! BA 244: Supply Chain Management
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
!!BA#244:#Supply#Chain#Management#
Zara#
! Ver%cal!integra%on!
! Interna%onal!Opera%ons!
! Delayed!Differen%a%on!
! Strategic!Management!
Reminders#
! Article 1 - Joint supply chain risk management: An agency and collaboration perspective
! LinkedIn Group: Presentation Grade for Nike and Zara
Internal#Supply#Chain#
Procurement! Produc%on! Storage! Distribu%on! Sales!and!Marke%ng!
Choice#of#Transport#of#Goods#
! Mode!of!Transport!! Road!haulage!! Rail,!Air,!and!Sea!Freight!! Inland!waterways!(canals)!! Express!operators!or!couriers!(e.g.!DHL,!Fedex,!UPS)!! Pipeline!(e.g.!specialist!industries!like!oil!and!gas)!
Factors#to#Consider#
! Points!of!departure!and!des%na%on!! limited!op%ons!may!be!available!(e.g.!sea!freight!in!a!
landNlocked!country)!
! Length!of!the!journey!! in!distance!and!%me!(%me,!risk,!cost)!! Frequency!and!flexibility!of!departures!
! Nature!of!the!goods!! SwiS!or!special!transport!(e.g.!perishable,!
dangerous,!or!fragile)!
Factors#to#Consider#
! Size!and!weight!of!goods!! May!rule!out!certain!modes!of!transport!(e.g.!road!
haulage)!
! Buyer’s!goods!inward!facility!! Whether!it!has!space!and!equipment!to!receive!and!
unload!certain!types!of!transport!
! Compa%bility!and!rela%onship!of!a!hauler!or!logis%cs!provider!! Crea%ng!trust!! Poten%al!for!collabora%ve!efficiency!improvements!
Intermodal#Transport#
! Intermodal!(between!modes)!or!mul%modal!(many!modes)!
! All!without!the!need!to!handle!the!goods!themselves!when!changing!modes!
Example#
Intermodal#Transport#
! Specialist!companies!and!shipping!lines!act!as!combined!transport!operator!
! Minimal!handling,!minimal!poten%al!for!damage,!minimal!space!inefficiency!
! Standardized!road!or!rail!containers!that!can!also!be!carried!by!air!or!ship!
! Specialist!documenta%on!(allowing!for!mul%ple!modes!of!transport)!and!handling!equipment!
Containers#
! LCL!–!Less!than!Container!Load!! FCL!–!Full!Container!Load!! TEU!–!Twenty!feet!equivalent!unit!–!20’!container!–!21,670!kg!! FEU!–!Forty!feet!equivalent!unit!–!40’!container!–!26,480!kg!
Traditional / Open Loop / Forward Supply Chain#
! "system!whose!cons%tuent!parts!include!material!suppliers,!produc%on!facili%es,!distribu%on!services!and!customers!linked!together!by!the!feed!forward!flow!of!materials!and!feedback!flow!of!informa%on"!(Stevens,!1989)!
! there!is!no!flow!back!from!the!customer!
Traditional SC Decisions#
! Strategic!! LongNterm!planning!! e.g.!number,!loca%on,!and!capaci%es!of!distribu%on!
centers!(DC)!and!warehouses!
! Tac%cal!! Shorter!planning!horizon;!revised!monthly!or!quarterly!! e.g.!selec%on!of!suppliers,!assigning!products!to!DC!
! Opera%onal!! Modified!daily!or!weekly!! e.g.!scheduling,!dayNtoNday!flow!of!products!through!the!
network,!!amount!of!inventory!in!DC!
Traditional SC Design#
! Network!op%miza%on!! Design!the!least!cost!network!with!focus!on!
customer!demand!
! Network!simula%on!! Test!alterna%ve!models!to!predict!SC!behavior!
! Design!for!robustness!! An%cipate!unforeseen!circumstances!and!
possibili%es!
Traditional SC Performance Monitoring#
! How!to!monitor!performance?!
! Metrics!that!can!measure!the!effec%veness!and!efficiency!of!an!open!loop!SC:!fill!rate,!lead!%me,!onN%me!performance,!responsiveness!! Fill!rate:!frac%on!of!customer!demand!that!is!met!
through!immediate!stock!availability!(vs.!backorders!or!lost!sales)!
