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Logistics excellence: creating a harmonious performance

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Creating a harmonious performance of a supply chain is an art. How fit is your supply chain? A balanced symphony can be achieved by a systematic approach towards supply chain design and control. A supply chain model is introduced to assess and design supply chains. A 4-step approach is proposed to effectively implement logistics excellence in the supply chain for an organisation.

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Logistics excellence: creating a harmonious performance

  1. 1. Logistics Excellence: Creating a harmonious performance Dr. Marco Tieman (CEO LBB International & Adjunct Professor Universiti Tun Abdul Razak) Kuala Lumpur, 26 August 2014
  2. 2. www.lbbinternational.com 2 Agenda Introduction Organising your supply chain How to get started Conclusion
  3. 3. www.lbbinternational.com Introduction
  4. 4. A harmonious performance ... www.lbbinternational.com
  5. 5. Logistics Excellence is the art of a conductor in front of the orchestra, recognising the specific qualities of the players in the orchestra (read: supply chain partners) and knowing how to weld these together into a harmonious performance. www.lbbinternational.com
  6. 6. Using the specific qualities of the various players, the conductor composes and implements best practice solutions to form a balanced symphony. www.lbbinternational.com
  7. 7. Logistics excellence is reached when the company has (1) short supply chain lead-times, (2) low variation in the supply chain, and (3) low waste in the supply chain. www.lbbinternational.com
  8. 8. How fit is your supply chain? www.lbbinternational.com
  9. 9. Organising your supply chain www.lbbinternational.com
  10. 10. www.lbbinternational.com © 2012 LBB International Supply chain model
  11. 11. Supply chain strategy Sourcing/Purchasing Strategy www.lbbinternational.com Brand Brand Production & Distribution Value/Commercial Value/Commercial Strategy Strategy Production & Distribution Strategy Strategy Sourcing/Purchasing Strategy
  12. 12. Supply chain objectives  Customer service objectives (order cycle time, inventory availability, order fill rate)  Logistics objectives (reduce lead-times, improve deliver reliability & flexibility, and reduce integral supply chain costs) www.lbbinternational.com
  13. 13. Product characteristics Inventory Transporta-tion & Storage 1 10 100 10,000 1,000 www.lbbinternational.com Handling Value density Packing density 100 Source: Goor et al. (1999)
  14. 14. Market requirements What value we offer in the eyes of the customer…  Taste  Preferences (flowers): stalk/stem (short, long), flower bud (open, closed)  Halal: Muslim vs. non-Muslim country  Packaging (colour, materials, portions) & labelling www.lbbinternational.com
  15. 15. Logistics control = Planning, coordinating and conducting processes and activities within a chain. www.lbbinternational.com
  16. 16. www.lbbinternational.com Where is my Customer Order Decoupling Point (CODP)? Logistics control
  17. 17. Logistics control  Customisation -> CODP upstream -> need for fast, frequent and order driven delivery  Floating stock -> CODP downstream -> pipeline becomes virtual distribution centre www.lbbinternational.com CODP
  18. 18. Supply chain resources  Culture  Organisation structure & interdependencies  ICT = qualifier! www.lbbinternational.com
  19. 19. Supply chain business processes www.lbbinternational.com Source: Lambert et al. (1998) 19
  20. 20. Supply chain network structure www.lbbinternational.com
  21. 21. Supply chain peformance  Efficiency (cost, profit, ROI)  Effectiveness (brand, complaints, waste)  Flexibility (mix flexibility, volume flexibility)  Responsiveness (lead-time)  Robust (rejects, availability of assets) www.lbbinternational.com
  22. 22. Organising your supply chain www.lbbinternational.com STRATEGIC FIT! © 2012 LBB International ALIGNMENT! ALIGNMENT!
  23. 23. www.lbbinternational.com How to get started
  24. 24. The FIRST STEP is to map the current supply chain (AS-IS) for the organisation and measure its performance, strategic fit and degree of alignment. www.lbbinternational.com
  25. 25. The SECOND STEP is to design the future supply chain (TO-BE) for the organisation with its targeted performance. www.lbbinternational.com
  26. 26. The THIRD STEP is to improve the ‘fitness’ of the organisation: (1)identify quick wins -> motivation (2)training of staff -> capabilities (3)involve management -> endurance (4)establish project teams -> implementation power (5)establish a conductor -> coordination www.lbbinternational.com
  27. 27. The FOURTH STEP is to implement improvement programs, in order to (1) shorten its supply chain lead-times, reduce its variation and waste; (2) establish strategic fit; and (3) ensure alignment with its markets. www.lbbinternational.com
  28. 28. www.lbbinternational.com Conclusion
  29. 29. Logistics excellence is the art of a conductor in front of the orchestra, recognising the specific qualities of the players in the orchestra and knowing how to weld these together into a harmonious performance. Logistics excellence can be achieved by four steps: (1) AS-IS analysis, (2) TO-BE design, (3) improving the fitness of the organisation, and (4) effective implementation. For more information on logistics excellence, please contact us! www.lbbinternational.com
  30. 30. Thank you LBB International B-5-8 Plaza Mont Kiara Mont Kiara 50480 Kuala Lumpur Malaysia Dr. Marco Tieman Chief Executive Officer marco@lbbinternational.com www.lbbinternational.com www.logisticsexcellence.blogspot.com

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