Your SlideShare is downloading. ×
0
FUNDAMENTALS OF LOGISTICS
BILL DUCAT| FEBRUARY 12, 2013
PITCH
Dynamics AX is Beyond ERP…the Next Evolution
• Business process platform
• End to end capabilities
• A platform to defeat ...
Dynamics as the Process Platform
FUNDAMENTALS OF LOGISTICS
Powerful
embedded
analytics and BI
Applications that
are an ass...
Broader View of Supply Chain/Logistics
FUNDAMENTALS OF LOGISTICS
Company
RF, DATA COLLECTION AND BARCODING ≠WMS/TMS
Radio Frequency Can Actually Hurt Productivity
• Order picker with paper can be faster than Radio Frequency Picker
– Some ...
AWAKE ISSUES
DIFFERENTIATION, TRUST, VALUE
Stakeholder Value Proposition
Increase
Revenue
Increase
Asset
Utilization
Increase
Profit
Margins
Financial
Objective
Incr...
Supply Chain Benefits (Broader)
FUNDAMENTALS OF LOGISTICS
Logistics Cost Breakdown - Typical
FUNDAMENTALS OF LOGISTICS
% of Total
Logistics
% of Sales
Transportation 43% 3.44%
Ware...
Fuel Costs Rising
FUNDAMENTALS OF LOGISTICS
Supply Chain Solutions Benefits Examples
• Reduction of Inventory Carrying Costs
– 8 to 15% Increased Inventory Turns
– So...
Warehouse Cost Breakdown - Typical
FUNDAMENTALS OF LOGISTICS
Shipping
20%
Storage
15%
Receiving
10%
Picking
55%
Key Questions Example (Value Mapping)
FUNDAMENTALS OF LOGISTICS
COGS What % of COGS is logistics costs?
CFO, CLO, COO, VP
...
KEY ITEMS OF LOGISTICS SYSTEMS
Key Items
GENERAL
Embedded RF
Configurable Workflow
Work Creation
Location
Zones
Stocking Limits
License PlateContr...
Warehouse Location Profile
FUNDAMENTALS OF LOGISTICS
• Location Profiles
– Dimensions & Capacity
– Mixed SKU
– Mixed Lots
...
Integrated RF
License Plate Tracking
Receiving / Putaway
 LicensePlatetrackedthroughentireoperation
 Systemgeneratedlabel ,blind label...
Key Concept
• Ability to deal with concepts separately:
–Where – Selecting the optimal putaway/picking location
–How – Bes...
Order Picker’s Time (non-WMS) - Typical
PRESENTATION TITLE
Travel
50%
Search
20%
Setup
10%
Extract
15%
Other
5%
Different Zones for Different Purposes
FUNDAMENTALS OF LOGISTICS
Pick Zone
Locate Zone
Units of Measure Matter
• Each unit of measure means different equipment, labor, etc.
• Unit picking should not be done ou...
Pick / Pack Catch Weight FlowLTL Batch Case Pick
Workflow
Pick
Catch
Weight
Print
Label
Stage
Load
Pick Stage
Pallet
Build...
Labor and Task Tracking
FUNDAMENTALS OF LOGISTICS
Key Items
INBOUND
Supplier Management
InboundContainer Management
ASN Receiving
Disposition
RF Receiving / Putaway
R...
Supplier Management
THIRD PARTY LOGISTICS / FREIGHT FORWARDERS
TRANSPORTATION PROVIDERS
Small
Domestic
International
Contr...
Shipment Packing Wizard
– Automated Shipment Creation
– Carton / Pallet Packing Wizard
– Container Nesting
– Compliant Pal...
Key Items
INVENTORY
InLocation Quarantine
Real-time Cycle Count
Hierarchical Item Classifications
Lot / Serial NumberC...
Inventory Status
Configurable Inventory
Status. InLocation
Quarantine!
Cycle Count Processing
• Cycle count creation
– Item, Location characteristics
– Manual or system generated
• Exception dr...
Replenishment
Automatic Replenishment
• Identify Replenishment needs
– Automatic Schedule
– Manual
– Min – Max Capacity
– ...
Key Items
OUTBOUND
Wave / Load Planning
Deferred Reservation
Whs/Siteat OrderEntry
Location at Wave
LP at Picking
Ru...