Traditional SC Performance Monitoring#
! Quan%ta%ve!performance!measures:!measures!directly!associated!with!cost!or!profit,!such!as!cost!minimiza%on,!sales!maximiza%on,!profit!maximiza%on,!inventory!investment!minimiza%on,!return!on!investment!maximiza%on!
! Objec%ve!measures!that!are!based!on!some!measure!of!customer!responsiveness:!customer!response!%me!minimiza%on!
Traditional SC Disadvantages#
! There!is!a!lack!of!accurate!measurement!of!the!efficiency!of!open!loop!supply!chains!!
! Compared!to!the!closedNloop!supply!chain!systems,!open!loop!supply!chains!include!limita%ons!regarding!the!environmental!effects!and!regula%on!
Reverse Supply Chain / Reverse Logistics#
! Stands!for!all!opera%ons!related!to!the!reuse!of!products!and!materials!
! Incorporates!planning,!implemen%ng!and!controlling!the!efficient!costNeffec%ve!flow!of!raw!materials,!inNprocess!inventory,!finished!goods!and!related!informa%on!from!the!point!of!consump%on!to!the!point!of!origin,!for!the!purpose!of!recapturing!value!or!proper!disposal!!
In#the#1990s…#
! OSen!associated!with!a!high!degree!of!uncertainty,!descending!value,!mul%Npartner!collabora%ve!requirements,!decentralized!loca%ons!and!the!high!cost!of!reprocessing!equipment!
! Discouraged!companies!from!considering!reverse!models!
Over#the#last#decade…#
! Demonstrated!increasingly!posi%ve!outcomes!! financial!benefits!(profit!saving)!! higher!customer!service!sa%sfac%on!! environmental!benefits!! various!taxNrelated!and!legisla%on!benefits!! beier!coordina%on!of!the!company's!SC!through!
improved!coordina%on!of!the!forward!and!return!SC!processes!
Over#the#last#decade…#
! allows!the!company!to!retain!contact!with!customers!and!derive!valuable!feedback!from!them!
! e.g.!prior!to!the!development!of!the!remanufacturing!facili%es,!valuable!components!would!be!considered!waste!even!with!minor!defects!
Reverse SC: 2 Basic Processes
1. Removing!new!or!used!products!from!their!ini%al!point!in!the!supply!chain!! returns!from!consumers!! overstocked!inventory!! outdated!merchandise!
2. Redistribu%ng!these!products!using!disposi%on!management!rules!that!will!result!in!maximized!value!at!the!end!of!the!item's!original!useful!life!
Options#
! Enable!the!most!economically!airac%ve!op%ons!! Direct!Reuse!! Repair!! Remanufacture:!Returning!the!product!to!original!
specifica%ons!! Recycle!! Disposal!
Reverse SC: 4 Steps to Successful Implementation#
1. Retrieve!the!product!! Quality!and!quan%ty!of!the!products!retrieved!must!be!
coordinated!with!other!distributors!and!customers!
2. Transport!the!product!! Should!be!efficiently!transported!to!a!central!loca%on!to!
be!inspected!and!sorted!! Determine!the!product’s!condi%on!and!the!most!
economical!reuse!op%on!! Determine!what!products!can!be!saved,!reworked,!
remanufactured,!resold!or!disposed!
Reverse SC: 4 Steps to Successful Implementation#
3. Recondi%on!the!appropriate!products!! Design!for!disassembly!(DFD)!is!a!method!of!designing!
products!(e.g.!electrical!devices)!so!they!can!be!easily!pulled!apart,!recondi%oned!and!reused!
! Products!that!are!not!recondi%oned!should!be!recycled,!resold!for!parts,!or!disposed!of!!
4. Distribute!and!sell!the!recondi%oned!products!! Companies!should!create!a!market!for!their!refurbished!
products!which!can!be!sold!to!the!general!public!at!cost!or!discounted!price!
Other Key Considerations#
! Companies!need!to!track!or!record!%me!metrics!in!their!returns!process!
