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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. 2 Agenda Introduction Organising your supply chain How to get started Conclusion
  3. 3. Introduction
  4. 4. A harmonious performance ...
  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.
  6. 6. Using the specific qualities of the various players, the conductor composes and implements best practice solutions to form a balanced symphony.
  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.
  8. 8. How fit is your supply chain?
  9. 9. Organising your supply chain
  10. 10. © 2012 LBB International Supply chain model
  11. 11. Supply chain strategy Sourcing/Purchasing Strategy 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)
  13. 13. Product characteristics Inventory Transporta-tion & Storage 1 10 100 10,000 1,000 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
  15. 15. Logistics control = Planning, coordinating and conducting processes and activities within a chain.
  16. 16. 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 CODP
  18. 18. Supply chain resources  Culture  Organisation structure & interdependencies  ICT = qualifier!
  19. 19. Supply chain business processes Source: Lambert et al. (1998) 19
  20. 20. Supply chain network structure
  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)
  22. 22. Organising your supply chain STRATEGIC FIT! © 2012 LBB International ALIGNMENT! ALIGNMENT!
  23. 23. 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.
  25. 25. The SECOND STEP is to design the future supply chain (TO-BE) for the organisation with its targeted performance.
  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
  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.
  28. 28. 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!
  30. 30. Thank you LBB International B-5-8 Plaza Mont Kiara Mont Kiara 50480 Kuala Lumpur Malaysia Dr. Marco Tieman Chief Executive Officer