Course by J.PONS Evolution of the concept of logistics From Logistics to SCM To Accompany Russell...

Course by J.PONS

Evolution of the concept of logistics

From Logistics to SCM

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.

Course by J.PONS

Course Plan


3

Copyright 1999 CIF Europe

Logistics Contents

Introduction : from Logistics to SCM

I. Operational logistics

II. Functional logistics

III. Strategical logistics

IV. Place of logistics in the company’s organization chart

V.Place and importance of transport

VI. Interface between physical & financial flows

VII. Construction of an international physical flow.

Course by J.PONS

PreambuleLogistics in constant

rebuiling


5


Evolution of logistics concept

Logistics, for a long time, was confined to the execution of tasks such as :

transport, storage, handling, conditionning,

have moved upstairs over the last twenty years and now represents a strategic function.

6


Strategic logistics challenge

• Logistics & strategic feasability :IndustrialPurchasing commercial

• No tactics without logistics• «When logistics say no, it means they are

right» Dwight EISENHOWER

7


Evolution of logistics concept

De facto, no current corporate strategy must be undertaken without having consulted Logistics :

- whether upstream with industrial strategies or purchasing strategies

- Whether downstream with distribution strategies which are now, under the impulsion of the OMC, one a global scale.

- These new strategies indeed require logistics at a more complex level in terms of customer techniques and transport.

8


Logistics in constant Rebuilding

upstream logistics rebuildingProduction unit specialisationProduction delocalisation Postponment crossdocking «worldwide» OEM localisation

9


Logistics in constant rebuilding

downstream logistics rebuildingReduction of products life cycle PromotionsCrossdockingE-commerce et « last mile »Global tradingLogistics & Marketing

10


Logistics in constant rebuildingdownstream strategiesworldwide distribution

Consumption and production are more and Consumption and production are more and

more geographically separated more geographically separated (delocalisation) .(delocalisation) .

Regions are spezialized in the commodities Regions are spezialized in the commodities they can produce more efficiently they can produce more efficiently (specialisation)(specialisation)

Logistics activities provide the bridge Logistics activities provide the bridge between production and market locationsbetween production and market locations

11


Logistics in constant rebuilding

Permanent changing business logistics practices Permanent changing business logistics practices due to :due to :

Growing internationalization and globalizationGrowing internationalization and globalization Shifting toward more service-oriented Shifting toward more service-oriented

economieseconomies Computer software available to assist in Computer software available to assist in

solving practical-size problems (SCE, SCEM, solving practical-size problems (SCE, SCEM, APS,…)APS,…)

Course by J.PONS

Introduction

Evolution of the logistics concept since one century


13


Supply Chain MangementSupply Chain MangementEvolution of logistics conceptEvolution of logistics concept

Focus of these lessons Focus of these lessons From From

operational logistics operational logistics through through

functional Logistics functional Logistics toto

strategic logisticsstrategic logistics

14


J.PONS’ cursus & Logistics evolution

Experience in operational logistics Secrétaire Général by GONDRAND Cie (3PL)Experience in functional logistics

Operation manager by ALCATEL Group (imotics)

Experience in sectorial logistics Operation manager by CE2M (automotive sector)Consulting (4PL) Manager by Anetys

15


J.PONS’ cursus & Logistics evolution

• Teacher’s cross-functional curriculum presentation :

• by GONDRAND : learning of the importance of mastering all the logistics tools like transportation, warehousing, packaging, handling, custom’s aspects for international supply chain : SAD, transit (T1), Common Tariff, economic customs arrangements

16


SCM

Operational logistics

17


1 PL or transport for own account

• First level logistics1LP or One single logistics partner

• To perform their logistics, companies initially managed to organize themselves with their own vehicle fleet (transport for own account).

18


2PL

• Two-level logisticsOr 2PL ( principal and logistics supplier)

Most companies outsourced at least the "low levels" of logistics, starting with transport operations, working with several public carriers to atomized professions

• (monoparcels, groupings, lots).

19


3PL

• During the middle of the 1990s Companies have discovered the benefits of hiring outside, or third party, logistics expert to manage the total flow of products.

• The trend towards enterprises focusing on their core activities has also affected logistics.

• By abandoning this function, enterprises have allowed a true market for service provision to emerge in the sector.

20


3PL

• Three-level logistics

or 3PL and LLP (principal, logistics supplier executors' guarantor).

• Then the best world management practices led companies to generally reduce the number of suppliers and mainly the number of carriers.

• The 3PLs gradually developed concentric service companies withstronger added value, leading to carrying out more varied tasks such as cross-docking, co-manufacturing, co-packing, tracing & tracking..

21


4PL

• « Supply chain integrator that assembles, manages the resources, capabilities & technology of its own organisation with those of complementary service providers to deliver a comprehensive supply chain solution» (Andersen Consulting).

• A 4PL is ideally placed to choose the best of breed in each category by integrating 3PL Providers, management and IT consultants to form a high-level alliance.

• It is through this collection of companies that a 4PL is formed, with the lead consultancy at the epicentre.

22


4PL

• The 4PL:

Physical flow Consultant Analysts and Supply Chain Optimisers

To further optimize the logistics chain, company call on specialized logistics consultants who add on a 4th level of parties involved (or 4th Party Logistics).

These 4PLs can be 3PLs who are not execution subcontractors, but who plan and coordinate physical flows executed by natural operators (2PLs) or providers of a supply chain (3PLs).

They innovate and thus reduce total costs.

23


5 PL

• The 5PL: Integrators of execution software

As a final development, physical flow consultants

(4PL) , has to incorporate experts in the integration of logistics information systems (5PL) to fully pilot information, sharing between clients, suppliers and 3PLs.

24


Operational logistics

Experience by GONDRANDExperience by GONDRAND Transportation managementTransportation management Physical distributionPhysical distribution Materials managementMaterials management Clearance procedure Clearance procedure From 2PL to 3PLFrom 2PL to 3PL

25


Field of operational LogisticsField of operational Logistics

Inventory maintenanceInventory maintenance Order processingOrder processing PurchasingPurchasing WarehousingWarehousing Materials handlingMaterials handling PackagingPackaging Customer service standardsCustomer service standards Product schedulingProduct scheduling

26


GONDRANDoperational approach :

carriage, customs, warehousing

Import and export procedures.• SAD : EX1nr 3 = the only relevant document for proving the export and justify

the Tax Free Invoice• IM4 nr 8 = delivered to the Importer and justifies the payment of eventual

customs duties and taxes• Inland Clearance Depot / CRD• Nomenclature : Harmonised System, Combined Nomenclature 8• Binding Nomenclature Information BNI/RTC• Origine: associated countries (EU & EFTA, EU & Magreb/Machrack).

Binding Origin Information BOI / RTO• EUR1, ATR1, Certificate of origin Form A• Customs value: CIF,CIP,DAF price• Release for free consumption : VAT T1 : transit title Economic customs arrangement (jobprocessing, duty suspension)

27


European

Union (25)

intrastat

VAT

EFTA

Israël

Turkey (ATR1)

EUR 1 + DAU

PTOM

ACP

EUR1 +VAT

GPS

USA...

Canada

New Zealand

Taiwan

Certificate of origin Form A

Maghreb

Machrach

+ VAT declaration

Free entrance, free consumption processes

28


GONDRANDoperational approach : customs procedure

Import and export procedures with a Single Administration Document

Export procedure with the first exemplars• EX1nr 3 = the only relevant document for proving the export and

justify the Tax Free Invoice

IMPORT & Free Practice process (last three exemplars)• IM4 nr 8 = delivered to the Importer and justifies the payment of

eventual customs duties and taxes• Inland Clearance Depot / CRD

29




Import and export procedures.

• Nomenclature : Harmonised System, Combined Nomenclature 8

• Binding Nomenclature Information BNI/RTC

30





• Origine: associated countries (EU & EFTA, EU & Magreb / Machrack, ACP, Yaoundé).

• Binding Origin Information BOI / RCO• EUR1, ATR1, • Certificate of origin • Form A (China) for goods under quota.

