Does Your Logistics Company PFEP?
Creating standard ordering processes is crucial for a logistics company to provide value to its customer. When doing so, it’s beneficial to bring together all of the people involved with ordering and planning inbound materials. Coming together leverages everyone’s knowledge and expertise in order to create standard work based on best practices. When a logistics company sets new standards for ordering, it requires major changes in the way the customer’s team members work and how suppliers receive orders. However, this is critical to level the flow of materials, improve supplier order rates, and prevent redundancies and waste.
Building a PFEP (Plan for Every Part) file is one of the most effective ways for a logistics company to create standardization in an ordering process. A PFEP includes specific data on every part number coming from suppliers and every finished-good SKU going to customers. It contains all the information necessary to make informed decisions about transportation, packaging, inventory, placement, ordering quantities, and handling. It stimulates an environment of doing the right thing first. A PFEP ensures delivering the Right part, at the Right time, in the Right quantity. It’s the foundation for planning inventory levels, packaging, storage, delivery frequency, routes, cell and equipment layout.
A PFEP is typically organized into four sections:
- Accounting/purchasing: Price and price history, shipping terms, terms of sale.
- Manufacturing: When and where the part is used in the manufacturing process.
- Engineering: Part specifications and engineering standards.
- Logistics: Packaging dimensions, lot-size details, and shipping/receiving information.
PFEPs can be incredibly difficult to gather so be prepared for the work. As a logistics company dedicated to lean principles, LeanCor employs a number of logistics engineers whose primary purpose is to use the PFEP to engineer the network in a manner providing the lowest overall systems cost for the customer. When changes occur to the production schedule, these same engineers revise the routing network accordingly so costs will be minimized and materials will reach our customers when they are needed.
Ideally, a logistics company representing all customer departments will collect and audit the data for a PFEP. Key questions to ask after completing a PFEP are:
- How do supplier MOQs compare with our actual average daily usage? Are we ordering excess material every time just because of constraints specified in the MOQ?
- Do we have packaging data for all material? If not, how are we planning transportation and ensuring effective use of trailer and storage space? If we do have packaging data, is the packaging always done the same, standardized way?
- Do we know where our suppliers and our customers are located? (This may seem like a basic question, but many organizations do not know the physical locations of suppliers and customers. Computer systems with outdated information are often the cause of this.)
As a logistics company, LeanCor recognizes that change is not always easy, we strive to execute initiatives in realistic terms, where success can be measured and managed. Continuous improvement is a cornerstone of our vision. To be a significant supply chain partner requires a relentless drive toward perfection.