Supply chain process in the UN

State University Of New York

Supply chain class

Fall 2010Instructor :Dr.Larry

HowardBy :Kaoutar Dribki

Supply Chain Process in The UN

Objectives

• Review the supply chain planning process maps in detail.

• Develop the SNP ,Demand Planning and the LTCP

• Summary about The SCM in The UN

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• General Supply• Rations• Fuel

• Digital cameras, military aids..

Main Commodity areas in support of the field mission

1.Sourcing Strategic Deployment Stocks UN Reserve Systems Contracts Inter-mission Transfers Member States

2.Warehouse Operations

3. Distribution

Supply Chain – General Supply Commodities

• Current Contracts: 13 Missions Supported strength: 98,000

• 3 International contractors• Yearly Expenditure: $ 380,000,000 • Cost per person / day: $ 11.00 inclusive food &

logistics cost

Global view of Peacekeeping operations

Food Quality and safetyIntegration in rations operations –

recipe card based menu plans, aligning catering processes to prevent waste

Standardizing operations and controls

Focus of operations

Main Tank

TRANSPARANCY & REAL TIME INFORMATION

Refinery

End Users

LOG Base

ShipShip

Tank Farm

Terminal

Sector

SFR

LR

Team SitesSHQMain StorageMain Source

• Supply Chain – Fuel

Transportation

COE/UNOE

•

Beyond the linear supply chain

Supplier

Location Plant and storage locations

Logistics Process Model

Supplier Plant

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Planning integrates the Supply Chain function

Master Data Management

Management Reporting

Fin

anci

al A

ccou

nti

ng

Pro

ject

Man

agem

ent

Source to Acquire Plan and Manage

Receive to Distribute Employ to Dispose

Long-Term Planning

Demand PlanningSupply Network

Planning

Contract Management

Requisition to Purchase Order

Low – Value Acquisitions

Supplier Collaboration

Inbound Processing

Planning and Dispatching

OutboundWarehouse and

StorageEquipment

Assignment

Set Assembly and Execution

Equipment Maintenance and

Operations

Decommission and Disposal

Force Planning

Force Deployment

Four primary process areas(Level One)

Secondary process areas to encompass

SCPL activities

(Level Two)

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Years 3 to 10Years 0 to 2Years -3 to 0 Monthly Consumption

history gathered at the material, location, project and requested delivery date

Monthly commercial sales for stamps, publications, etc.

Ability to gather and record external data feeds, syndicate data, reliability data, etc. for Long-term Planning

Monthly Consensus demand calculated at the material, location, project and requested delivery date

New material introductions, phase-in, and phase-out

Addition of demand events

Time-phased Supply Plan with Inventory, Procurement, Production, Movement Recommendations

Quarterly Long-term demand calculated at the material category, location / region, project and requested delivery date (aggregated plan)

New material category introductions, phase-in, and phase-out

New project introductions, phase-in, and phase-out

Addition of demand / supply events

Time-phased Supply Plan with Inventory, Procurement, Production, Movement

Operational Cost Scenarios based on material category average cost

Operational Supply Chain Planning Process: Monthly Rolling

Long-term Planning Process: Annual Simulations

History Current Future

Example of Umoja Planning horizons

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Generate Safety Stock Levels (SNP)

Demand Planning (DP)

Replenishment Planning (SNP)

Deployment Planning (SNP)

Transportation Planning (TM)

Planning horizon

Unconstrained Demand

Constrained Demand (netted)

Consensus Demand

Days of Supply / Safety Stock

Purchase Requisitions, Planned Orders, Stock Transport Requisitions

Stock Transport Requisitions (Movement Planning)

Monthly / Operational

Monthly / Strategic / Operational

Monthly / Operational

Weekly / Tactical

Daily / Tactical

Consolidated Shipments

Demand Fulfillment (DF)Demand Execution (Allocations and Available to Promise

Daily / Tactical

Available to Promise (prioritized to need)

Migration to Plan-driven Procurement

Supply Chain Planning functionality sequence

SUPPLY CHAIN INTEGRATION

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Demand Planning

SupplyNetworkPlanning

Deployment Planning

Demand Planning• More than just forecasting, we will be incorporating information on new/old materials, events as well as

information from past trends

• Develop a ‘Demand Plan’ that is unconstrained by our ability to supply

• Consensus based process with inputs from Requisitioning, Projects, Finance, LogOps

Supply Planning Use a combination of Reservations and the unconstrained Demand Plan to develop supply plans,

deployment plans and planned production from our suppliers

Share plans with suppliers where feasible to enable collaboration/Evaluate supplier capacities and lead-times to constrain the plan

Deployment Planning Plans the movements between locations &Optimizes the loads and modes of transportation

Demand & Supply Planning

Long-term CapabilitiesDemand Plan

Operational Demand Plan

Tactical Demand Plan

Long 3-XX years

Medium 6-18 months

Short1-6 months

Example: Strategic Plan

Example: Supply PlanAnnual / Bi-annual BudgetProject Plan

How far ahead should we forecast?

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Example: Rapid Replenishment

A - Demand Planning and Forecasting

• 1 - Gather and Clean Data Elements

• 2 - Plan Lifecycle Management(green Supply Chain)

• 3 - Generate Statistical Forecasting

• 4 - Agree on Consensus Demand Plan

• 5 - Infrequent Demand Model

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The mission Solution – Generate Statistical Forecast

Materials with repeatable demand pattern will be forecasted using this process

Forecasting is performed at pre-defined levels of aggregation such as plant, regional level, UN-HQ, material, material category, etc.