31





• Free Practice process : customs value• Release for free consumption : VAT calculation T1, T2, TIR : transit title Economic customs arrangement :

job-processing, duty suspension, economic customs arrangement, temporary importation arrangements, returned goods relief, inward or outward processing relief arrangements

32


Key activitiesKey activitiestransportationtransportation

Mode and transport service selectionMode and transport service selection Freight consolidation (FCL)Freight consolidation (FCL) Carrier routingCarrier routing Vehicle schedulingVehicle scheduling Equipment selectionEquipment selection Claims processingClaims processing Rate auditingRate auditing

33


Key activitiesKey activitiesinventory managementinventory management

Raw material and finidhed goods stocking Raw material and finidhed goods stocking policiespolicies

Short-term sales forecastingShort-term sales forecasting Product mix at stocking pointsProduct mix at stocking points Number, size, and location of stocking Number, size, and location of stocking

pointspoints JIT, push and pull strategiesJIT, push and pull strategies

34


Key activitiesKey activitiesorder processingorder processing

Sales order-inventory interface Sales order-inventory interface proceduresprocedures

Order information transmittal methodsOrder information transmittal methods Ordering rulesOrdering rules

35


Support activitiesSupport activitieswarehousingwarehousing

Support activities (depending on the Support activities (depending on the circumstances)circumstances)

WarehousingWarehousing Space determinationSpace determination Stock layout and dock designStock layout and dock design Warehouse configurationWarehouse configuration Stock placementStock placement

36


Support activitiesSupport activitiesmaterials handlingmaterials handling

Equipment selectionEquipment selection Equipment replacement policiesEquipment replacement policies Order picking proceduresOrder picking procedures Stock storage and retrievalStock storage and retrieval

37


SCM

Functional logistics

Logistics & Procurement

38


ALCATEL Group Imotic sector

functional approach

Logistics & Purchasing function

• Case exposed : sourcing of EOM for active network products

39



functional approach

Teacher’s cross-functional curriculum presentation :

by ALCATEL :

learning how logistics improves purchasing and procurement functions

40



« Domotic » or home automation: to make a flat « smart » like with the « blue tooth » technology of Ericson.

« Imotic » : to make an Office-building « smart »

Everywhere possibility to receive voice, images, data

41



3 Kinds of components items : Cable : optical fiber (100 billions bits/second),

coaxial cable, simple wireLeaders Pirelli, Nexans (Ex Alcatel Câble) Connectics : AMP, Areva (Framatome

Connectics), AMPHENOL Active network products (modem, transceivers,

repeaters)Supplier : Birktech.

42


Functional logistics experience by ALCATELexperience by ALCATEL Purchasing & Logistics Difference in the decision criteria Ex : LCL/FCL (sea carriage) « Paying load » rule (air carriage)

43


Purchaser/Logisticiandecision criteria

comparison• PURCHASER

– OEM Sourcing – EOQ (Wilson)– Stocks level– Acquisition costs– obsolescence– Quality– Production and delivery time– Units– Innovation & development

capacities

• LOGISTICIAN• OEM localisation

– Multimodal approach: Sea Air

– FCL/LCL, – Price – Quality– Transit Time– Units– W/M ratio – « paying for » rule

Weight orVolume tarification Sea transport : 1 ton / 1cm W/M

at ship’s convenience

Road transport : 1 ton/ 3 cm

Air transport : 1 ton / 6 cm (soon 1 ton / 5 cm)

Ex : 24 cm3 and 300 Kgs.

taxation : 24cm/6 = 400 Kgs

« paying for » rule (road/air) weight slot with degressive tariffs the « paying for » rule consists in applying to a good, a

superior weight than its real weight, based on a more favorable tarification, at customer’s convenience.

Ex : tarification from 20 to 45 kg : 5€/kg

45 to 60 kg : 3€/kg

Normal tarification : 40 kg x 5 € = 200 €

« paying for » rule : 45 kg x 3 € = 135 €

46


Air / Sea

• Volume : 6 m3

• Weight : 1 tonne• Air freight : 3 €/kg• Sea freight : 300 € /

tonnage or cubic meter

1 t 1 cm Sea

300€

Air

3000

1 t 2 cm 600€ 3000

1 t 2 cm 900€ 3000

1 t 4 cm 1200 3000

1 t 6 cm 1800 3000

Tarification: air quotes• Flat rate

• Special rates

• Corates

• ULD / Unit Load Devices

Tarification : Sea quotes• flat rate• (+) or (-) CAF (currency Adjustment factor)• (+) or (-) BAF (bunkerage Adjustment factor)• + Congestion• + Outport additionnal• + Hazardous• + MEES

49


Functional logistics experience by CE2M experience by CE2M Fabrication of automotive cable Fabrication of automotive cable

bundles bundles

Logistics challenge

The 7 R’s by Shigeo Shingo : Zero Inventory, Delivery Time, Defect, Paper, Incident, breakdown, Scorn

50


SCM

• by CE2M automotive supplier in cable bundles :

• coping with the challenge and constraints of “ Seven Rs” imposed by BOSCH Gmbh (right amount of the right product at the right place at the right time in the right condition at the right price with the right information and no SCORN)

• JIT, lower inventory, EOQ, make to order, make to stock, assemble to order, inventory management

Right inventory zéro stock

Inventory Inventory ManagementManagement


52


Les Modules R/3 de SAP : Achats et stocks (MM)

• MM permet à l ’ entreprise de gérer ses stocks et son approvisionnement dans le cadre des opérations courantes.

• Ses principales composantes :

– Approvisionnement (achats)

– Gestion des stocks

– Méthode du point de commande

– Contrôle de la facturation

– Valorisation des stocks

– Évaluation des fournisseurs

– Gestion des services externes

– Système d ’ information des achats et système d ’ information

du contrôle des stocks.

53


Gestion des stocks

Problématique • Satisfaire des besoins futurs mal connus,• tout en minimisant les coûts eux-mêmes,• en passant des commandes dont la livraison est

soumise à aléas• Les logiciels SCM ne règlent pas tout• Il faut une étroite collaboration entre les services :

achats, production, entretien, ventes, compta, finances, informatique, personnel, administration, magasins, DG.

54


Gestion des stockspourquoi constituer un stock?.

• Pénurie• Retard livraison• Hausse des prix• Retard de production• Stocks de pièces de rechange pour éviter arrêt de production• Bénéficier remises sur prix d’achat, sur frais de port• Éviter achats fréquents• Objectif spéculatif• Nécessité liée à saisonnalité de production (céréales) ou de la demande

(jouets)• Bonification de certains produits (cognac, bois)• Satisfaction immédiate de la demande.

55


Gestion des stocksDéfinition et nature du stock

• Ensemble des produits accumulés en attente de consommation (lorsque le produit sort du stock)

• Nature du stock en fonction de leur utilisation ultérieure : Produits finis vendus en l’état, produits finis prêts à la

vente. Matières premières entrant dans produit fini Matières consommables nécessaires à la production et au

fonctionnement de l’entreprise Emballages Produits semi-finis, semi-ouvrés, WIP Résidus de fabrication

56


Gestion des stocksPartie constitutive du stock

Quantité en stock

Stock de protection

Stock actif

temps

Stock théorique

Stock réel

57


Gestion des stocks

• Stock actif : partie destinée à satisfaire la demande

• Stock de protection ou de sécurité : partie destinée à satisfaire une demande supérieure à la moyenne prévue ou à parer aux conséquences d’un retard de livraison.

• Stock stratégique : pour les produits sensibles, stock fixé par DG.

58


Gestion des stocksCoût du stock

• Frais d’acquisition générés par la constitution et le renouvellement du stock

• Frais de possession

• Frais de rupture générés par une défaillance du stock qui n’est plus à même de satisfaire la demande.

59


Gestion des stocksCoût du stock

Frais de rupture

- Très élevés, mais non chiffrables à priori

- Recours à l’aérien, aux intégrateurs, au lieu de solutions classiques route ou maritime.

- Coût de la solution de remplacement

- Coût d’annulation de contrat, etc…

60


II. Gestion des stocksCoût du stock

Frais d’acquisition constitués de : Frais de fonctionnement du service achats (entre 45 000 et 60 000 € /an/personne) Contrôle qualité Réception en magasin (10% en moyenne des frais de fonctionnement du magasin soit entre 30 000

et 35 000€/an/personne) Frais de fonctionnement de la comptabilité matière (entrées en stock) entre 40 000 et 65 000 € /

an/ personne Frais de fonctionnement de la comptabilité fournisseur et coût de l’émission des instruments de

paiement des factures liées aux achats de produits stockés (30 à 60% des factures reçues), entre 40 000 et 65 000 € /an/personne

Frais informatiques : gestion des commandes des produits stockés (12 à 30 €/article/an), gestion du stock (10 à 40 €/article/an), traitement comptable des entrées en stocks (1 à 3 €/entrée).

