More Related Content Similar to Ch11-Network Design-Supply Chain Management (20) 2. Redesigning the Product for
Postponement
• Example: HP Printers
• HP produces its products for consumption around the
world
• While the inkjet printer for the most part is basically the
same, there are two features that differentiates
destination: instruction manual and the power supplies
• Produce inkjet printers that are largely complete except
they lack a power supply and printed instructions
• These are then shipped to regional warehouses
• When orders are received, generic printers are
withdrawn from stock and paired with the appropriate
power supply and manual.
• Postponement was able to reduce 25% of stock
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3. Supply Chain Networks
• Facility Location
• Vehicle Routing
• The Role of Software
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4. Factors Affecting Industrial Location
• Desired customer service level
• Access to transportation
• Freight rates
• Tax rates and tax breaks
• Real estate: costs, quality, availability
• Employment quality and availability
• Climate, livability
• Regional culture
• Duty and duty drawback laws (if global)
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5. • Spatial/Temporal Integration
• Framework for Total Cost Implementation
Network Design
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rights reserved.
6. Gaining and Maintaining
a Systems Perspective
DEFINITION OF SYSTEMS ANALYSIS
• A set of interrelationships designed to achieve the
desired objective
• Total integrated effort to accomplish the desired
objective
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8. • Total system performance is singularly important
• Components or parts of system need not have
optimum construction
• A functional relationship exists between components
called trade-off which may enhance or hinder system
performance
• Components linked together in a balanced system
will produce greater end results than the sum of
individual components
Integration Principles
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9. • Cost to Cost
Example – More Transportation for Less Inventory
• Cost to Service
Example – More Cost for Increased Revenue
Key Trade-Offs
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10. Supply Chain Design Questions
• Where should the manufacturing plants be located and which products should
they produce?
• How many distribution centers should the firm use, and where should they be
located?
• What customers or market areas should be serviced from each distribution center?
• Which product lines should be produced or stocked at each plant or distribution
center?
• What is the role of master or regional distribution centers relative to field or local
distribution centers?
• What sourcing and marketing channels should be used to source material and
serve international markets?
• What combination of public and private warehouse facilities should be used? and
• What service providers and value added services should be used meet market
requirements?
• What is the impact of increases in fuel prices?
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12. • Transportation Cost Integration (Spatial)
• Inventory Cost Integration (Temporal)
• Total Cost-Service Integration
Facility Network Integration
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13. • Basic Economies
• Economy of Size
• Economy of Distance
• Transportation Economies
• Quantity Discount
• Tapering Principle
• Generalized Relationship
Transportation Cost Integration (Spatial)
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14. Transport
Cost
Number of Distribution Locations
Outbound
Inbound
Total
Transport
Transport Cost As A Function Of
Distribution Locations
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16. • Basic Economies
• Single Location
• Multiple Location
• Generalized Relationship
Inventory Cost Integration (Temporal)
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rights reserved.
20. Supply Chain Design Criteria
• Design to minimize landed cost
• Design to maximize asset utilization
• Design to maximize competitive positioning
(relevancy)
• Design to minimize risk
• Design to maximize control
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21. Logistics System Design
Requirements
Commodity Integrated Service Customized
Service
• Direct bulk or
crossdock delivery
• Limited product
requirements
• Unique information
requirements and
capabilities
• Precise
management
requirements
• Delivery to customer
DC
• Broad product
offering
• Range of information
requirements and
capabilities
• Accept more generic
strategies
• Delivery in small
quantities
• Select products
• Tracking of individual
behavior
• Individual focused
strategies
22. Mass Merchant Comparison
• Target
• New and unique product
offerings
• Maintain inventory
responsibility
• Maintain forecasting
• Wal*Mart
• Low cost product
• Shift inventory management
to vendor
• Collaborative forecasting
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23. Trend of Diesel Price Per Gallon
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21,
1994
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2000
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2007
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2009
Mar
21,
2010
Mar
21,
2011
Mar
21,
2012
Mar
21,
2013
Mar
21,
2014
Mar
21,
2015
Weekly Diesel Fuel Prices
$/gallon
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rights reserved.