Wave Output
Wave Processing
Wave Planning
Prioritized WorkLocation Allocation
Load Planning
• Load Planning Workbench
– Automated / Manual Load Building
– Order / Line / Partial Line Selection
– Order...
Key Items
TRANSPORTATION
Embedded Rating Engines
Routing / Route Guides
Delivery Schedules
Freight Apportionment
TL, ...
Integrated WMS / TMS
 NOINTERFACES…
 Printshipping labelswith carrierinfo/tracking
# uponorderrelease(eliminate backend
...
Routing
Least Cost
Carrier
Best Way
Pre-assigned
Route
Manual
Routing
Routing
Guide
Intermodal
Routing
Constraints
Transit...
Routing Guide
Rate Shop
Multi-Carrier and Mode
Dock Management
Shipping Dock Workflow Controlled…
• Shipment Staging
• Quality Checks
• Pallet Building
• Dock Door Assig...
Post Freight – Landed Cost – Cost of Goods
• Post freight costs to invoice
• Configurable posting to G/L
• Freight accrual...
Freight Reconciliation
• Automate the Freight Bill Match and Pay process
• Electronic Freight Bill Invoice (210) from carr...
Key Items
MHE
 Pick toLight
 Conveyor/Sortation
 ASRS
 Voice
 Carousel
 Etc.
MHE – Made to Reduce Travel, Space or User Input
FUNDAMENTALS OF LOGISTICS
SUMMARY
C-Level Executive Value Proposition/Questions
• What if we could reduce your warehouse labor cost (usually one of, if not ...
Key Questions Example (Value Mapping)
FUNDAMENTALS OF LOGISTICS
COGS What % of COGS is logistics costs?
CFO, CLO, COO, VP
...
Dynamics as The New Evolution of Systems
• The Power of One
• The Power of Experience Domain Experts
• Beyond ERP
• Beyond...
THANK YOU – QUESTIONS?
Fundamentals logistics
Upcoming SlideShare
Loading in...5
×

Fundamentals logistics

445

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
445
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
36
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Fundamentals logistics"

  1. 1. FUNDAMENTALS OF LOGISTICS BILL DUCAT| FEBRUARY 12, 2013
  2. 2. PITCH
  3. 3. Dynamics AX is Beyond ERP…the Next Evolution • Business process platform • End to end capabilities • A platform to defeat competitors • Consortium of domain experts • Next evolution of solutions… FUNDAMENTALS OF LOGISTICS
  4. 4. Dynamics as the Process Platform FUNDAMENTALS OF LOGISTICS Powerful embedded analytics and BI Applications that are an asset Simplicity and agility Works the way you need it to Simple to use Get the right data to decision makers Complete industry- specific solutions Manufacturing Distribution Retail Services Public Sector Tailored to meet your needs
  5. 5. Broader View of Supply Chain/Logistics FUNDAMENTALS OF LOGISTICS Company
  6. 6. RF, DATA COLLECTION AND BARCODING ≠WMS/TMS
  7. 7. Radio Frequency Can Actually Hurt Productivity • Order picker with paper can be faster than Radio Frequency Picker – Some gains on searches, errors, etc. • Key: Strategies that leverage technology like RF, but reduce labor and travel time – Multi-order picking – Work flow (Walk paths) – Material handling integration – Zone picking – Pick/sort – Integrated transportation – Value added services – Etc. FUNDAMENTALS OF LOGISTICS
  8. 8. AWAKE ISSUES DIFFERENTIATION, TRUST, VALUE
  9. 9. Stakeholder Value Proposition Increase Revenue Increase Asset Utilization Increase Profit Margins Financial Objective Increasing Shareholder Value Corporate Objective Opportunity 10-20% Fill Rate Improvement  1-3% Increase in Service Level  10-15% Increase in Revenue  2-4% Margin Improvement  30-40% Increase in ROA  10-15% Inventory Reduction  5-10% Lower Fulfillment Cost  15-25% Lower Labor Cost  10-20% Transportation Savings  Improved Operating Efficiencies
  10. 10. Supply Chain Benefits (Broader) FUNDAMENTALS OF LOGISTICS
  11. 11. Logistics Cost Breakdown - Typical FUNDAMENTALS OF LOGISTICS % of Total Logistics % of Sales Transportation 43% 3.44% Warehouse 25% 2.09% Inventory Carrying Cost 29% 2.32% Administration 3% 0.24% TOTAL 100% 8.09%
  12. 12. Fuel Costs Rising FUNDAMENTALS OF LOGISTICS
  13. 13. Supply Chain Solutions Benefits Examples • Reduction of Inventory Carrying Costs – 8 to 15% Increased Inventory Turns – Source: Gartner Group • Eliminate Some Safety Stock – For a $100 Million dollar company, a 3% reduction in inventory achieves $500,000 in savings. – Source: APICS • Reduction in Customer Returns – 11 to 25% – Less Picking Errors – Source: Gartner Group FUNDAMENTALS OF LOGISTICS
