scm 12 SUPPLY CHAIN NETWORK ANALYSIS AND DESIGN
Terms in this set (28)
Network Redesign Elements
Considering the rate at which change is occurring, it is questionable whether any existing logistics/supply chain network could actually ever be fully up to date.
Customer Service Requirements
While one customer segment demands more efficient, low-cost logistics services, another is seeking partnerships that can redefine their logistical capabilities and performance.
New market segments or distribution channel opportunities (e.g., baking soda; wholesalers) will extensively affect lead times, order sizes and frequencies, and shipping activities.
Customer and/or Supply Markets
positioned between supply and customer markets, changes in these markets should prompt reevaluating the logistics network.
Demand Side Example
When the U.S. population shifted to the southeast and the southwest, new warehouses and DC facilities followed the changing geo-locational trends
Supply Side Example
The service and cost requirements of auto industry's movement to JIT-based manufacturing forced firms to examine the locations of logistics facilities
firm to experience an ownership-related change that is associated with a merger, acquisition, or divestiture
identify new and innovative ways to eliminate unnecessary costs from their business processes, including logistics costs
maintain or develop a competitive advantage in a marketplace, companies should periodically examine facility locations contributions to service and/or costs
Many firms locate distribution facilities near the hub operations of express transportation providers (e.g., UPS) so they may offer highly responsive service
Major Locational Determinants
The importance of locational determinants varies among industries as well as companies within specific industries
Cost and availability of labor
Degree of unionization
Skill level and work ethic
Cooperativeness of public officials
Rate of unemployment
Other potential labor-management issues
Quality of Life
is difficult to quantify, but it affects the well-being of employees and quality of work they are expected to perform.
Particularly important to companies that must attract and retain a talented/specialized, mobile workforce
Aside from the other factors, a company or its CEO, may prefer (i.e., decision override) a certain region/ local area for the location of a logistics facility.
Locate facilities where competitors have presence.
Locate facilities where similar firms have presence.
phenomenon that explains why firms tend to co-locate facilities - to gain common access with other firms (i.e., skilled labor; proximity to key supplier).
availability and cost of raw materials and component parts, as well as the cost of transporting these materials to the proposed plant site, are of great significance
Proximity to Markets/Customers
Logistics variables include availability of transportation, freight cost, and the geographical market size that can be served (e.g., same-day or next-morning basis).
complex logistics/SC network can be disadvantageous from a cost perspective. High quality transportation and capable IT has expanded market areas
Supplier Park Benefits
Reduced travel time and costs from the supplier to customer, increased flexibility and quicker response to customer preferences, and eliminating packaging costs and risks of product damage associated with long-distance hauling
Transportation and Infrastructure
high-quality, capable transportation services, this has much influence on location decisions
Local rail access
Major airport facility
Inland or ocean ports
Taxes and Development Incentives
advance knowledge of taxes that apply to businesses and individuals as well as availability of industrial development incentives
Prevailing business-related taxes
including revenue or income taxes, inventory taxes, and property taxes, will have a major impact on the cost to operate a business.
Industrial developmental incentives
used by many states and communities to entice manufacturing plants, headquarters, and other facilities to locate in their area.
Land Costs and Utilities
issues relating to the cost of land and the availability of needed utilities are more or less critical.
(e.g., cost of land, available acreage, cost of construction, and local building codes)
3. Analyzing Logistics Systems
focus is not on individual variables, but rather on how they interact as a whole (i.e., system not individual parts).
Heavy Inbound (Automotive)
Inbound requires detailed scheduling, coordination, and planning to make sure the parts arrive when needed (varied lead times). Outbound requires no warehousing and less complex preparations
Heavy Outbound (Chemical):
Inbound requires few raw materials from limited sources, high volumes over short distances. Outbound requires specialized transportation, package, and storage for industrial and consumer goods.
Trade-offs can be analyzed to determine the overall lowest-cost or highest-service logistics system when examining the logistics activities (e.g., transportation, warehousing, inventory, packaging) as cost centers.
Nodes Versus Links
Allows for analyzing a logistics system with regards to the two basic elements (nodes and links), which is convenient for identifying system improvements.
more complex and organizations become members of more than one SC, channel inefficiencies/duplications often arise