! It!is!advisable!to!spend!some!%me!designing!the!right!reverse!supply!chain!model!–!can!be!designed!for!cost!efficiency!or!for!a!quick!response!
! Awareness!that!a!customerNcentric!approach!will!add!value!is!important!
Advantages#
! Reverse!supply!chain!models!can!help!companies!increase!realN%me!visibility!
! Reverse!supply!chains!lead!to!substan%al!environmental!benefits!which!are!mostly!related!to!the!process!of!recycling!and!reusing!
! Reverse!logis%cs!can!help!companies!comply!with!legisla%on,!as!it!helps!to!eliminate!and!diminish!waste!
Disadvantages#
! It!is!very!hard!or!even!impossible!to!forecast!and!plan!product!and!material!return!
! Reverse!logis%cs!is!really!perceived!as!a!cost!driver!and!is!considered!to!be!making!an!insignificant!impact!on!profit!margins!(Verweij!et!al.,!2008)!
! Reverse!logis%cs!can!be!a!%meNconsuming!process!
Case#Evidence#
! Volvo!! Swedish!car!manufacturer!! An%cipated!the!Swedish!government!passing!a!
resolu%on!holding!auto!manufacturers!accountable!for!the!disposal!of!vehicles!
! Quickly!implemented!a!reverse!logis%cs!process!of!salvaging!and!dismantling!cars,!genera%ng!revenues!by!selling!the!used!metal,!plas%cs,!and!car!parts!
! Resulted!in!a!reduc%on!of!transac%on!costs!to!approximately!5%!(Stock!et!al.,!2002)!
Case#Evidence#
! Levi!Strauss!! In!conjunc%on!with!Genco,!a!third!party!reverse!
logis%cs!service!provider!! Developed!a!returnsNprocessing!method!that!
computed!es%mated!costs,!generated!paperwork!in!advance!of!the!product!being!returned,!and!automa%cally!matched!the!items!with!the!prepared!paperwork!
! Reduced!processing!items!to!only!72!hours!(Stock,!2007)!
Case#Evidence#
! Heineken!! uses!a!reverse!logis%cs!supply!system!which!includes!
returnable!packaging!material!(RPM),!such!as!glass!boiles,!crates,!and!kegs!
! Total!returnable!value!of!RPM!for!Heineken!Europe!is!es%mated!at!€550m.!The!inventory!of!crates!in!one!par%cular!brewery!is!es%mated!at!3,57m!units,!each!of!these!having!a!unit!cost!of!€3.50!
! In!most!cases,!return!percentages!on!crates!are!very!high!and!close!to!100%!(CarrascoNCallego!et!al.,!2009)!
Closed-Loop Supply Chain (CLSC)#
! Generally!incorporates!ac%vi%es!observed!in!both!the!tradi%onal!forward!supply!chain!and!in!the!reverse!supply!chain!
! Has!recently!gained!popularity!due!to!the!%ghtening!of!environmental!regula%ons,!increasing!product!returns!and!the!iden%fica%on!of!new!business!opportuni%es!related!to!the!residual!value!of!endNof!life!products!
Legislation#
! EU!Waste!Electrical!and!Electronic!Equipment!(WEEE)!Direc%ve!that!came!into!force!in!2007!requires!Bri%sh!producers!and!importers!of!electronic!goods!to!recycle!their!products!
! Similar!legisla%on!has!also!been!introduced!in!Canada,!Japan,!China!and!a!number!of!states!in!the!US!
! Automo%ve!direc%ves!that!require!manufacturers!and!importers!of!cars!and!electronics!to!offer!takeNback!solu%ons!for!endNofNlife!products!
CLSC#
Case#Studies#
! Xerox!Corpora%on!! provided!prepaid!mailboxes!to!make!it!easier!for!
customers!to!return!used!copy/print!cartridges!to!Xerox!without!incurring!any!costs!
! The!company!also!collects!cartridges!as!new!ones!are!installed!
! Overall,!the!green!remanufacturing!program!saved!the!company!between!40%!and!65%!in!manufacturing!costs!through!the!reuse!of!parts!and!materials!(Ginsburg,!2001;!Guide!et!al,!2003)!!
!!End#
Related Documents
