Network Design in the Supply Chain. PowerPoint presentation to accompany Chopra and Meindl Supply Chain Management, 6e

Transcription

1 5 Network Desig i the Supply Chai PowerPoit presetatio to accompay Chopra ad Meidl Supply Chai Maagemet, 6e Copyright 2016 Pearso Educatio, Ic. 5 1

2 Learig Objectives 1. Uderstad the role of etwork desig i a supply chai. 2. Idetify factors ifluecig supply chai etwork desig decisios. 3. Develop a framework for makig etwork desig decisios. 4. Use optimizatio for facility locatio ad capacity allocatio decisios. Copyright 2016 Pearso Educatio, Ic. 5 2

3 The Role of Network Desig Facility role What role, what processes? Facility locatio Where should facilities be located? Capacity allocatio How much capacity at each facility? Market ad supply allocatio What markets? Which supply sources? Copyright 2016 Pearso Educatio, Ic. 5 3

4 The Role of Network Desig Revisit desig decisios after market chages, mergers, or factor cost chages Copyright 2016 Pearso Educatio, Ic. 5 4

5 Factors Ifluecig Network Desig Decisios Strategic factors Techological factors Macroecoomic factors Tariffs ad tax icetives Exchage-rate ad demad risk Freight ad fuel costs Political Copyright 2016 Pearso Educatio, Ic. 5 5

6 Factors Ifluecig Network Desig Decisios Ifrastructure factors Competitive factors Positive exteralities betwee firms Locatig to split the market Customer respose time ad local presece Logistics ad facility costs Copyright 2016 Pearso Educatio, Ic. 5 6

7 Competitive Factors Positive exteralities betwee firms Collocatio beefits all FIGURE 5-1 Locatig to split the market Locate to capture largest market share d 1 = a+ 1 b a 2 ad d 2 = 1+ b a 2 Copyright 2016 Pearso Educatio, Ic. 5 7

8 Framework for Network Desig Decisios Phase I: Defie a Supply Chai Strategy/Desig Clear defiitio of the firm s competitive strategy Forecast the likely evolutio of global competitio Idetify costraits o available capital Determie broad supply strategy Copyright 2016 Pearso Educatio, Ic. 5 8

9 Framework for Network Desig Decisios FIGURE 5-2 Copyright 2016 Pearso Educatio, Ic. 5 9

10 Framework for Network Desig Decisios Phase II: Defie the Regioal Facility Cofiguratio Forecast of the demad by coutry or regio Ecoomies of scale or scope Idetify demad risk, exchage-rate risk, political risk, tariffs, requiremets for local productio, tax icetives, ad export or import restrictios Idetify competitors Copyright 2016 Pearso Educatio, Ic. 5 10

11 Framework for Network Desig Decisios Phase III: Select a Set of Desirable Potetial Sites Hard ifrastructure requiremets Soft ifrastructure requiremets Phase IV: Locatio Choices Copyright 2016 Pearso Educatio, Ic. 5 11

12 Models for Facility Locatio ad Capacity Allocatio Maximize the overall profitability of the supply chai etwork while providig customers with the appropriate resposiveess May trade-offs durig etwork desig Network desig models used to decide o locatios ad capacities to assig curret demad to facilities ad idetify trasportatio laes Copyright 2016 Pearso Educatio, Ic. 5 12

13 Models for Facility Locatio ad Capacity Allocatio Importat iformatio Locatio of supply sources ad markets Locatio of potetial facility sites Demad forecast by market Facility, labor, ad material costs by site Trasportatio costs betwee each pair of sites Ivetory costs by site ad as a fuctio of quatity Sale price of product i differet regios Taxes ad tariffs Desired respose time ad other service factors Copyright 2016 Pearso Educatio, Ic. 5 13

14 Phase II: Network Optimizatio Models FIGURE 5-3 Copyright 2016 Pearso Educatio, Ic. 5 14

15 Capacitated Plat Locatio Model m D j K i = umber of potetial plat locatios/capacity = umber of markets or demad poits = aual demad from market j = potetial capacity of plat i y i x ij = 1 if plat i is ope, 0 otherwise = quatity shipped from plat i to market j f i c ij = aualized fixed cost of keepig plat i ope = cost of producig ad shippig oe uit from plat i to market j (cost icludes productio, ivetory, trasportatio, ad tariffs) Copyright 2016 Pearso Educatio, Ic. 5 15

