TU-C2020 OPERATIONS MANAGEMENT (5 cr) Outbound Logistics and Channel Management 14 Oct, 2016

Transcription

1 TU-C2020 OPERATIONS MANAGEMENT (5 cr) Outbound Logistics and Channel Management 14 Oct, 2016 Doctoral candidate, researcher Jari Laine Department of Industrial Engineering and Management

2 A Fast Moving Consumer Goods Supply Chain and its information flows Demand and Supply information Flow Money Flow Goods Flow 2

3 OPP and Operational Choices OPP, order penetration point implies how deep into production the customer is visible. It shows where the customer order is attached into material flow. Engineering Purchasing Manufacturing Assembly FGI Make to stock (Ship to order) Assemble to order (ATO) / Build to order (BTO) Make to order (MTO) Engineer to order (ETO) / Purchase (buy) to order Variants: Pack-to-order, Configure-to-Order, Build-to-Forecast... Picture Source: Marja Blomqvist 10/14/2016 3

4 Use of OPP in strategic inventory planning 10/14/2016 4

5 The impact of different operational choices Suppliers and subcontractors Factory/Manufacturing Center Outbound Warehouse/Distribution Center. Make to stock Ship to Order Assemble to order (ATO) / Build to order (BTO) Make to order (MTO) Configure to order Engineer to order (ETO) / Purchase (buy) to order Demand visibility info 5

6 Operational Choises vs. Distribution Channel Management 1. Fast Moving Consumer Goods 2. Durable Consumer Goods 3. Investment Goods 4. Process Industry 5. Construction & Infrastucture Business 6

7 1. Fast Moving Consumers Goods, e.g. Crocery Channel Management Priorities in Channel Management Availability (no empty shelves) Efficiency (cost of warehousing, transportation, capital, handling) Speed & Flexibility to react to changes Minimization of waste and loss (perishability!) Recycling (e.g. packaging material) Environment (CO2 emissions) 7

8 Example, groceries, traditional Operational Choice: STO Producer Factories Distribution/ Cross-Docking Centers Mass-Merchandisers, retailers, specialist shops Consumers Warehouse/ Distribution Center Planning, Forecasting & Replenishment Info 8

9 Cross Docking Source , 9

10 Collaborative Planning, Forecasting and Replenishment 10

11 Automated tracking & transaction management, e.g. RFID & GPS 11

12 CPFR 12

13 Alternative Crocery Channel, how does it differ? 13

14 Omni Channel Retail Virtual Showrooms Brick & Mortar Enablers E-tailers 14

15 Emerging Omni Channel Management Retailers used to rely on barriers such as geography and customer ignorance to advance their positions in traditional markets. However, technology removes those barriers BRYNJOLFSSON, Erik; HU, Yu Jeffrey; RAHMAN, Mohammad S. Competing in the age of omnichannel retailing. MIT Sloan Management Review, 2013, 54.4:

16 Drop Shipments Order Order 16

17 Drop Shipments Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. As in retail businesses, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer. 17

18 Challenges of Drop Shipment Sharing and assuring accurate (real time) availability information from multiple locations Managing consolidation of shipment Timing Packing Cost of logistics Providing tracking info Managing returns and reverse logistics ->Sharing of margins and costs 18

19 2. Durable Consumers Goods, e.g. electronics Priorities in Channel Management Availability (no empty shelves) Efficiency (cost of warehousing, transportation, capital, handling) Speed & Felxibility to react to changes Minimization of waste and loss, controlled conditions and traceability (perishability, quality!) Recycling (e.g. packaging material), re-use, take back of electronics Environment (CO2 emissions) 19

20 Durable Consumer Goods Operational Choice STO, CTO Producer Factories Distribution/ Cross-Docking Centers Mass-Merchandisers, retailers, specialist shops Consumers, small businesses Warehouse/ Configuration Center Planning, Forecasting & Replenishment Info 20

21 Configure To Order Ability to fast configure a large number customized product variants out of a limited number of interoperable and standardized options. Related to mass-customization and postponement. Reduces efficiently working capital while still enabling fast delivery of customized products Modular Design! 21

22 3. Investment Goods, B2C, B2B Priorities in Channel Management Reliable delivery & service Adaptability to customer requirements (customization) Levelled capacity and resource loading (cost, quality) Life Cycle Cost & opportunities Sustainability 22

23 3. Investment Goods, B2C, B2B Operational Choice CTO, ATO, MTO Producer Factories Importers, distributors Dealers, B2B retailers, specialist stores, businesses Consumers, Businesses Planning and Forecasting & Order Info Order Info 23

24 4. Process Industry, B2C, B2B Priorities in Channel Management Reliable delivery & service Levelled capacity and resource loading (cost, quality) Safety & Sustainability Opportunity hunting (SPOT market) 24

25 Process Industry, example oil industry Operational Choice: STO, Mix-to-Order Producer Factories Importers, distributors Dealers, SPOT market, specialist stores, B2B Consumers, Businesses Planning, Forecasting & Replenishment/Order Info 25

26 4. Construction and Infrastucture Priorities in Channel Management (implementation phase) Project Management Network Management Planning & Scheduling Coordination of external resources Timing of main activities Timing and routing of goods deliveries (time slots at site, consolidation hubs) 3PL management TIMING & EXCEPTION management 26

27 5. Construction and Infrastructure Operational Choice: ETO, implementation phase = Project Delivery Project Office Consolidation Hubs, transport Construction Site Project status info, change requests, materials scheduling Sub-contractors 27

28 Thank you 28