LOGISTICS & SUPPLY CHAIN MANAGEMENT - uniroma2.it

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 What is a Supply Chain?Capitolo I. Il concetto di strategia Supply Chain inclu...

12 downloads 608 Views 540KB Size
LOGISTICS & SUPPLY CHAIN MANAGEMENT Section 1 Understanding the Supply Chain and its logistics activities CORRADO CERRUTI

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

What is Logistics?

 Logistics takes care of the activities and the decisions

releted to:  

Physical flows Information flow

from the raw materials suppliers till the customers.  Logistics activities are splitted among:  inbound logistics  plant logistics  outbound logistics 2

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

What is a Supply Chain?

 Supply Chain includes all the activities involved,

directly or indirectly, in fulfilling a customer request (there including also logistics)  Includes manufacturers, suppliers, transporters, warehouses, retailers, and customers  Within each company, the supply chain interacts with all functions involved in fulfilling a customer request (product development, marketing, operations, distribution, finance, customer service)

3

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The Supply Chain

4

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

What is a Supply Chain?

Detergent supply chain at Wal-Mart

P&G or other manufacturer

Wal-Mart or third party DC

Plastic Producer

Wal-Mart Supermarket

Chemical manufacturer (e.g. Oil Company)

Tenneco Packaging

Chemical manufacturer (e.g. Oil Company)

Customer wants detergent and goes to Wal-Mart

Paper Manufacturer

Timber Industry

Tier 2

5

Tier 3

Tier 1

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Metaphors of the Supply Chain The Chain

The Network or the Web

The Stream

6

The Pipeline

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The objective of a Supply Chain  Maximize overall value created  Supply chain value (or supply chain surplus):

difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customer’s request  Value is correlated to supply chain profitability (difference between revenue generated from the customer and the overall cost across the supply chain)

7

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The objective of a Supply Chain  Example: Dell receives €2000 from a customer for a    

computer (revenue) Supply chain incurs costs (information, storage, transportation, components, assembly, etc.) Difference between €2000 and the sum of all of these costs is the supply chain profit Supply chain profitability is total profit to be shared across all stages of the supply chain Supply chain success should be measured by total supply chain profitability, not profits at an individual stage 8

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The objective of a Supply Chain  Sources of supply chain revenue: the customer  Sources of supply chain cost: flows of information,

products, or funds between stages of the supply chain

 Supply

chain management is the management of flows between and among supply chain stages to maximize total supply chain profitability 9

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The objective of Logistics

 Maximize

overall value function/department by:

created

by

this



Minimizing logistics costs



Maximizing revenues through an outstanding logistics service



Managing the trade-offs between logistics costs and revenues

 Logistics performance might be a key target for the

company or a “nice-to-have” 10

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Decision Phases of a Supply Chain There are three major decision phases in a supply chain, with different time horizons:  Supply chain strategy or design (long-term)  Supply chain planning (medium-term)  Supply chain operation (short-term)

11

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Supply Chain Strategy or Design  Decisions about the structure of the supply chain and

what processes each stage will perform  Strategic supply chain decisions   



Locations and capacities of facilities Products to be made or stored at various locations Modes of transportation Information systems

 Supply chain design must support strategic objectives  Supply chain design decisions are long-term and

expensive to reverse – must take into account market uncertainty

12

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Supply Chain Planning (1)

 Definition of a set of policies that govern medium

and short-term operations (time frame: 12 months down to 3 months)  Fixed by the supply configuration from previous

phase. Supply constraints!

chain

configuration

establishes

 Starts with a forecast of demand in the coming year

and is deployed over different time horizons … from a rough check on the overall capacity and requirements down to specific plans. 13

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Supply Chain Planning (2)

 Planning decisions:  Which markets will be supplied from which locations  Subcontracting of manufacturing  Inventory policies  Timing and size of market promotions

 Must

consider in planning decisions demand uncertainty, exchange rates, competition over the time horizon  As a result, companies define a set of operating policies that govern short-term operations. 14

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Supply Chain Operation

 Time horizon is weekly or daily  Decisions regarding individual customer orders  Supply chain configuration is fixed and operating

policies are determined  Goal is to implement the operating policies as effectively as possible  Allocate orders to inventory or production, set order due dates, generate pick lists at a warehouse, allocate an order to a particular shipment, set delivery schedules, place replenishment orders  Much less uncertainty (short time horizon) 15

