten or more days for the transoceanic passage. This produces a minimum of about three weeks to get one part from raw materials to overseas delivery. If the purchasing lead-time is four months, or 17 weeks, then it means that the parts spend 14 weeks waiting. 

Technically, some of the methods used to reduce lead-times domestically are equally applicable in this context. For example, milk mns could be set up in the country of origin to fill shipping containers with mixed loads from multiple suppliers. Practically, however, this is much more difficult to set up overseas than in the plant s own neighborhood. 

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