Frais élevés qui atteignent 1,5 à 4,5% environ des achats.Frais moyens par commande : entre 40 et 300 €Frais moyens par produit :

61


Gestion des stocksPolitique du stock Zéro

Applicable si risque et coût de rupture faibles.

Conditions à réunir :- Sources d’approvisionnement sûres grâce à une

sélection rigoureuse de fournisseurs-partenaires.

- Appareil de production souple- Maintenance préventive et politique de qualité- Sélection de Personnel qualifié et adhésion au

projet d’entreprise.

62


Inventory

Stock of items held to meet future demandInventory management answers two

questionsHow much to orderWhen to order

63


Types of Inventory

Raw materialsPurchased parts and suppliesLaborIn-process (partially completed products)Component partsWorking capitalTools, machinery, and equipment

64


Reasons to Hold Inventory

Meet unexpected demandSmooth seasonal or cyclical demandMeet variations in customer demandTake advantage of

price discountsHedge against price

increasesQuantity discounts

65


Two Forms of Demand

Dependent Items used to produce final products

Independent Items demanded by external customers

66


Inventory Costs

Carrying CostCost of holding an item in inventory

Ordering CostCost of replenishing inventory

Shortage CostTemporary or permanent loss of sales when

demand cannot be met

67


Inventory Control Systems

Continuous system (fixed-order-quantity)Constant amount ordered when inventory

declines to predetermined level

Periodic system (fixed-time-period)Order placed for variable amount after fixed

passage of time

68


ABC Classification System

Demand volume and value of items varyClassify inventory into 3 categories,

typically on the basis of the dollar value to the firm

PERCENTAGE PERCENTAGECLASS OF UNITS OF DOLLARS

A 5 - 15 70 - 80B 30 15C 50 - 60 5 - 10

69


ABC Classification

1 $ 60 902 350 403 30 1304 80 605 30 1006 20 1807 10 1708 320 509 510 60

10 20 120

PART UNIT COST ANNUAL USAGE

Example 10.1

70


ABC Classification

Example 10.1

11 $ 60$ 60 909022 350350 404033 3030 13013044 8080 606055 3030 10010066 2020 18018077 1010 17017088 320320 505099 510510 6060

1010 2020 120120

PARTPART UNIT COSTUNIT COST ANNUAL USAGEANNUAL USAGETOTAL % OF TOTAL % OF TOTALPART VALUE VALUE QUANTITY % CUMULATIVE

9 $30,600 35.9 6.0 6.08 16,000 18.7 5.0 11.02 14,000 16.4 4.0 15.01 5,400 6.3 9.0 24.04 4,800 5.6 6.0 30.03 3,900 4.6 10.0 40.06 3,600 4.2 18.0 58.05 3,000 3.5 13.0 71.0

10 2,400 2.8 12.0 83.07 1,700 2.0 17.0 100.0

$85,400

71


ABC Classification

Example 10.1

11 $ 60$ 60 909022 350350 404033 3030 13013044 8080 606055 3030 10010066 2020 18018077 1010 17017088 320320 505099 510510 6060

1010 2020 120120

PARTPART UNIT COSTUNIT COST ANNUAL USAGEANNUAL USAGETOTAL % OF TOTAL % OF TOTALPART VALUE VALUE QUANTITY % CUMULATIVE

9 $30,600 35.9 6.0 6.08 16,000 18.7 5.0 11.02 14,000 16.4 4.0 15.01 5,400 6.3 9.0 24.04 4,800 5.6 6.0 30.03 3,900 4.6 10.0 40.06 3,600 4.2 18.0 58.05 3,000 3.5 13.0 71.0

10 2,400 2.8 12.0 83.07 1,700 2.0 17.0 100.0

$85,400

A

B

C

72


ABC Classification

Example 10.1Example 10.1

11 $ 60$ 60 909022 350350 404033 3030 13013044 8080 606055 3030 10010066 2020 18018077 1010 17017088 320320 505099 510510 6060

1010 2020 120120

PARTPART UNIT COSTUNIT COST ANNUAL USAGEANNUAL USAGETOTAL % OF TOTAL % OF TOTALPART VALUE VALUE QUANTITY % CUMMULATIVE

9 $30,600 35.9 6.0 6.08 16,000 18.7 5.0 11.02 14,000 16.4 4.0 15.01 5,400 6.3 9.0 24.04 4,800 5.6 6.0 30.03 3,900 4.6 10.0 40.06 3,600 4.2 18.0 58.05 3,000 3.5 13.0 71.0

10 2,400 2.8 12.0 83.07 1,700 2.0 17.0 100.0

$85,400

AA

BB

CC

% OF TOTAL % OF TOTALCLASS ITEMS VALUE QUANTITY

A 9, 8, 2 71.0 15.0B 1, 4, 3 16.5 25.0C 6, 5, 10, 7 12.5 60.0

73


ABC Classification

100 –

80 –

60 –

40 –

20 –

0 –| | | | | |0 20 40 60 80 100

% of Quantity

% o

f V

alu

e

A

BC

74


Assumptions of Basic EOQ Model

Demand is known with certainty and is constant over time

No shortages are allowedLead time for the receipt of orders is

constantThe order quantity is received all at once

75


The Inventory Order Cycle

Demand rate

TimeLead time

Lead time

Order placed

Order placed

Order receipt

Order receipt

Inve

nto

ry L

evel

Reorder point, R

Order quantity, Q

0

Figure 10.1

76


EOQ Cost ModelD - annual demandCo - cost of placing order

Cc - annual per-unit carrying cost

Q - order quantityAnnual ordering cost =CoD

Q

Annual carrying cost =CcQ

2

Total cost = +CoD

Q

CcQ

2

77


EOQ Cost Model

Slope = 0

Total Cost

Order Quantity, Q

Annual cost ($)

Minimum total cost

Optimal order Qopt

Carrying Cost =CcQ

2

Ordering Cost =CoD

Q

Figure 10.2

78


EOQ Cost ModelD - annual demandCo - cost of placing order

Cc - annual per-unit carrying cost

Q - order quantityAnnual ordering cost =CoD

Q

Annual carrying cost =CcQ

2

Total cost = +CoD

Q

CcQ

2

TC = +CoD

Q

CcQ

2

= +CoD

Q2

Cc

2

TC

Q

0 = +C0D

Q2

Cc

2

Qopt =2CoD

Cc

Deriving QoptProving equality of costs at optimal point

=CoD

Q

CcQ

2

Q2 =2CoD

Cc

Qopt =2CoD

Cc

79


EOQ ExampleD = 10,000 yardsCc = $0.75 per yardCo = $150

Qopt =2CoD

Cc

Qopt =2(150)(10,000)

(0.75)

Qopt = 2,000 yards

Example 10.2

80


EOQ Example

TC = +CoD

Q

CcQ

2

TC = +(150)(10,000)

2,000

(0.75)(2,000)

2

TC = $750 + $750 = $1,500

Example 10.2

D = 10,000 yardsCc = $0.75 per yardCo = $150

Q = 2,000

81


EOQ Example

Orders per year = D/Q

= 10,000/2,000

= 5 orders/year

Example 10.2


82


EOQ Example

Order cycle time = 311 days/(D/Q)

= 311/5

= 62.2 store days

Example 10.2


83


EOQ with Noninstantaneous Receipt

Inventorylevel

Time0

Orderreceipt period

Beginorder

receipt

Endorder

receipt Figure 10.3

d=demand rate

p=production rate

slope =p-d

84



Q(1-d/p)