16 Capacitated Plat Locatio Model FIGURE 5-4 Copyright 2016 Pearso Educatio, Ic. 5 16

17 Capacitated Plat Locatio Model FIGURE 5-5 Copyright 2016 Pearso Educatio, Ic. 5 17

18 Capacitated Plat Locatio Model FIGURE 5-5 Copyright 2016 Pearso Educatio, Ic. 5 18

19 Capacitated Plat Locatio Model Costraits Copyright 2016 Pearso Educatio, Ic. 5 19

20 Capacitated Plat Locatio Model FIGURE 5-6 Copyright 2016 Pearso Educatio, Ic. 5 20

21 Capacitated Plat Locatio Model FIGURE 5-7 Copyright 2016 Pearso Educatio, Ic. 5 21

22 Phase III: Gravity Locatio Models x, y : F : D : coordiate locatio of either a market or supply source cost of shippig oe uit for oe mile betwee the facility ad either market or supply source quatity to be shipped betwee facility ad market or supply source (x, y) is the locatio selected for the facility, the distace d betwee the facility at locatio (x, y) ad the supply source or market is give by d = ( x x ) 2 + ( y y ) 2 Copyright 2016 Pearso Educatio, Ic. 5 22

23 Gravity Locatio Model Sources/Markets Supply sources Trasportatio Cost $/To Mile (F ) Quatity i Tos (D ) Coordiates Buffalo ,200 Memphis St. Louis Markets Atlata Bosto ,050 1,200 Jacksoville Philadelphia New York ,000 1,080 x y Total trasportatio cost TC = d D F k å =1 TABLE 5-1 Copyright 2016 Pearso Educatio, Ic. 5 23

24 Gravity Locatio Model FIGURE 5-8 Copyright 2016 Pearso Educatio, Ic. 5 24

25 Gravity Locatio Model FIGURE 5-8 Copyright 2016 Pearso Educatio, Ic. 5 25

26 Copyright 2016 Pearso Educatio, Ic. Copyright 2016 Pearso Educatio, Ic Gravity Locatio Model 1. For each supply source or market, evaluate d 2. Obtai a ew locatio (x, y ) for the facility, where k 1 k 1 k 1 k 1 d F D d y F D y d F D d x F D x ad 3. If the ew locatio (x, y ) is almost the same as (x, y) stop. Otherwise, set (x, y) = (x, y ) ad go to step 1

27 Phase IV: Network Optimizatio Models Supply City Demad City Productio ad Trasportatio Cost per Thousad Uits (Thousad $) Atlata Bosto Chicago Dever Omaha Portlad Mothly Capacity (Thousad Uits) K Mothly Fixed Cost (Thousad $) f Baltimore 1, ,630 1,160 2, ,650 Cheyee 1,460 1, , ,500 Salt Lake City 1,925 2,400 1, ,000 Memphis 380 1, , , ,100 Wichita 922 1, , ,200 Mothly demad (thousad uits) D j TABLE 5-2 Copyright 2016 Pearso Educatio, Ic. 5 27

28 Network Optimizatio Models Allocatig demad to productio facilities Mi i 1 subject to m j 1 c ij x ij i 1 x ij D j for j 1,...,m m j 1 x ij K i for i 1,..., Copyright 2016 Pearso Educatio, Ic. 5 28

29 Network Optimizatio Models Optimal demad allocatio Atlata Bosto Chicago Dever Omaha Portlad TelecomOe Baltimore Memphis Wichita HighOptic Salt Lake Cheyee TABLE 5-3 Copyright 2016 Pearso Educatio, Ic. 5 29

30 Capacitated Plat Locatio Model Merge the compaies Solve usig locatio-specific costs y i = 1 if factory i is ope, 0 otherwise x ij = quatity shipped from factory i to market j Mi i 1 f i y i i 1 m j 1 c ij x ij Copyright 2016 Pearso Educatio, Ic. 5 30

