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Distribution / Logistics for Management Consultants
The document discusses key aspects of distribution and logistics for management consultants, emphasizing the complexity of supply chains and the importance of analytical and innovative approaches to find savings and improvements. It outlines the goals of the distribution model, basic laws of distribution, and typical problems encountered, providing strategies for cost minimization and optimization in logistics. Additionally, it offers links to courses and presentations for further learning on supply chain management and consulting techniques.
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Distribution / Logistics for Management Consultants
- 1. 1 Distribution / Logisticsfor Management Consultants Main things you should know to participate in a consulting project
- 2. 2 Supply chain isextremely complex, especially in the era of multichannel and globalization. Therefore, you have to become very analytical and innovative to find savings and improvements
- 3. 3 It consists of5 that supply chain consist of Distribution / Logistics Procurement / Purchasing Production Planning Sales Forecasting Customer service
- 4. 4 In this presentationI will talk about Distribution / Logistics Distribution / Logistics Procurement / Purchasing Production Planning Sales Forecasting Customer service
- 5. 5 Thanks to thispresentation you will learn main issues in Distribution / Logistics that may occur during a consulting project
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- 7. 7 Distribution is thephysical part of the supply chain. Its aim is to get the right products to the factory or customers on time, unharmed, fast while keeping as little inventory as possible
- 8. 8 I will discuss5 subject Goals of Distribution Model Basic laws of distribution Where you can find savings in distribution Typical problems in Distribution Different types of distribution
- 9. 9 This presentation isa part of my online course devoted to Supply Chain. For more check the link with discount below. You will find there a lot of cases with calculations in Excel provided. Click to check my course Supply Chain for Management Consultants $190 $15
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- 11. 11 The primary goalsof distribution are cost minimization and proper execution of orders Costs minimization % of order execution Cost related to the inventory ▪ Cost of warehousing ▪ Cost of frozen capital ▪ Cost of lost sales ▪ On Time ▪ In Full ▪ Free of Error ▪ Minimize the cost per unit of transportation
- 12. 12 For transportation wehave simple goals that can be measured using the OT-IF-EF framework IFOT% order execution EF 90%90%72,9% 90% ▪ Delivered on time ▪ In Full – meaning the exact number as it was supposed to be delivered ▪ Error Free – exactly what was asked for with all accompanying documents
- 13. 13 You would alsolook at the cost per unit. I recommend decomposing it so you can say more about the drivers of this cost COST TONNE = COST km or miles LOAD x x TONNE km or miles LOAD ▪ Here you want to minimize the cost of 1 km ▪ Here you want to minimize the number of km that a single shipment (load) has to go through ▪ Here you want to increase the usage of the shipment (load) – have more tons there
- 14. 14 Basic laws ofdistribution
- 15. 15 There are 4basic laws that we can observe in Logistics Inventory Costs Transpor- tation Cost Facility Costs Response time Total Logistics Cost Number of Facilities Number of Facilities Number of Facilities Number of Facilities Relationship between Number of Facilities and Facility Costs Variation in Logistics Cost and Response Time with Number of Facilities Relationship between Number of Facilities and Inventory Costs Relationship between Number of Facilities and Transportation Costs
- 16. 16 Different types ofdistribution
- 17. 17 Let’s have alook at the 2 examples of direct shipping Suppliers Retail Stores Direct shipping Suppliers Retail Stores Direct shipping with milk run
- 18. 18 DC Suppliers Retail Stores Allshipment via DC Suppliers Retail Stores DC Milk runs from DC Let’s have a look at 2 examples shipment via DC
- 19. 19 There is noideal distribution scheme. Each and every has its pros and cons Pros ▪ No intermediate warehouse ▪ Simple to coordinate Cons ▪ Lower transportation costs for small lots ▪ Lower inventories ▪ Lower inbound transportation cost through consolidation ▪ Lower outbound transportation cost for small lots ▪ Very low inventory requirement ▪ Lower transportation cost through consolidation Direct shipping Direct shipping with milk runs All shipments via central DC with inventory storage All shipments via central DC with cross-dock Shipping via DC using milk runs Tailored network ▪ Transportation choice best matches needs of individual product and store ▪ High inventories (due to large lot size) ▪ Significant receiving expense ▪ Increased coordination complexity ▪ Increased inventory cost ▪ Increased handling at DC ▪ Further increase in coordination complexity ▪ Increased coordination complexity ▪ Highest coordination complexity
- 20. 20 Where you canfind savings in distribution
- 21. 21 In distribution thereare number of standard places where you can find savings Warehousing Distribution Logistics Cost per kilometer Truck utilization Frozen capital Warehousing space Number of kilometers Waste in transport Waste in warehousing Allocation of equipment Stock outs ▪ Consolidate transportation contracts and negotiate prices ▪ Change trucks ▪ Reduce fuel consumption ▪ Check of real km with the planned ones ▪ Move orders to another distribution center/plant ▪ Change routing ▪ Sell return trips ▪ Consolidate transports to the same direction / region ▪ Introduce second level in trucks ▪ Improve of pallets controls ▪ Improve the control of expiry date ▪ Introduce FIFO ▪ Improve security checks ▪ Reallocate resources to other locations ▪ Centralize warehouses ▪ Negotiate price ▪ Reorganize warehouses ▪ Find optimal levels of stocks with respect to loss revenue due to stock out and cost of frozen capital
- 22. 22 Typical problems inDistribution