  14. 14. Warehouse Cost Breakdown - Typical FUNDAMENTALS OF LOGISTICS Shipping 20% Storage 15% Receiving 10% Picking 55%
  15. 15. Key Questions Example (Value Mapping) FUNDAMENTALS OF LOGISTICS COGS What % of COGS is logistics costs? CFO, CLO, COO, VP Dist. COGS Is COGS in line with expectations? How does your compare with competitors? CFO, CLO, COO Logistics What metrics do you use to measure logistics performance? How does your current performance compare with company goals? CFO, CLO, COO, VP Dist. Logistics What metrics do you wish you could track but cannot? Why? CFO, CLO, COO, VP Dist. Fill Rate What is your order fill rate, and how does it compare with company goals? CFO, CLO, COO, VP Cust. Serv., VP Dist., VP Sales Fill Rate How do you measure the impact of unfilled orders on revenue? CFO, CLO, COO, VP Cust. Serv., VP Dist., VP Sales Growth Can your logistics capabilities handle all existing and planned channels? If not, why? CFO, CLO, COO, VP Dist. On-Time What is your on-time delivery %, and how does it compare with company goals? VP Cust. Serv., VP Dist., VP of Trans., Director of Dist., Director of Transp. Inventory How do your inventory turns and inventory accuracy compare to company goals? What are the reasons for the differences? CLO, CPP, VP of Distr., Director of Dist. Inventory Could safety stocks be lowered with better inventory accuracy (knowing what you have, where it is, especially when needed)? Chief Logistics Officer, VP of Distribution, Director of Distribution Labor How do you track labor productivity? Are your tracking capabilities sufficient? VP of Distribution, Director of Distribution Charge backs Do you incur chargebacks from customers? What are the primary violations? VP of Distribution, Director of Distribution Inv. Accuracy What is your current inventory accuracy (perpetual and location level)? How does this compare with company goals? VP of Distribution, Director of Distribution Inv. Accuracy How does inaccurate inventory affect your business (warehouse productivity, order fill rate, inventory turns)? VP Distr., Director of Dist. Physical Cost Do you perform an physical inventory? How long does it take and what are the total costs associate with a PI? Director of Distribution Trading Partner Do you have a compliance program with suppliers? How effective is it? CLO, VP of Dist. Order Accuracy What is the cost to correct an order filled incorrectly? What makes up those costs? VP Cust. Serv., VP Dist., VP of Trans., Director of Dist., Director of Transp.
  16. 16. KEY ITEMS OF LOGISTICS SYSTEMS
  17. 17. Key Items GENERAL Embedded RF Configurable Workflow Work Creation Location Zones Stocking Limits License PlateControlled Labor Tracking
  18. 18. Warehouse Location Profile FUNDAMENTALS OF LOGISTICS • Location Profiles – Dimensions & Capacity – Mixed SKU – Mixed Lots – License Plate Controlled – Check Digit Controlled – Permanent vs. Dynamic – Stocking Limits – Zones
  19. 19. Integrated RF
  20. 20. License Plate Tracking Receiving / Putaway  LicensePlatetrackedthroughentireoperation  Systemgeneratedlabel ,blind label,orASNlabel maybeutilized Inventory Management  LocationControlledLicensePlateTracking(optional)  Transfer/ AdjustbyLicensePlate  SupportforLicensePlatesin multiple statusesin asingle location Shipping  PickbyLicensePlate  Abilitytoallocatelicense platesandtrackto initialreceipt  AbilitytoRF confirmpicklicense plates
  21. 21. Key Concept • Ability to deal with concepts separately: –Where – Selecting the optimal putaway/picking location –How – Best way to perform the work
  22. 22. Order Picker’s Time (non-WMS) - Typical PRESENTATION TITLE Travel 50% Search 20% Setup 10% Extract 15% Other 5%
  23. 23. Different Zones for Different Purposes FUNDAMENTALS OF LOGISTICS Pick Zone Locate Zone
  24. 24. Units of Measure Matter • Each unit of measure means different equipment, labor, etc. • Unit picking should not be done out of the same location as pallet picking • Items may need to live in multiple bin locations • Reservations, putaway logic, replenishment, etc. need to be smart about UOM • Different channels drive different behaviors (direct to consumer vs. B2B) PRESENTATION TITLE