Inventorylevel

(1-d/p)Q2

Time0

Orderreceipt period

Beginorder

receipt

Endorder

receipt

Maximuminventory level

Averageinventory level

Figure 10.3

85



p = production rate d = demand rate

Maximum inventory level = Q - d

= Q 1 -

Qp

dp

Average inventory level = 1 -Q2

dp

TC = + 1 -dp

CoD

Q

CcQ

2

Qopt =2CoD

Cc 1 - dp

86


Production Quantity

Cc = $0.75 per yard Co = $150 D = 10,000 yards

d = 10,000/311 = 32.2 yards per day p = 150 yards per day

Qopt = = = 2,256.8 yards2CoD

Cc 1 - dp

2(150)(10,000)

0.75 1 - 32.2150

TC = + 1 - = $1,329dp

CoD

Q

CcQ

2

Production run = = = 15.05 days per orderQp

2,256.8150

Example 10.3

87


Production Quantity

Cc = $0.75 per yard Co = $150 D = 10,000 yards

d = 10,000/311 = 32.2 yards per day p = 150 yards per day

Qopt = = = 2,256.8 yards2CoD

Cc 1 - dp

2(150)(10,000)

0.75 1 - 32.2150

TC = + 1 - = $1,329dp

CoD

Q

CcQ

2

Production run = = = 15.05 days per orderQp

2,256.8150

Example 10.3

Number of production runs = = = 4.43 runs/yearDQ

10,0002,256.8

Maximum inventory level = Q 1 - = 2,256.8 1 -

= 1,772 yards

dp

32.2150

88


Quantity Discounts

Price per unit decreases as order quantity increases

TC = + + PDCoD

Q

CcQ

2where

P = per unit price of the itemD = annual demand

89


Quantity Discounts

Price per unit decreases as order quantity increases

TC = + + PDCoD

Q

CcQ

2where

P = per unit price of the itemD = annual demand

90


Quantity Discount Model

Figure 10.4Qopt

Carrying cost

Ordering cost

Inve

nto

ry c

ost

($)

Q(d1 ) = 100 Q(d2 ) = 200

TC (d2 = $6 )

TC (d1 = $8 )

TC = ($10 )

91


Quantity DiscountQUANTITY PRICE

1 - 49 $1,400

50 - 89 1,100

90+ 900

Co = $2,500

Cc = $190 per computer

D = 200

Qopt = = = 72.5 PCs2CoD

Cc

2(2500)(200)190

TC = + + PD = $233,784 CoD

Qopt

CcQopt

2

For Q = 72.5

TC = + + PD = $194,105CoD

Q

CcQ

2

For Q = 90

Example 10.4

92


When to Order

Reorder Point is the level of inventory at which a new order is placed

R = dL

where

d = demand rate per periodL = lead time

93


Reorder Point Example

Demand = 10,000 yards/year

Store open 311 days/year

Daily demand = 10,000 / 311 = 32.154 yards/day

Lead time = L = 10 days

R = dL = (32.154)(10) = 321.54 yards

Example 10.5

94


Safety Stocks

• Safety stock– buffer added to on hand inventory during lead

time

• Stockout – an inventory shortage

• Service level – probability that the inventory available during

lead time will meet demand

95


Variable Demand with a Reorder Point

Figure 10.5

Reorderpoint, R

Q

LT

Time

LT

Inve

nto

ry le

vel

0

96


Reorder Point with a Safety Stock

Figure 10.6

Reorderpoint, R

Q

LT

Time

LT

Inve

nto

ry le

vel

0

Safety Stock

97


Reorder Point With Variable Demand

R = dL + zd Lwhere

d = average daily demandL = lead time

d = the standard deviation of daily demand

z = number of standard deviationscorresponding to the service levelprobability

zd L = safety stock

98


Reorder Point for a Service Level

Probability of meeting demand during lead time = service level

Probability of a stockout

R

Safety stock

dLDemand

zd L

Figure 10.7

99


Reorder Point for Variable Demand

The carpet store wants a reorder point with a 95% service level (a 5% stockout probability) d = 30 yards per day

L = 10 daysd = 5 yards per day

For a 95% service level, z = 1.65

R = dL + z d L

= 30(10) + (1.65)(5) (10)

= 326.1 yardsExample 10.6

100


Order Quantity for a Periodic Inventory System

Q = d(tb + L) + zd tb + L - I

where

d = average demand ratetb = the fixed time between ordersL = lead timed = standard deviation of demand

zd tb + L = safety stockI = inventory level

101


Fixed-Period Model with Variable Demand

d = 6 bottles per day L= 5 daysd = 1.2 bottles I = 8 bottlestb = 60 days z = 1.65 (for a 95%

service level)

Q = d(tb + L) + zd tb + L - I

= (6)(60 + 5) + (1.65)(1.2) 60 + 5 - 8

= 397.96 bottles

102


Strategic Decisions in Operations

Products Processes

and Technology

CapacityHuman

Resources Quality

Facilities Sourcing

Services

Operating Systems

Figure 2.2Figure 2.2

103


Products & Services

Make-to-order Made to customer specifications after order Made to customer specifications after order

receivedreceived

Make-to-stock Made in anticipation of demandMade in anticipation of demand

Assemble-to-order Add options according to customer Add options according to customer

specificationspecification

104


Processes & Technology

Project One-time production of product to customer orderOne-time production of product to customer order

Batch production Process many jobs at same time in batchProcess many jobs at same time in batch

Mass production Produce large volumes of standard product for mass Produce large volumes of standard product for mass

marketmarket

Continuous production Very high volume commodity productVery high volume commodity product

105


Production models and Inventory types (Zero Inventory)

according to the APICS

• ATP : Available To Promise (flow production)Necessity of having big inventories

• BTO : Built To Order (job production)Plain-carrier, prototype, little batchesNo needs of finish product inventories

• ATO : Available to Order (batch production)Postponment : car manufacturing

106


Product-Process MatrixV

olu

me

Vo

lum

e

LowLow

LowLow HighHigh

HighHigh

Projects

BatchProduction

MassProduction

ContinuousProduction

StandardizationStandardizationFigure 2.3Figure 2.3

107


Service-Process MatrixV

olu

me

Vo

lum

e

LowLow

LowLow HighHigh

HighHigh

Professional Service

Service Shop

MassService

Service Factory

StandardizationStandardizationFigure 2.4Figure 2.4

108


22ndnd topic topic

7 "R"s &7 "R"s & Logistics excellenceLogistics excellence

Fulfilment rateFulfilment rate Tools Tools

Right amountRight amount DRP + JITDRP + JIT

Right productRight product TQMTQM

Right placeRight place DRP + ECRDRP + ECR

Right timeRight time JITJIT

Right conditionRight condition TQMTQM

Right priceRight price JIT + ABC + QFDJIT + ABC + QFD

Right informationRight information EDI + ERP + EDI + ERP + CALSCALS +XML+XML

Just in…trouble zéro délai

Just-In-Time and Just-In-Time and Lean ProductionLean Production


110


What is JIT ?

Producing only what is needed, when it is needed

A philosophy An integrated management systemJIT’s mandate:

Eliminate all waste

111


Basic Elements of JIT

1. Flexible resources

2. Cellular layouts

3. Pull production system

4. Kanban production control

5. Small-lot production

112


Basic Elements of JIT

6. Quick setups

7. Uniform production levels

8. Quality at the source

9. Total productive maintenance

10. Supplier networks

113


Figure 11.1

Waste in Operations

114


Figure 11.1

Waste in Operations

115


Figure 11.1

Waste in Operations

116


Flexible Resources

• Multifunctional (cross-trained) workers

• General purpose machines

• Study operators and improve operations

117


Standard Operating Routine for a Worker

Standard Operating RoutineSheet 1

Worker: RussellCycle Time: 2 min

Order of Operations timeOperations :10 :20 :30 :40 :50 1:00 1:10 1:20 1:30 1:40 1:50 2:00

Pick up material

Unload/load machine 1



Inspect/pack

Figure 11.2

118


Cellular Layouts

• Group dissimilar machines in manufacturing cell to produce family of parts

• Work flows in one direction through cell

• Cycle time adjusted by changing worker paths

119


Manufacturing Cell with Worker Routes

Worker 1

Worker 2

Worker 3

Cell 1

Figure 11.3

120


Worker Routes Lengthened as Volume Decreases

Cell 5

Worker 2

Cell 2

Worker 1

Cell 1

Worker 3

Cell 3 Cell 4

Figure 11.4

121


The Pull System

• Material is pulled through the system when needed

• Reversal of traditional push system where material is pushed according to a schedule