- 23. 23 There are afew typical problem usually occur in logistics Potential Problem ▪ Lack of control over the flow of goods in distribution channels Analysis needed ▪ Not optimal distribution model (distribution channel structure, location, distribution centers number. Analysis of distribution stage etc.) Logistics ▪ Employed resources (people, cars, fork lift trucks etc.) are higher than needs ▪ Low usage of cars ▪ Low planning of car routes ▪ Low customer service level (OTIFEF) ▪ Low level of returnable packaging return ▪ Level of control over goods in distribution channels (access to stocks in warehouses in specific channels) ▪ Identification of alternative distribution models (Best practices analysis, Competition analysis) ▪ Analysis of employed resources usage (f.e. Number of shipments per one car, number of loading per one fork lift truck etc.) ▪ Analysis of cars utilization (number of goods transported vs. cars capacity) ▪ Analysis of car loading methods ▪ Analysis of car packing / palletizing methods ▪ Low customer service level (OTIFEF) ▪ Analysis of OTIFEF (execution of dispatch on ticme, fully, without mistakes) ▪ Analysis of routes planning process, random analysis of real routes ▪ Packaging sent vs. returned
- 24. 24 There are afew typical problem usually occur in stock management Potential Problem ▪ Not optimal stock level (too less – shortages, too much – risk of outdating, frozen capital, wrong exploitation of depot etc.) Analysis needed Stock management ▪ Analysis of the lever of order realization (number of executed vs. number of accepted ) – Analysis of lost sales ▪ Analysis of products availability within last months ▪ Analysis of stock level vs. average monthly sale (sale coverage with stocks, outdating risk) ▪ Analysis of the way in which stock level are evaluated ▪ Low usage of warehouse space ▪ Stocks levels vs. warehouse capacity (number of pallets stored vs. theoretical number of pallet places), Analysis of warehouse organization ▪ Employed resources (people, cars, fork lift trucks etc.) are higher than needs ▪ Analysis of the usage of employed resources (i.e.. number of loadings per one forklift, etc.), benchmarking between warehouses / production plants ▪ High warehouse losses (shortages, damages, utilization etc.) ▪ Analysis of warehouse losses costs and reasons ▪ High value of spoiled goods (f.e. outdated) ▪ Analysis of costs related to spoiled goods
- 25. 25 For more checkthe link with discount below. You will find there a lot of cases with calculations and Excel provided. Click to check my course Supply Chain for Management Consultants $190 $15
- 26. 26 You can alsocheck the presentation with an overview of my most favorite functions in Excel Essential Excel for Business Analysts and Consultants A practical guide presentation
- 27. 27 Check what coursewill help you to be word class Management Consultant Top 10 courses that every Management Consultant should take My super objective view presentation
- 28. 28 There are alsosome books that I highly recommend Top 25 books that every Management Consultant should read My super objective view presentation
- 29. 29 Subscribe to ourchannels: www
- 30. 30 If you wantto check how in practice to manage a consulting project a would recommend my presentation How to manage a consulting project? A practical guide presentation
- 31. 31 You can alsofind some useful tips on Excel Business modeling of offline businesses in Excel A practical guide presentation
- 32. 32 You can alsofind some useful tips on Excel Retail for Business Analysts and Management Consultants A practical guide presentation
- 33. 33 Check my extensivepresentation on productivity hacks to see how you can me 10x more productive Management consultant productivity hacks How to be lazy and still get things done presentation
- 34. 34 Check my presentationon market research methods to understand them properly Market research Practical guide for startups and entrepreneurs presentation
- 35. 35 Check my otherpresentations 5 examples of business / financial models in Excel Practical guide how to check whether the business makes sense presentation
- 36. 36 Check my otherpresentations Essential Lean Manufacturing for Management Consultants Practical guide how to cut costs presentation
- 37. 37 Check my otherpresentations What is an issue tree and how to use it? Practical guide with examples presentation
- 38. 38 Check my otherpresentations Excel shortcuts for Management Consultants and Business Analysts Practical guide how to work fast in Excel presentation
- 39. 39 You can alsohave a look at how to create a financial model in Excel Financial Modeling for Business Analysts and Management Consultants Step by step guide presentation
- 40. 40 Check also myother presentations Management Consulting Presentations Practical guide how to prepare a great presentation presentation
- 41. 41 Check my presentationthat will help you get into consulting How to get into consulting Practical guide how to pass the case part presentation
- 42. 42 I recommend alsolooking at some techniques to improve your business. Click on the cover below to go to the presentation How to become world class analyst A practical guide presentation
- 43. 43 Check also myother presentations Management Consulting Presentations Practical guide how to prepare a great presentation presentation
- 44. 44 Check also myother presentations Production for Management Consultants Practical guide presentation
- 45. 45 Check also businessmodeling in Excel Business models Practical guide for startups and entrepreneurs presentation
- 46. 46 Check my presentationon starting and running consulting company How to create management consulting presentations? A practical guide presentation
- 47. 47 Check my extensivepresentation on productivity hacks to see how you can me 10x more productive Management consultant productivity hacks How to be lazy and still get things done presentation
- 48. 48 If you needmore detailed version on productivity hacks you can check our course on productivity hacks Click to check my course Management Consulting Productivity Hacks $45 $15
- 49. 49 Check my presentationon starting and running consulting company Start and run consulting company A practical guide presentation
- 50. 50 Check my presentationon restaurant business model to understand it properly How to open a successful restaurant A practical guide presentation
- 51. 51 Check my presentationon on-line models to understand them properly On-line Business Models A practical guide presentation
- 52. 52 For more checkalso my on-line course Click to check my course On-line Business Models in Excel – Practical Guide $45 $15
- 53. 53 There is aninteresting summary of ways to test cheaply businesses MVP – how to test your business idea without building the product A practical guide presentation