Logistics Pipeline management

Pipeline management is the process whereby manufacturing and

procurement lead times are linked to the needs of the marketplace. At
the same time, pipeline management seeks to meet the competitive
challenge of increasing the speed of response to those market needs.
Objectives of Logistics Pipeline Management
• Lower costs
• Higher Quality
• More Flexibility
• Faster response times

The achievement of these goals is dependent upon managing the supply

chain as an entity and seeking to reduce the pipeline length and/or to
speed up the flow through that pipeline. In examining the efficiency of
supply chains it is often found that many of the activities that take place
add more cost than value.
Value adding time vs. Non-value-adding time

• Value-adding time is time spent doing something that creates a

benefit for which the customer is prepared to pay. Thus, we could classify
manufacturing as a value-added activity as well as the physical movement of
the product and the means of creating the exchange. The old adage ‘the right
product in the right place at the right time’ summarises the idea of customer
value-adding activities. Thus, any activity that contributes to the achievement
of that goal could be classified as value adding.

On the other hand, non-value-adding time is time spent on an activity whose

elimination would lead to no reduction of benefit to the customer. Some non-
value adding activities are necessary because of the current design of our
processes but they still represent a cost and should be minimised.
An Example of
value-added
time for
pharmaceutical
product
Cost-added vs. value-added time
Reducing non-value adding time
Bottleneck Management
• A bottleneck is the slowest activity in a chain and whilst it may often
be a machine, it could also be a part of the information flow such as
order processing. The throughput time of the entire system is
determined by bottleneck activities. It follows therefore that to speed
up total system throughput time it is important to focus on the
bottlenecks, to add capacity where possible and to reduce set-ups
and set-up times if applicable.
• It is done for efficiency.