• Forces cooperation

• Prevents over and underproduction

122


Kanban Production Control System

• Kanban card indicates standard quantity of production

• Derived from two-bin inventory system

• Kanban maintains discipline of pull production

• Production kanban authorizes production

• Withdrawal kanban authorizes movement of goods

123


A Sample Kanban

124


The Origin of Kanban

Reorder card

Bin 1

Bin 2

Q - R

Kanban

RR

Q = order quantity

R = reorder point - demand during lead timeFigure 11.5

b) Kanban inventory system

a) Two-bin inventory system

125


Types of Kanbans

Figure 11.6

126


Types of Kanbans

Figure 11.6

127


Types of Kanbans

Figure 11.6

128


Types of Kanbans• Kanban Square

– Marked area designed to hold items

• Signal Kanban– Triangular kanban used to signal production at the

previous workstation

• Material Kanban– Used to order material in advance of a process

• Supplier Kanbans– Rotate between the factory and suppliers

129


Determining Number of Kanbans

Number of Kanbans =

average demand during lead time + safety stock

container size

where N = number of kanbans or containersd = average demand over some time periodL = lead time to replenish an orderS = safety stockC = container size

N =dL + S

C

130


Determining the Number of Kanbans

d = 150 bottles per hour S = 0.10(150 x 0.5) = 7.5L = 30 minutes = 0.5 hours C = 25 bottles

Round up to 4 (to allow some slack) or down to 3 (to force improvement)

N = =

= = 3.3 kanbans or containers

dL + SC

(150 x 0.5) + 7.5

25

75 + 7.5

25

Example 11.1

131


Small-Lot Production

Requires less space and capital investment

Moves processes closer togetherMakes quality problems easier to

detectMakes processes more dependent

on each other

132


Inventory Hides Problems

133


Lower Levels of Inventory Expose Problems

134


Components of Lead Time

Processing time Reduce number of items or improve

efficiencyMove time

Reduce distances, simplify movements, standardize routings

Waiting time Better scheduling, sufficient capacity

Setup time Generally the biggest bottleneck

135


SMED Principles

1. Separate internal setup from external setup

2. Convert internal setup to external setup

3. Streamline all aspects of setup

4. Perform setup activities in parallel or eliminate them entirely

136


Common Techniques for Reducing Setup Time

Figure 11.8

137



Figure 11.8

138



Figure 11.8

139


Uniform Production

Results from smoothing production requirements

Kanban systems can handle +/- 10% demand changes

Smooths demand across planning horizon

Mixed-model assembly steadies component production

140


Mixed-Model Sequencing

Example 11.2

141


Quality at the Source

Jidoka is authority to stop production line

Andon lights signal quality problemsUndercapacity scheduling allows for

planning, problem solving and maintenance

Visual control makes problems visiblePoka-yoke prevents defects

142


Visual Control

Figure 11.9

143


Visual Control

Figure 11.9

144


Visual Control

Figure 11.9

145


KaizenContinuous improvementRequires total employment

involvementEssence of JIT is willingness of

workers toSpot quality problemsHalt production when necessaryGenerate ideas for improvementAnalyze problemsPerform different functions

146


Total Productive Maintenance (TPM)

• Breakdown maintenance– Repairs to make failed machine operational

• Preventive maintenance– System of periodic inspection and maintenance

to keep machines operating

• TPM combines preventive maintenance and total quality concepts

147


TPM Requirements

• Design products that can be easily produced on existing machines

• Design machines for easier operation, changeover, maintenance

• Train and retrain workers to operate machines

148


TPM Requirements

• Purchase machines that maximize productive potential

• Design preventive maintenance plan spanning life of machine

149


Supplier Policies

1. Locate near to the customer

2. Use small, side loaded trucks and ship mixed loads

3. Consider establishing small warehouses near to the customer or consolidating warehouses with other suppliers

150


Supplier Policies

4. Use standardized containers and make deliveries according to a precise delivery schedule

5. Become a certified supplier and accept payment at regular intervals rather than upon delivery

151


Benefits of JIT

1. Reduced inventory2. Improved quality3. Lower costs4. Reduced space requirements5. Shorter lead time6. Increased productivity7. Greater flexibility

152


Benefits of JIT

8. Better relations with suppliers

9. Simplified scheduling and control activities

10. Increased capacity

11. Better use of human resources

12. More product variety

153


JIT Implementation

• Use JIT to finely tune an operating system

• Somewhat different in USA than Japan

• JIT is still evolving

• JIT isn’t for everyone

154


JIT in Services

• Competition on speed & quality

• Multifunctional department store workers

• Work cells at fast-food restaurants

• Just-in-time publishing for textbooks

• Construction firms receiving material just as needed

155


SCM

Right Time

JIT or « Just in Trouble »

Integrators ; FedEx, UPS, DHL, TNT PG

« Blue Banana »

156


157


Blue Banana

• The so-called « Blue Banana » belt constitutes the economic heart of the European Community, accounting for 2/3 of GNP.

• The regions of France (the North, the East, and the Southeast) are well placed on its periphery as sites for logistics platforms, being less congested than areas within it.

158


II. Aircraft CompaniesIntern’l traffic

Lufthansa (6,5 MTK)

Korean Air ways (5,7)

Singapore AL (5,4)

AF (4,7)

BA

JAL

FedEx

KLM

Cathay Pacific

United A

Northwest

Nippon Cargo

UPS (15)

National traffic

FedEx (6,054)

UPS (4 232)

United A (0,958)

Northwest A (0,765)

AA

FedEx

Delta A L

ANA

China Southern A

JAL

Varig

Air Canada

China Eastern A

Total traffic

FedEx (14 632) (100%)

AF + KLM (9 059)

UPS (7 295) (100%)

Lufhansa (7 158) (14%)

Singapore (6 909) (24%)

Korean (6 247) (29%)

JAL (5 024) (10%)

AF (4 862) (25%)

Cathay (4 854) (28%)

China (4 600) (39%)

BA (4 210) (6%)

KLM (4 197) (16%)

Cargolux (4 157) (98%)

United A (3658) (5%)

Northwest (3 578) (8%)

159


II. Accident rates since 1990

Aero PeruCubanaAir ZimbabweChina AirlineRoyal JordanianTurkish AirlinesAir IndiaEgypt AirAir Tran (Value Jet) USAKorean Airways

• 16,7 accidents/1 million of flight

• 15,2• 12,5• 10• 8,82• 7,3• 6,82• 6,67• 5,88• 5,38

160


III. Traveler’s Airport(in Mio travelers)

• Atlanta Hartsfield• Chicago O’Hare• LA• London• Dallas• Tokyo Haneda• Francfurt• San Francisco• Paris CDG• Denver

• 73,5 • 72,5• 61,2• 60,6• 60,4• 51,5• 42,7• 40,1• 38,7• 36,8• (Source : Airports Council I’l)

161


III.Freight Airports (in MT 2000)

• Memphis (Headoffice of Fedex)• HK• LA• Tokyo• NY (JFK)• Anchorage• Seoul• Miami• Francfort• Chicago• Singapour• Louisville• London (LHR)• Paris (CDG)• Amsterdam

• 2,412• 1,989• 1,952• 1,841• 1,737• 1,676• 1,655• 1,651• 1,539• 1,532• 1,523• 1,486• 1,355• 1,226• 1,225 (Source:Airports Council I’l)

162


IX. Integrators

FedEx• Created in 1973• 3,3 m colis/day towards 210

countries• 200 000 employees• 43 800 warehouses &10 hubs• 663 plains• 44 500 vehicules• Turn over 19 M$ in 2001• Network : Memphis, Subic

Bay, Dubaï, Paris.