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Process View of a Supply Chain  Cycle view: processes in a supply chain are divided

into a series of cycles, each performed at the interfaces between two successive supply chain stages  Push/pull view: processes in a supply chain are divided into two categories depending on whether they are executed in response to a customer order (pull) or in anticipation of a customer order (push)

16

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Cycle View of Supply Chains Customer Customer Order Cycle Retailer Replenishment Cycle

Distributor Manufacturing Cycle

Manufacturer Procurement Cycle Supplier 17

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Cycle View of a Supply Chain

 Each cycle occurs at the interface between two    



successive stages Customer order cycle (customer-retailer) Replenishment cycle (retailer-distributor) Manufacturing cycle (distributor-manufacturer) Procurement cycle (manufacturer-supplier) Cycle view clearly specifies the roles and responsibilities of each member and the desired outcome of each process.

18

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Push/Pull View of Supply Chains Procurement, Manufacturing and Replenishment cycles

Customer Order Cycle

PUSH PROCESSES

PULL PROCESSES

Customer Order Arrives 19

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Push/Pull View of Supply Chain Processes

 Supply chain processes fall into one of two categories depending 







on the timing of their execution relative to customer demand Pull: execution is initiated in response to a customer order (reactive processes). It operates in an uncertain environment (customer demand is not yet known) Push: execution is initiated in anticipation of customer orders (speculative or forecasted processes). Here customer demand is known Push/pull boundary separates push processes from pull processes. It is a firm’s choice to select the position of the push/pull boundary The relative proportion of push and pull processes can have an impact on supply chain performance 20

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Push/Pull processes for Dell (customized PCs)

Customer Order and Manufacturing Cycle

PULL PROCESSES Customer Order and Manufacturing Cycle Customer Order Arrives

Procurement Cycle

PUSH PROCESSES

21

Procurement Cycle

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The traditional view: Push-oriented Strategies

 Classical manufacturing supply chain strategy  Manufacturing forecasts are long-range 

Orders from retailers’ warehouses

 Longer response time to react to marketplace changes  

Unable to meet changing demand patterns Supply chain inventory becomes obsolete as demand for certain products disappears

 Increased variability (Bullwhip effect) leading to:    

Large inventory safety stocks Larger and more variably sized production batches Unacceptable service levels Inventory obsolescence

 Inefficient use of production facilities (factories)  

How is demand determined? Peak? Average? How is transportation capacity determined?

 Examples: Auto industry, large appliances, others? 22

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The “modern” view: Pull-oriented Strategies

 Production and distribution are demand-driven

Coordinated with true customer demand None or little inventory held  Only in response to specific orders Fast information flow mechanisms  Point-of-Sale (POS) data Decreased lead times Decreased retailer inventory Decreased variability in the supply chain and especially at manufacturers Decreased manufacturer inventory More efficient use of resources More difficult to take advantage of scale opportunities Examples: Dell, Amazon 

        

23

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

The Hybrid Solution: Push/Pull Strategies

 Hybrid of “push” and “pull” strategies to overcome disadvantages

of each  Early stages of product assembly are done in a “push” manner Partial assembly of product based on aggregate demand forecasts (which are more accurate than individual product demand forecasts) Uncertainty is reduced so safety stock inventory is lower





 Final product assembly is done based on customer demand for

specific product configurations  Supply chain timeline determines “push-pull boundary” PushPull Boundary

“Generic” Product

Raw Materials

Push Strategy

“Customized” Product

Pull Strategy

Supply Chain Timeline 24

End Consumer

Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

Achieving an Integrated Supply Chain Time

Stage One: Baseline

Customer service

Material flow Purchasing

Material Control

Sales

Production

Stage Two: Functional Integration

Customer service

25%

Material flow Materials Management

Distribution

Manufacturing Management

Distribution

MRP

Stage Three: Internal Integration

Customer service

Material flow Materials Management

Manufacturing Management

Distribution

ERP

Stage Four: External Integration

Customer service

Material flow Suppliers

Internal Supply Chain

Customers

Strategic buffer

(Source: Stevens 1989)

Supply Chain Macro Processes in a Firm Grant, L'analisi strategica per le decisioni aziendali, Il Mulino, 2011 Capitolo I. Il concetto di strategia

 Supply chain processes discussed can be classified into three

macro categories. Supplier

Firm

Supplier Relationship Management (SRM) Source Negotiate Buy Design Collaboration • Supply Collaboration • • • •

Customer

Internal Supply Chain Management (ISCM) • • • • •

Strategic Planning Demand Planning Supply Planning Fulfillment Field Service

26

Customer Relationship Management (CRM) • • • • •

Market Price Sell Call Center Order Management