Statistical models will be applied to historical consumption patterns to identify trends, seasonality and causal factors to project future

demand

Alerts help with exception based management of issues related to data or forecast model or level of aggregation

Ability to evaluate best forecast model that fits history based on commonly used statistical measures

Accuracy of forecast can be calculated and monitored while calculating estimates of future demand

Ability to provide manual corrections or updates to forecasts calculated by the system

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B - Supply Network Planning

• Safety Stock Planning

• Replenishment Planning

• Plan Deployment

What is Supply Network Planning ?

• A planning approach to create Operational and Tactical Plans and Sourcing Decisions that takes the complete supply network into consideration

Rough-Cut CapacityPlanning (MPS)

Supply Network Planning

Meet Consensus Demand and Actual Demand (Requisitions and Internal Orders by:

Optimal use of Manufacturing, Distribution and Transportation Resources Consider all constraints in the supply chain

Deployment

Safety StockPlanning

Replenishment Planning (DRP)

Overview of Supply Network Planning

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Planning Paradigm Quantity based, cross-location finite planning Leverage Supplier contracts Vendor Managed Inventory Create Purchase Requisitions,

Stock transfer between inventory locations

Matches demand and supply for sourcing

Generates Safety Stock Plan Generates deployment plan

Feasible, Executable Supply constrained Distribution plans

Supply Chain Network

Products / Services

Forecasts

Supply Sources

Business Rules

Supply Network Planning (SNP)

Supply Network Planning (SNP) ensures the optimal Use of Procurement, Manufacturing, Distribution, and Transportation Resources to meet Forecasts and actual Demand while considering all Constraints in the Supply Chain

Supply Network Planning plans Procurement, Movements and Manufacturing throughout the entire Supply Network using Optimizing and Heuristic Approaches

Supply Network Planning Overview

Supply Network Planning (SNP) ensures the optimal Use of Procurement, Manufacturing, Distribution, and Transportation Resources to meet Forecasts and actual Demand while considering all Constraints in the Supply Chain

Supply Network Planning offers three competitive Algorithms: SNP Heuristics, Capable to Match (CTM) and SNP Optimizer

Overview of Supply Network Planning

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Planning Paradigm Quantity based, cross-location finite planning Leverage Supplier contracts Vendor Managed Inventory Create Purchase Requisitions,

Stock transfer between inventory locations

Matches demand and supply for sourcing

Generates Safety Stock Plan Generates deployment plan

Feasible, Executable Supply constrained Distribution plans

Supply Chain Network

Products

Forecasts

Supply Sources

Business Rules

Supply Network Planning (SNP)

Safety Stock Planning

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Safety stock Planning provides a buffer for variations in actual demand from forecasts and variations in actual supplier lead time from expected or contracted lead time (agreed in the contract)

Safety Stock Planning enables automated replenishment of stock when safety stock values deviates from specified levels primarily due to consumption

The frequency of safety stock calculation is linked with the material classification based on criticality of material

Features: Cost effective management of inventory to meet required service levels Intelligently manage safety stock to decrease inventory carrying cost Automated controls support detection of excess safety stock

Example of Mission Solution – Safety Stock Planning

• Inventory Planner reviews forecast from the demand planning process, reviews supplier lead time and material classification and identifies materials that are at risk due to variations in supply and demand

• Experience of Inventory Planner is leveraged in specifying the safety stock value for a material-location combination at critical locations in the UN supply chain.

• Automated replenishment of stock when safety stock values deviates from specified levels primarily due to consumption

• Safety Stock values and methods are published in Material Master

• Supply Planner validates the safety stock values

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Long term capabilities planning

Long Term Capability Planning

Gather Aggregate Data

Generate Long Term Demand Plan

Generate Long Term Supply Plan

Publish Long Term Capabilities Plan

Manage Performance

Manage Fleet Equipment

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Generate Long Term Demand Plan

• Establishes long term planning horizons - typically forward looking 3-10 years

• Integrates review of program inputs, operational demand plans including events and fleet planning

• Generates an initial long term demand plan and reviews for scenarios

• Creates scenarios as required• Publishes an agreed long term demand plan

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Generate Long Term Supply Plan

• Establishes long term planning horizons for the supply side activities

• Reviews the supply chain network • Reviews material classification and criticality• Reviews safety stock policies• Integrates review of production capabilities• Integrates review of strategic sourcing

capabilities• Generates an initial long term supply plan and

determines the scenarios required• Publishes a long term supply plan 26

Manage Performance

• Gathers performance data from published long term capabilities plans

• Monitors the performance against physical data such as resource availability, utilization and related resource performance metrics.

• Identifies and determines if thresholds for planning have been met

• Identifies root causes where thresholds have not been met

• Develops alternative corrective actions

• Documents corrective actions

• When thresholds have been met identifies continuous improvement actions for purposes of improved long term supply and demand planning. 27

Manage Fleet Equipment

• Identifies fleet categories from master data definitions

• Creates fleet specific data• Defines fleet measurement in terms of defined

metrics• Enables gathering of fleet consumption from

automated dispatch and event capture• Provides input to Equipment Planners for fleet

consumption data• Conducts fleet performance analysis in terms of

wide ranging metrics such as utilization and availability for use in long term demand planning.28

Summary

In sum, peacekeeping

operations tend to be characterized by slower yet longer deployments, implying the need for

leaner supply chains.

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Thank you