UPS• Created in 1919• 11,5 m colis/day towards

200 countries• 362 800 employees• 1713 warehouses & 15

hubs• 500 plains• 157 000 vehicules• Turn over 24,8 M$

163


IX. Integrator

DHL

• Created in 1970

• 228 countries

• 63 552 employees

• 3002 agences et 35 hubs

• 252 plains

• 18 576 vehicules

• EDI Connection

• Turn over : 0,2 m$

164


SCM

Right product

TQM & 6 Sigma Defect company (cf GE) Juran, Deming Gemba Kaizen & Gembutsu « to make the rocks lower » « to pursue the last grain into the corner » « When you are clean on the floor, you will be clean in your head »

165


KAIZEN (Zero Defect )

to keap his house in order

• Seiri (trier, to sort)

• Seiton (ranger, to straighten)

• Seiso (nettoyer, to scrub)

• Seiketsu (systématiser, to systematize)

• Shitsuke (standardiser, to standardize)

166


Gemba KAIZEN (Zero Defect)

Struggle against the 7 wastes (Muda)• Muda (surproduction) (pull production)

• Muda (storage) (stock holding costs don’t create VA)

• Muda (refurbishing) (costly defective pieces)

• Muda (moving) (plant lay out)

• Muda (unnecessary treatment) (tasks elemination)

• Muda (waiting) (unbusy operator, Men muda)

167


SCM

Paperless Production

ERP, WMS, SCM Electronic Data Interchange (EDI) EDIFACT Web-EDI XML

Paperless production zéro papier

Enterprise Enterprise Resource Resource PlanningPlanning


169


Enterprise Resource Planning (ERP)

• Organizes and manages a company’s business processes by sharing information across functional areas

• Connects with supply-chain and customer management applications

170


ERP Modules

Figure 12.1

171


ERP’s Central DatabaseFinance &

Accounting

Sales & Marketing

Human Resources

Production & Materials

ManagementERP Data

Repository

Figure 12.2

172


ERP Implementation

• First step is to analyze business processes– Which processes have the biggest impact on

customer relations?– Which process would benefit the most from

integration?– Which processes should be standardized?

• Use of Internet portals can aid implementation

173


Customer Relationship Management (CRM)

• Plans and executes business processes that involve customer interaction

• Changes focus from managing products to managing customers

• Point-of-sale data is analyzed for patterns used to predict future behavior

174


Supply Chain Management

• Supply chain planning

• Supply chain execution

• Supplier relationships

• Distinctions between ERP and SCM are becoming increasingly blurred

175


Collaborative Product Commerce (CPC)

• New product design and development and product life cycle management

• Integrates customers and suppliers in the design process though the entire product life cycle

176


Collaborative Product Commerce (CPC)

Customer Relationship Management

(CRM)

Enterprise Resource Planning

(ERP)

Collaborative Product

Commerce (CPC)


(SCM)

Tim

e to

Mar

ket

Tim

e to C

usto

mer

Customers

Product Design

Suppliers

Collaborative Design

Collaborative Design

Manufacture &

DeliveryCollaborative Manufacture

Collaborative Manufacture

DFMA

Figure 12.3

177


Connectivity

• A very difficult problem

• Enterprise Application Integration (EAI) solutions

• EDI is being replaced by XML

• A continuing issue

178


ERP and MRP

• MRP (material requirements planning) was the precursor to ERP

• Primarily a production planning and control system

• MRP evolved to MRP II (manufacturing resource planning)

• ERP and ERP II continue to extend the links through all business processes

179


Material Requirements Planning

Computerized inventory control and production planning system

Schedules component items when they are needed - no earlier and no later

180


When to Use MRP

• Dependent and discrete items

• Complex products

• Job shop production

• Assemble-to-order environments

181


Demand Characteristics

1 2 3 4 5Week

400 –

300 –

200 –

100 –

No

. of

tab

les

Continuous demand

M T W Th F M T W Th F

400 –

300 –

200 –

100 –

No

. of

tab

les

Discrete demand

Independent demand

100 tables

Dependent demand

100 x 1 = 100 tabletops

100 x 4 = 400 table legs

Figure 12.4

182


Material Requirements Planning

Materialrequirements

planning

Planned order

releases

Work orders

Purchase orders

Rescheduling notices

Itemmaster

file

Productstructure

file

Master production schedule

Figure 12.5

183


Master Production Schedule

• Drives MRP process with a schedule of finished products

• Quantities represent production not demand• Quantities may consist of a combination of

customer orders and demand forecasts• Quantities represent what needs to be produced,

not what can be produced

184


Master Production Schedule

PERIODMPS ITEM 1 2 3 4 5

Clipboard 85 95 120 100 100Lapdesk 0 50 0 50 0Lapboard 75 120 47 20 17Pencil Case 125 125 125 125 125

185


Product Structure Tree

Top clip (1) Bottom clip (1)

Pivot (1) Spring (1)

Rivets (2)Finished clipboard Pressboard (1)

Clipboard

Figure 12.6

186


Product Structure Tree

Clipboard Level 0

Level 1

Level 2Spring

(1)Bottom Clip

(1)Top Clip

(1)Pivot

(1)

Rivets (2)

Clip Ass’y (1)

Pressboard (1)

Figure 12.6

187


Indented Bill of Material

0 - - - - Clipboard ea 1- 1 - - - Clip Assembly ea 1- - 2 - - Top Clip ea 1- - 2 - - Bottom Clip ea 1- - 2 - - Pivot ea 1- - 2 - - Spring ea 1- 1 - - - Rivet ea 2- 1 - - - Press Board ea 1

LEVEL ITEM UNIT OF MEASURE QUANTITY

188


Specialized BOMS

• Phantom bills– Transient subassemblies– Never stocked– Immediately consumed in next stage

• K-bills– Group small, loose parts under pseudo-item

number– Reduces paperwork

189


Specialized BOMS

• Modular bills– Product assembled from major subassemblies

& customer options– Modular bill kept for each major subassembly– Simplifies forecasting & planning– X10 Automobile example

• 3 x 8 x 3 x 8 x 4 = 2,304 configurations• 3 + 8 + 3 + 8 + 4 = 26 modular bills

190


4-Cylinder (.40) Bright red (.10) Leather (.20) Grey (.10) Sports coupe (.20)

6-Cylinder (.50) White linen (.10) Tweed (.40) Light blue (.10) Two-door (.20)

8-Cylinder (.10) Sulphur yellow (.10) Plush (.40) Rose (.10) Four-door (.30)

Neon orange (.10) Off-white (.20) Station wagon (.30)

Metallic blue (.10) Cool green (.10)

Emerald green (.10) Black (.20)

Jet black (.20) Brown (.10)

Champagne (.20) B/W checked (.10)

X10Automobile

Engines Exterior color Interior Interior color Body(1 of 3) (1 of 8) (1 of 3) (1 of 8) (1 of 4)

Modular Bills of Material

Figure 12.7

191


Item Master File

DESCRIPTION INVENTORY POLICY

Item Pressboard Lead time 1

Item no. 734 Annual demand 5000

Item type Purch Holding cost 1

Product/sales class Comp Ordering/setup cost 50

Value class B Safety stock 0

Buyer/planner RSR Reorder point 39

Vendor/drawing 07142 EOQ 316

Phantom code N Minimum order qty 100

Unit price/cost 1.25 Maximum order qty 500

Pegging Y Multiple order qty

LLC 1 Policy code 3

Table 12.4

192


Item Master File

PHYSICAL INVENTORY USAGE/SALES

CODES

On hand 100 YTD usage/sales 1100Location W142 MTD usage/sales 75On order 100 YTD receipts 1200Allocated 75 MTD receipts 0Cycle 3 Last receipt 8/25Last count 9/5 Last issue 10/5Difference -2

Cost acct. 00754Routing 00326Engr 07142

Table 12.4

193


1. Exploding the bill of material

2. Netting out inventory

3. Lot sizing

4. Time-phasing requirements

Basic MRP Processes

194


ITEM NAME OR NO. LLC LOW LEVEL CODE PERIODLOT SIZE QTY. MADE IN LT LEAD TIME 1 2 3 4 5

The MRP Matrix

When orders need to be placed to be received on time

Planned Order Releases

When orders need to be receivedPlanned Order Receipts

Gross requirements net of inventory and scheduled receipts

Net Requirements

Beg Inv Anticipated quantity on hand at the end of the period

Projected on Hand

On order and scheduled to be received

Scheduled Receipts

Derived from MPS or planned order releases of the parent(s)

