CLoCS - ITB, 16 Januari 2010 Logistics Operation Overview in FMCG Industry
Nov 15, 2014
CLoCS - ITB, 16 Januari 2010
Logistics Operation Overviewin FMCG Industry
AGENDA
Market & Demand LogisticsOverview
SupplyChain
KPI Initiatives
AGENDA
Market & Demand LogisticsOverview
SupplyChain
KPI Initiatives
MARKET & DEMAND
Kalimantan 2010
% of Tota
l
•Population
•GRDP (current Rp)
•GRDP/Cap (Rp mn)
6%
8%
28.9
1.79%
11%
8.9%
Sumatra 2010
% of Total
•Population
•GRDP (current Rp)
•GRDP/Cap (Rp mn)
21%
23%
22.0
1.46%
14%
12.8%Java 2010
% of Total
•Population
•GRDP (current Rp)
•GRDP/Cap (Rp mn)
59%
60%
20.9
1.32%
14%
12.6%
CAGR (%) Bali & NT 2010
% of Total
•Population
•GRDP (current Rp)
•GRDP/Cap (Rp mn)
5%
3%
11.8
1.50%
15%
13.3%
East Indo 2010
% of Total
•Population
•GRDP (current Rp)
•GRDP/Cap (Rp mn)
2%
2%
22.2
1.62%
19%
17.3%
Sulawesi 2010
% of Total
•Population
•GRDP (current Rp)
•GRDP/Cap (Rp mn)
7%
4%
11.9
1.25%
14%
13.0%
CAGR (%)
CAGR (%)
CAGR (%)
CAGR (%)
CAGR (%)
Note: GRDP in Current Rp (including inflation 7%)Source: LPEM University of Indonesia
Demand Potential Ranking among regions 2006 – 2010based on growth, income per capita, population & distribution of income (1)
Region
• Jakarta
• Riau
• North Sumatra
• Nanggroe-Aceh D
• West Sumatra
• East Kalimantan
• West Java
• East Java
• Central Kalimantan
PopulationGDP per
capitaExpenditure per capita
Distribution of income Ranking
2
3
4
1
5
6
7
8
9
Source: LPEM University of Indonesia= Good = Not Good
MARKET & DEMAND (2)
AGENDA
Market & Demand LogisticsOverview
SupplyChain
KPI Initiatives
Supplier
Information Flow
Product Flow
SUPPLY CHAIN
LOGISTICSPRODUCTION COSTUMER
DEMANDSUPPLY(Internal company) (external company)
Reconcile?
$$$$$
SUPPLY VS DEMAND: RECONCILE?They both areThey both are
““If Sales gave meIf Sales gave mean accurate forecast,an accurate forecast,
we would providewe would provideexcellent service”excellent service”
““If Sales gave meIf Sales gave mean accurate forecast,an accurate forecast,
we would providewe would provideexcellent service”excellent service”
““I don’t know whatI don’t know whatmy customers willmy customers willwant in 3 months”want in 3 months”
““I don’t know whatI don’t know whatmy customers willmy customers willwant in 3 months”want in 3 months”
““If manufacturingIf manufacturingwere more flexible, we’llwere more flexible, we’llable to meet customerable to meet customer
requirements requirements
““If manufacturingIf manufacturingwere more flexible, we’llwere more flexible, we’llable to meet customerable to meet customer
requirements requirements
““We can only beWe can only beso flexible atso flexible at
reasonable costreasonable cost
““We can only beWe can only beso flexible atso flexible at
reasonable costreasonable cost
Manufacturing& distribution
Sales &Marketing
Who is right ?Who is right ?
Manufacturing
Manager
SalesManager
Demand Planning Marketing
Supplier
MPS
Information Flow
Product Flow
SUPPLY CHAIN
LOGISTICSPRODUCTION COSTUMER
DEMANDSUPPLY(Internal company) (external company)
Reconcile?