  25. 25. Pick / Pack Catch Weight FlowLTL Batch Case Pick Workflow Pick Catch Weight Print Label Stage Load Pick Stage Pallet Build Dock Check Load Group Pick VAS Labeling Pack by Order Example Configurable Workflow based on Criteria…
  26. 26. Labor and Task Tracking FUNDAMENTALS OF LOGISTICS
  27. 27. Key Items INBOUND Supplier Management InboundContainer Management ASN Receiving Disposition RF Receiving / Putaway Rules Driven Locating Cross-Docking Appointment Scheduling
  28. 28. Supplier Management THIRD PARTY LOGISTICS / FREIGHT FORWARDERS TRANSPORTATION PROVIDERS Small Domestic International Contract In-House Large Domestic FACTORIES SUPPLIERS DISTRIBUTION Branded Warehouse International Retail Cross-Dock/ Flow Through Business Manufacturing INBOUND SUPPLY CHAIN VISIBILITY End-to-End Event Management DIRECT DELIVERY Purchase Order Shipment ASN PO Confirm (Qty, Price, Dates) Customs Documents Shipment Status
  29. 29. Shipment Packing Wizard – Automated Shipment Creation – Carton / Pallet Packing Wizard – Container Nesting – Compliant Pallet / Case Label Printing – ASN Generation
  30. 30. Key Items INVENTORY InLocation Quarantine Real-time Cycle Count Hierarchical Item Classifications Lot / Serial NumberControl Automated Replenishment RF ProductionMoves RF Report as Finished
  31. 31. Inventory Status Configurable Inventory Status. InLocation Quarantine!
  32. 32. Cycle Count Processing • Cycle count creation – Item, Location characteristics – Manual or system generated • Exception driven cycle counts – Short Pick – Damaged Product – Putaway Exceptions • Real-time Cycle count – RF cycle count execution – Immediate inventory updates, or hold for approval – Does NOT freeze location for pending count
  33. 33. Replenishment Automatic Replenishment • Identify Replenishment needs – Automatic Schedule – Manual – Min – Max Capacity – Allocation Rules • Replenishment Work – RF Work Execution – Priority Driven Pick LocationsReserve Locations
  34. 34. Key Items OUTBOUND Wave / Load Planning Deferred Reservation Whs/Siteat OrderEntry Location at Wave LP at Picking Rules based Allocation Work Creation RF Picking / Staging / Loading Pick & Pack ConfigurableWorkflow
  35. 35. Wave Output Wave Processing Wave Planning Prioritized WorkLocation Allocation
  36. 36. Load Planning • Load Planning Workbench – Automated / Manual Load Building – Order / Line / Partial Line Selection – Order Splitting – Pack Quantity Override PO-1 PO-3PO-2
  37. 37. Key Items TRANSPORTATION Embedded Rating Engines Routing / Route Guides Delivery Schedules Freight Apportionment TL, Rail, Ocean,LTL, Parcel Load Planning Compliance Labeling
  38. 38. Integrated WMS / TMS  NOINTERFACES…  Printshipping labelswith carrierinfo/tracking # uponorderrelease(eliminate backend process)  Integratedweight check andmanifesting  LaborPlanningandLoadPlanningconstraint modeling  Sharedcustomerandorderinformation  Improved sortationandspaceutilizationat shipping dock  Closed loopFreight Charge/ Invoice • Rate shopping • Order consolidation • Load planning Cartons, weights Selected orders Planned loads, tracking #’s Freight charges, manifest Weigh ‘Wave’ Process Pick/Pack Manifesting Close Load Close Shipment Shipping Documentation Outbound Optimization
  39. 39. Routing Least Cost Carrier Best Way Pre-assigned Route Manual Routing Routing Guide Intermodal Routing Constraints Transit Times Delivery Dates Item / Carrier Item / Mode Carrier / Customer Mode / Customer Carrier / Hub Zone / Hub
  40. 40. Routing Guide
  41. 41. Rate Shop
  42. 42. Multi-Carrier and Mode
  43. 43. Dock Management Shipping Dock Workflow Controlled… • Shipment Staging • Quality Checks • Pallet Building • Dock Door Assignment • RF Loading • Ship Confirm
  44. 44. Post Freight – Landed Cost – Cost of Goods • Post freight costs to invoice • Configurable posting to G/L • Freight accrual/expense • Freight revenue (bill to customer)
  45. 45. Freight Reconciliation • Automate the Freight Bill Match and Pay process • Electronic Freight Bill Invoice (210) from carriers • Match Rules with Tolerance – Match down to Accessorial Charges – Proof of Delivery prior to Pay • Payment Rules – GL Coding – Freight Accrual and Apportionment Valid Shipment? Duplicate? Cost within Tolerance? Accessorial Fees Valid? Delivered on Time?