Gross Requirements

Table 12.5

195


School Mate ProductsMaster Production Schedule

1 2 3 4 5

Clipboard 85 95 120 100 100Lapdesk 0 60 0 60 0

Example 12.1

Item Master File

CLIPBOARD LAPDESK PRESSBOARDOn hand 25 20 150On order 175 (Period 1) 0 0 (scheduled receipts)LLC 0 0 1Lot size L4L Mult 50 Min 100Lead time 1 1 1

196


School Mate Products

Example 12.1

Product Structure Record

Clipboard

Lapdesk

Pressboard(2)

Trim(3’)

Beanbag(1)

Glue(4 oz)

Level 0

Level 0

Pressboard(1)

Clip Ass’y(1)

Rivets(2) Level 1

Level 1

197



Example 12.1

ITEM: CLIPBOARDLLC: 0 PERIOD

LOT SIZE: L4L LT: 1 1 2 3 4 5Gross Requirements 85 95 120 100 100

Scheduled Receipts 175

Projected on Hand 25

Net Requirements

Planned Order Receipts


198







Net Requirements 0



(25 + 175) = 200 units available

199






Projected on Hand 25 115

Net Requirements 0



(25 + 175) = 200 units available(200 - 85) = 115 on hand at the end of Period 1

200






Projected on Hand 25 115 20

Net Requirements 0 0



115 units available at the beginning of Period 1(115 - 95) = 20 on hand at the end of Period 2

201






Projected on Hand 25 115 20 0 0 0

Net Requirements 0 0 100



20 units available at the beginning of Period 3(20 - 120) = -100 Since this result is negative, it means that 100 additional Clipboards are required at the beginning of Period 3

202








Planned Order Receipts 100


Since the lot size for this item is L4L, we plan to have an order receipt of 100 additional Clipboards at the beginning of Period 3

203



Example 12.1






Planned Order Receipts 100

Planned Order Releases 100

Since the LT for this item is 1 period, we plan to place this order at the beginning of Period 2 so that it received at the beginning of Period 3. This is known as the lead time offset

204







Net Requirements 0 0 100 100 100

Planned Order Receipts 100 100 100

Planned Order Releases 100 100 100

Following the same logic, use the Gross Requirements in Periods 4 and 5 and develop Net Requirements, Planned Order Receipts, and Planned Order Releases

205



Example 12.1

ITEM: LAPDESKLLC: 0 PERIOD

LOT SIZE: MULT 50LT: 1 1 2 3 4 5Gross Requirements 0 60 0 60 0

Scheduled Receipts


Net Requirements



206



Example 12.1

ITEM: LAPDESKLLC: 0 PERIOD

LOT SIZE: MULT 50LT: 1 1 2 3 4 5Gross Requirements 0 60 0 60 0

Scheduled Receipts



Planned Order Receipts 50 50

Planned Order Releases 50 50

Following the same logic, the Lapdesk MRP matrix is completed as shown

207



Example 12.1

ITEM: PRESSBOARDLLC: 0 PERIOD

LOT SIZE: MIN 100 LT: 1 1 2 3 4 5Gross RequirementsScheduled ReceiptsProjected on Hand 150Net RequirementsPlanned Order ReceiptsPlanned Order Releases

ITEM: CLIPBOARD LLC: 0 PERIOD

LOT SIZE: L4L LT: 1 1 2 3 4 5


ITEM: LAPDESK LLC: 0 PERIOD

LOT SIZE: MULT 50 LT: 1 1 2 3 4 5


208



Example 12.1


LOT SIZE: MIN 100 LT: 1 1 2 3 4 5Gross Requirements 100 100 200 100 0Scheduled ReceiptsProjected on Hand 150Net RequirementsPlanned Order ReceiptsPlanned Order Releases


LOT SIZE: L4L LT: 1 1 2 3 4 5



LOT SIZE: MULT 50 LT: 1 1 2 3 4 5


x2 x2

x1 x1x1

209



Example 12.1


LOT SIZE: MIN 100 LT: 1 1 2 3 4 5Gross Requirements 100 100 200 100 0Scheduled ReceiptsProjected on Hand 150 50 50 0 0 0Net Requirements 50 150 100Planned Order Receipts 100 150 100Planned Order Releases 100 150 100


LOT SIZE: L4L LT: 1 1 2 3 4 5



LOT SIZE: MULT 50 LT: 1 1 2 3 4 5


210



Example 12.1

Planned Order Report

PERIOD

ITEM 1 2 3 4 5

Clipboard 100 100 100

Lapdesk 50 50

Pressboard 100 150 100

211


MRP Outputs

• Planned orders– Work orders– Purchase orders

• Changes to previous plans or existing schedules– Action notices– Rescheduling notices

212


Planned Order Report

Table 12.6

Item #2740 Date 9 - 25 - 02On hand 100 Lead time 2 weeksOn order 200 Lot size 200Allocated 50 Safety stock 50

SCHEDULED PROJECTEDDATE ORDER NO. GROSS REQS. RECEIPTS ON HAND ACTION

509-26 AL 4416 25 259-30 AL 4147 25 010-01 GR 6470 50 - 5010-08 SR 7542 200 150 Expedite SR 10-0110-10 CO 4471 75 7510-15 GR 6471 50 2510-23 GR 6471 25 010-27 GR 6473 50 - 50 Release PO 10-13

Key: AL = allocated WO = work orderCO = customer order SR = scheduled receiptPO = purchase order GR = gross requirement

213


MRP Action Report

Table 12.7

Current date 9-25-02

ITEM DATE ORDER NO.QTY. ACTION#2740 10-08 7542 200 Expedite SR 10-01

#3616 10-09 Move forward PO 10-07

#2412 10-10 Move forward PO 10-05

#3427 10-15 Move backward PO 10-25

#2516 10-20 7648 100 De-expedite SR 10-30

#2740 10-27 200 Release PO 10-13

#3666 10-31 50 Release WO 10-24

214


Capacity Requirements Planning (CRP)

• Computerized system that projects load from material plan

• Creates load profile

• Identifies underloads and overloads

215


Capacity

Usually expressed as standard machine hours or labor hours

Capacity = (no. machines or workers)x (no. shifts) x (utilization)x (efficiency)

216


Capacity Terms

• Load profile– Compares released and planned orders with

work center capacity

• Capacity– Productive capability; includes utilization and

efficiency

• Utilization– Percentage of available working time spent

working

217


More Capacity Terms

• Efficiency• Load

– The standard hours of work assigned to a facility

• Load percent– The ratio of load to capacity

Load percent = (load/capacity)x100%

218


Capacity Requirements Planning

MRP plannedorder

releases

Routingfile

Capacityrequirements

planning

Openorders

file

Load profile foreach machine center

Figure 12.8

219


Determining Loads and Capacities

2 copiers, 2 operators5 days/wk, 8 hr/day1/2 hr meals, 1/2 hr maintenance per day

Efficiency = 100%Utilization = 7/8 = 87.5%Daily capacity = 2 machines x 2 shifts

x 8 hours/shift x 100% efficiencyx 87.5% utilization= 28 hours or 1,680 minutes

Example 12.2

220


Add another shift:Daily capacity = 2 machines x 3 shifts x 8 hours/shift

x 100% efficiency x 87.5% utilization= 42 hours or 2,520 minutes

Revised load percent = 2,385.7/2,520 = 0.9467x100% = 94.67%

Determining Loads and Capacities

JOB NO. OF SETUP RUN TIMENO. COPIES TIME (MIN) (MIN/UNIT) TOTAL TIME10 500 5.2 0.08 5.2 + (500 x 0.08) = 45.220 1,000 10.6 0.10 10.6 + (1,000 x 0.10) = 110.630 5,000 3.4 0.12 3.4 + (5,000 x 0.12) = 603.440 10,000 11.2 0.14 11.2 + (10,000 x 0.14) =1,411.250 2,000 15.3 0.10 15.3 + (2,000 x 0.10) = 215.3

2,385.7 min

Load percent = 2,385.7 / 1,680 = 1.42 x 100% = 142%

221


Initial Load Profile

Figure 12.9

Ho

urs

of

cap

acit

y

1 2 3 4 5 6Time (weeks)

Normalcapacity

120 –

110 –

100 –

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 –

222


Remedies for Underloads

1. Acquire more work

2. Pull work ahead that is scheduled for later time periods

3. Reduce normal capacity

223


Remedies for Overloads

1. Eliminate unnecessary requirements2. Reroute jobs to alternative machines or work

centers3. Split lots between two or more machines4. Increase normal capacity5. Subcontract6. Increase the efficiency of the operation7. Push work back to later time periods8. Revise master schedule

224


Adjusted Load Profile

Figure 12.10

Ho

urs

of

cap

acit

y

1 2 3 4 5 6Time (weeks)

Normalcapacity

120 –

110 –

100 –

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 –

Pull aheadPush back

Push backOvertime

Work an

extra shift

225


Relaxing MRP Assumptions

• Material is not always the constraining resource

• Lead times can vary• Not every transaction needs to be recorded• JIT can be used with MRP• The shop floor may require a more

sophisticated scheduling system

226


Manufacturing Resource Planning (MRP II)

Forecast Aggregate production

plan

Customer orders

Feasible?


