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The Lean Supply Chain

Happy (Old) New Year

We’ve all heard stories about inefficiencies at the post office, but the latest one is a doozy…Pa. railroad calendar delivered 63 years late. “A northeastern Pennsylvania newspaper has just received a calendar to help ring in the new year - except the year is 1950. Scranton's The Times-Tribune reports a mail carrier delivered it 63 years late without explanation on Friday.”

This kind of reinforces the old joke that the reason that the cost of stamps are so high is that most of it is for storage!

This happened at a time when, as the New Year begins, most of us are scurrying around trying to locate (or buy) and put up our new calendars with our favorite pictures (I prefer lighthouses). To me, this always reinforces the importance of planning and scheduling.

The (very) late postal delivery mentioned in the article reminds us, in an extreme way, to always think about the trade-offs between inventory carrying costs and transit times when considering the cost of shipping alternatives. As we know, the longer a product is in-transit, the longer a company has its money invested. But faster shipping is usually more expensive than slow shipping.

The actual calculation is a fairly easy breakeven analysis that I’m not sure many of us use very often, if at all (i.e. carrying costs for inventory in-transit vs. transit times for various modes of transportation).

So it’s a good reminder to start the year off on the right foot and think about those types of trade-offs when analyzing the cost and efficiency of your Supply Chain’s value stream.


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