  46. 46. Key Items MHE  Pick toLight  Conveyor/Sortation  ASRS  Voice  Carousel  Etc.
  47. 47. MHE – Made to Reduce Travel, Space or User Input FUNDAMENTALS OF LOGISTICS
  48. 48. SUMMARY
  49. 49. C-Level Executive Value Proposition/Questions • What if we could reduce your warehouse labor cost (usually one of, if not the single highest cost to do business) by 20%? Would that enable you to do more business with the same staff, or reduce staff to save costs?” • “How many Physical Inventories do you complete per year and at what cost?” “2 per year, and they cost $20K each • Equipment that is needed can be utilized longer due to better cube utilization and flow of goods design (less run time = longer life). • What would it mean to your company to reduce your inventory cost by 1%?” FUNDAMENTALS OF LOGISTICS
  50. 50. Key Questions Example (Value Mapping) FUNDAMENTALS OF LOGISTICS COGS What % of COGS is logistics costs? CFO, CLO, COO, VP Dist. COGS Is COGS in line with expectations? How does your compare with competitors? CFO, CLO, COO Logistics What metrics do you use to measure logistics performance? How does your current performance compare with company goals? CFO, CLO, COO, VP Dist. Logistics What metrics do you wish you could track but cannot? Why? CFO, CLO, COO, VP Dist. Fill Rate What is your order fill rate, and how does it compare with company goals? CFO, CLO, COO, VP Cust. Serv., VP Dist., VP Sales Fill Rate How do you measure the impact of unfilled orders on revenue? CFO, CLO, COO, VP Cust. Serv., VP Dist., VP Sales Growth Can your logistics capabilities handle all existing and planned channels? If not, why? CFO, CLO, COO, VP Dist. On-Time What is your on-time delivery %, and how does it compare with company goals? VP Cust. Serv., VP Dist., VP of Trans., Director of Dist., Director of Transp. Inventory How do your inventory turns and inventory accuracy compare to company goals? What are the reasons for the differences? CLO, CPP, VP of Distr., Director of Dist. Inventory Could safety stocks be lowered with better inventory accuracy (knowing what you have, where it is, especially when needed)? Chief Logistics Officer, VP of Distribution, Director of Distribution Labor How do you track labor productivity? Are your tracking capabilities sufficient? VP of Distribution, Director of Distribution Charge backs Do you incur chargebacks from customers? What are the primary violations? VP of Distribution, Director of Distribution Inv. Accuracy What is your current inventory accuracy (perpetual and location level)? How does this compare with company goals? VP of Distribution, Director of Distribution Inv. Accuracy How does inaccurate inventory affect your business (warehouse productivity, order fill rate, inventory turns)? VP Distr., Director of Dist. Physical Cost Do you perform an physical inventory? How long does it take and what are the total costs associate with a PI? Director of Distribution Trading Partner Do you have a compliance program with suppliers? How effective is it? CLO, VP of Dist. Order Accuracy What is the cost to correct an order filled incorrectly? What makes up those costs? VP Cust. Serv., VP Dist., VP of Trans., Director of Dist., Director of Transp.
  51. 51. Dynamics as The New Evolution of Systems • The Power of One • The Power of Experience Domain Experts • Beyond ERP • Beyond Four Walls FUNDAMENTALS OF LOGISTICS
  52. 52. THANK YOU – QUESTIONS?
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×