31 Capacitated Plat Locatio Model FIGURE 5-9 Copyright 2016 Pearso Educatio, Ic. 5 31

32 Capacitated Plat Locatio Model FIGURE 5-10 Copyright 2016 Pearso Educatio, Ic. 5 32

33 Capacitated Plat Locatio Model FIGURE 5-10 Copyright 2016 Pearso Educatio, Ic. 5 33

34 Capacitated Plat Locatio Model FIGURE 5-11 Copyright 2016 Pearso Educatio, Ic. 5 34

35 Capacitated Plat Locatio Model FIGURE 5-12 Copyright 2016 Pearso Educatio, Ic. 5 35

36 Capacitated Model With Sigle Sourcig Market supplied by oly oe factory Modify decisio variables y i = 1 if factory i is ope, 0 otherwise x ij = 1 if market j is supplied by factory i, 0 otherwise Copyright 2016 Pearso Educatio, Ic. 5 36

37 Capacitated Model With Sigle Sourcig Optimal etwork cofiguratio with sigle sourcig Ope/ Closed Atlata Bosto Chicago Dever Omaha Portlad Baltimore Closed Cheyee Closed Salt Lake Ope Memphis Ope Wichita Ope TABLE 5-4 Copyright 2016 Pearso Educatio, Ic. 5 37

38 Locatig Plats ad Warehouses Simultaeously FIGURE 5-13 Copyright 2016 Pearso Educatio, Ic. 5 38

39 Locatig Plats ad Warehouses Simultaeously Model iputs m = umber of markets or demad poits = umber of potetial factory locatios l = umber of suppliers t = umber of potetial warehouse locatios D j = aual demad from customer j K i = potetial capacity of factory at site i S h = supply capacity at supplier h W e = potetial warehouse capacity at site e F i = fixed cost of locatig a plat at site i f e = fixed cost of locatig a warehouse at site e c hi = cost of shippig oe uit from supply source h to factory i c ie = cost of producig ad shippig oe uit from factory i to warehouse e c ej = cost of shippig oe uit from warehouse e to customer j Copyright 2016 Pearso Educatio, Ic. 5 39

40 Locatig Plats ad Warehouses Simultaeously Goal is to idetify plat ad warehouse locatios ad quatities shipped that miimize the total fixed ad variable costs Mi y i = 1 if factory is located at site i, 0 otherwise y e = 1 if warehouse is located at site e, 0 otherwise x ej = quatity shipped from warehouse e to market j x ie = quatity shipped from factory at site i to warehouse e x hi = quatity shipped from supplier h to factory at site i t l F iyi feye chixhi ciexie i 1 e 1 h 1 i 1 i 1 e 1 e 1 j 1 t t m c ej x ej Copyright 2016 Pearso Educatio, Ic. 5 40

41 subject to Locatig Plats ad Warehouses Simultaeously Copyright 2016 Pearso Educatio, Ic. 5 41

42 Accoutig for Taxes, Tariffs, ad Customer Requiremets A supply chai etwork should maximize profits after tariffs ad taxes while meetig customer service requiremets Modified objective ad costrait Max m r j xij Fi yi j 1 i 1 i 1 i 1 j 1 m c ij x ij i 1 x ij D j for j 1,..., m Copyright 2016 Pearso Educatio, Ic. 5 42

43 Makig Network Desig Decisios I Practice Do ot uderestimate the life spa of facilities Do ot gloss over the cultural implicatios Do ot igore quality-of-life issues Focus o tariffs ad tax icetives whe locatig facilities Copyright 2016 Pearso Educatio, Ic. 5 43

44 Summary of Learig Objectives 1. Uderstad the role of etwork desig i a supply chai 2. Idetify factors ifluecig supply chai etwork desig decisios 3. Develop a framework for makig etwork desig decisios 4. Use optimizatio for facility locatio ad capacity allocatio decisios Copyright 2016 Pearso Educatio, Ic. 5 44