Demand Planning / Forecasting
Strategic Plan
Annual Plan
Business Management
Supply
Demand
Demand drivers
Demand & Supply priorities
Customer Service (External)
Deliver (Replenish)
Demonstrated capability
Supply Planning
Demand Tracking Supply Tracking
Cash collection
Demand Plan
Sell Source / Make
Demand - Supply Reconciliation
Cash-up (Turnover & Costs)
Business Decision Model
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct5
10
15
20
25
30
35
Volu
me
Demand Series Baseline
History Future
Event
Event
Innovation
Innovation
Baseline Forecast
Event Forecast
Forecast New Product
Forecast
Accurate forecast means higher turnover & lower cost
AGENDA
Market & Demand LogisticsOverview
SupplyChain
KPI Initiatives
Supplier
Information Flow
Product Flow
LOGISTICS OVERVIEW
LOGISTICSPRODUCTION COSTUMER
TYPICAL DISTRIBUTION NETWORK
COSTUMER 1
COSTUMER 2
COSTUMER 3
COSTUMER 4
COSTUMER 5
COSTUMER 6
Manufacturing Site(B)
Manufacturing Site(A)
Central Distribution Centre
DistributionCentre 1 Distribution
Centre 2
DistributionCentre 3
Inbound logistics
Outbound logist
ics
National Demand
Area Demand
National Supply
Area Supply
Area Demand
Distribution Requirement Planning Distribution Network Management How much stock to keep at every stock point
Inventory level working capital How much stock to replenish
DRP calculation Warehouse Management
Stock Priority Management Warehouse Management
Capacity planning Stock keeping methods
Racking configuration Warehouse layout
Throughput Docking capacity unloading capacity Dispatch capacity loading capacity
Stock Flow Management FIFO FEFO
Shipment / Delivery Execution Transportation Management
Transport Provider Shipment / Delivery Execution Distribution Cost Saving Contigency Route Management
INBOUND LOGISTICS
Manufacturing Site(B)
DistributionCentre 2
Central Distribution Centre
Back Of Factory
DISTRIBUTION REQUIREMENT PLANNING
DCCDC
LT = 21 daysW3W2W1W0
Forecast = 500
Safety Stock = 5000
Projected On Hand = 3000
Stock Transfer Order = 2500
STO = Forecast + SS – Proj OH
Example:
Customer Service Customer Order
Purchase Order Replenishment Order
Replenishment Model Inventory Level
Order Fulfillment Shipment / Delivery Execution Billing Process
Proof Of Delivery KPI Service Quality?
On Shelf Availability Casefill On Time
Joint Initiatives Service Improvements Efficiency Improvements
Warehouse Management Shipment / Delivery Execution
Transportation Management Transport Provider Shipment / Delivery Execution Distribution Cost Savings Contigency Route Management
OUTBOUND LOGISTICS
COSTUMER 2
DistributionCentre 1
Service Quality:• How much?•Is it On time?
•In Good Shape?•Easy to Unload?
Delivery
PURCHASE ORDER & DELIVERY
Send PO
Customer/Store
Principal
ERP
Order EntryPO Checking:• SKU/Description• Barcode• Price• Qty• Total PO
Expedition Report
PO Electronic
Synchronization
Order Processor
WHS
Send Expedition Report
DELIVERY
PO Manual
Load Planning
PickingAssembling &
Loading
Data interface:• SKU/Desc•-Barcode• Price•Total PO• Completeness
Allocation
Delivery Monitoring / Daily Monitoring :• Est. Arrived• Delivery Qty• Fulfilment•Total PO
Order Validation
REPLENISHMENT ORDER
Replenishment Order = Stock Norm – Stock On Hand – Stock IT
*Inventory model manages STOCK NORM level
REPLENISHMENT ORDER & DELIVERY
PRINCIPAL
Product Flow
In-tra
nsit S
tockFACTORY
Supply
ULI WHS
CUSTOMER
ERP System
MARKET
Shipment
Order
Order
Daily Sales & Stock
• Generate Order• Parameter Setup• Database
Information Flow
Intransit Data
KPI: Service Quality
Custome
Product
Sourcing Whs
Sch. Date & Req. Date
Etc.
AGENDA
Market & Demand LogisticsOverview
SupplyChain
KPI Initiatives
KEY PERFORMANCE INDICATOR
COSTUMER
DistributionCentre
Arrival:•Is it On Time?
•Qty as ordered?•In Good Shape?•Easy to unload?
•Return?
Delivery
The ability to deliver goods as customer ordered = SERVICE
Delivery:•Lead Time as
Planned?•Broken Product?
•Theft?
Delivery:•Stock available as ordered?
•Dispatched On Time?•Problem while stock picking?
•Transportation available?•Any order revision?
Major KPIs:1. Service Quality
2. Cost
MEASUREMENT
CCFOT(%) provides the Loss tree framework for capturingCCFOT(%) provides the Loss tree framework for capturing ServiceService, , EfficiencyEfficiency andand On-time On-time Losses togetherLosses together
Internal CompanyInternal Company reporting isreporting is consistentconsistent – CCFOT– CCFOT Reducing CCFOT lossReducing CCFOT loss areas would driveareas would drive improvement of improvement of
Customer Service KPIsCustomer Service KPIs
CCFOT = Qty Delivered On Time
Customer Order
*Figures are not actual data
0.30% 0.30%4.30%
17.40%
31.70%
46.10%
Stock Availability
Warehousing & Transport
Not AssignedCustomer Related
Commercial Issues
Order Management
Example Of CCFOT Loss:
AGENDA
Market & Demand LogisticsOverview
SupplyChain
KPI Initiatives
Logistics is aboutCooperation
(Us…NOT you & i)
INITIATIVES
Service Improvement Electronic Data Interchange Advance Shipment Notification Integrated Promotion Activity Planning CPFR VMI On Shelf Availability
Efficiency Night Delivery – Holiday Delivery Palletized Delivery Distribution Bypass Backhauling Retailer Centralized Delivery Logistic Discount Agreement
INITIATIVES