Material requirements planning

Capacity requirements planning

Feasible?

Purchase orders

Work orders

Inventory Shop floor control

Manufacture

NoNo

YesYes

FeedbackFeedback

NoNo

YesYes

Figure 12.11

227




plan

Customer orders

Feasible?




Feasible?

Purchase orders

Work orders


Manufacture

NoNo

YesYes

FeedbackFeedback

NoNo

YesYes

Figure 12.11


plan

Customer orders

Feasible?


NoNo

YesYes

228




plan

Customer orders

Feasible?




Feasible?

Purchase orders

Work orders


Manufacture

NoNo

YesYes

FeedbackFeedback

NoNo

YesYes

Figure 12.11




Feasible?

YesYes

NoNo

229



plan

Customer orders

Feasible?




Feasible?

Purchase orders

Work orders


Manufacture

NoNo

YesYes

FeedbackFeedback

NoNo

YesYes


Figure 12.11


Manufacture

Purchase orders

Work orders

230


Enterprise Software

Collect, analyze, and make decisions based on Collect, analyze, and make decisions based on datadata

ERP - Enterprise Resource PlanningERP - Enterprise Resource PlanningManaging wide range of processesManaging wide range of processes

Human resources, materials management, Human resources, materials management, supply chains, accounting, finance, manufacturing, supply chains, accounting, finance, manufacturing, sales force automation, sales force automation, customer service, customer order entrycustomer service, customer order entry

Finding hidden patterns through data miningFinding hidden patterns through data mining

231


Advanced Communications

Electronic data interchange (EDI)Electronic data interchange (EDI) Internet, extranetsInternet, extranets Wireless communicationsWireless communications Teleconferencing & Teleconferencing &

telecommutingtelecommuting Bar coding, RFTBar coding, RFT Virtual realityVirtual reality

232


Manufacturing Technology

Numerically controlled (NC) machinesNumerically controlled (NC) machinesControlled by punched tapeControlled by punched tape

Computer numerical controlled (CNC)Computer numerical controlled (CNC)Controlled by attached computerControlled by attached computer

Direct numerical control (DNC)Direct numerical control (DNC)Several NC machines controlled by single Several NC machines controlled by single

computercomputerFlexible manufacturing systems (FMS)Flexible manufacturing systems (FMS)

Includes automated material handlingIncludes automated material handling

233


Automated Material Handling

ConveyorsConveyorsAutomated guided Automated guided

vehicle (AGV)vehicle (AGV)Automated storage & Automated storage &

retrieval system retrieval system (ASRS)(ASRS)

234


Flexible Manufacturing Systems (FMS)

Programmable machine toolsProgrammable machine tools Controlled by common computer networkControlled by common computer network Combines flexibility with efficiencyCombines flexibility with efficiency Reduces setup & queue timesReduces setup & queue times

235


Flexible Manufacturing System

Parts

Finishedgoods

Computercontrolroom

TerminalTerminal

CNC Machine

CNC Machine

PalletPallet

Automatic Automatic tool changertool changer


236


RoboticsProgrammable manipulatorsProgrammable manipulatorsFollow specified pathFollow specified pathBetter than humans with respect to Better than humans with respect to

Hostile environmentsHostile environmentsLong hoursLong hoursConsistencyConsistency

Adoption has been slowed by Adoption has been slowed by ineffective integration and ineffective integration and adaptation of systemsadaptation of systems

237


SCM

No Breakdown

(Total Productive Maintenance)

238


SCM

« one stitch in time saves nine » No Breakdown

Mean Time Between Failure (MTBF) Mean Time to Repair (MTTR) Corrective, curative, predictive maintenance

Course by J.PONS

Evolution of the concept of logistics

From Logistics to SCM


240


Original Process Layout

CA B Raw materials

Assembly

1

2

3

4

5

6 7

8

9

10

11

12


241


Cellular Layout


3

6

9

Assembly

12

4

8 10

5

7

11

12

A B CRaw materials

Cell 1 Cell 2 Cell 3

242


SCM

No scorn (contempt, disdain)

empowerment enablement enlargment

collaborative relationship

Course by J.PONS

Strategic logistics


244


Ideal Position of the logistics Ideal Position of the logistics function to face the challengefunction to face the challenge

245


Supply Chain ManagementSupply Chain Management

R & D Conception

Human Resources Purchasing Suppliers

Board

Finance Production Plant

Quality Logistics Distribution B to B

Marketing Client B to C

ERPERP

SCMSCM

Fonctional linksFonctional linksOperational linksOperational linksInformation links

APSAPS

246


247


Blue Banana

• The so-called « Blue Banana » belt constitutes the economic heart of the European Community, accounting for 2/3 of GNP.

• The regions of France (the North, the East, and the Southeast) are well placed on its periphery as sites for logistics platforms, being less congested than areas within it.

248


II. Aircraft CompaniesIntern’l traffic

Lufthansa (6,5 MTK)


Singapore AL (5,4)

AF (4,7)

BA

JAL

FedEx

KLM

Cathay Pacific

United A

Northwest

Nippon Cargo

UPS (15)

National traffic

FedEx (6,054)

UPS (4 232)

United A (0,958)

Northwest A (0,765)

AA

FedEx

Delta A L

ANA

China Southern A

JAL

Varig

Air Canada

China Eastern A

Total traffic

FedEx (14 632) (100%)

AF + KLM (9 059)

UPS (7 295) (100%)

Lufhansa (7 158) (14%)

Singapore (6 909) (24%)

Korean (6 247) (29%)

JAL (5 024) (10%)

AF (4 862) (25%)

Cathay (4 854) (28%)

China (4 600) (39%)

BA (4 210) (6%)

KLM (4 197) (16%)

Cargolux (4 157) (98%)

United A (3658) (5%)

Northwest (3 578) (8%)

249


II. Accident rates since 1990

Aero PeruCubanaAir ZimbabweChina AirlineRoyal JordanianTurkish AirlinesAir IndiaEgypt AirAir Tran (Value Jet) USAKorean Airways

• 16,7 accidents/1 million of flight

• 15,2• 12,5• 10• 8,82• 7,3• 6,82• 6,67• 5,88• 5,38

250


III. Traveler’s Airport(in Mio travelers)

• Atlanta Hartsfield• Chicago O’Hare• LA• London• Dallas• Tokyo Haneda• Francfurt• San Francisco• Paris CDG• Denver

• 73,5 • 72,5• 61,2• 60,6• 60,4• 51,5• 42,7• 40,1• 38,7• 36,8• (Source : Airports Council I’l)

251


III.Freight Airports (in MT 2000)

• Memphis (Headoffice of Fedex)• HK• LA• Tokyo• NY (JFK)• Anchorage• Seoul• Miami• Francfort• Chicago• Singapour• Louisville• London (LHR)• Paris (CDG)• Amsterdam

• 2,412• 1,989• 1,952• 1,841• 1,737• 1,676• 1,655• 1,651• 1,539• 1,532• 1,523• 1,486• 1,355• 1,226• 1,225 (Source:Airports Council I’l)

252


IX. Integrators

FedEx• Created in 1973• 3,3 m colis/day towards 210

countries• 200 000 employees• 43 800 warehouses &10 hubs• 663 plains• 44 500 vehicules• Turn over 19 M$ in 2001• Network : Memphis, Subic

Bay, Dubaï, Paris.

UPS• Created in 1919• 11,5 m colis/day towards

200 countries• 362 800 employees• 1713 warehouses & 15

hubs• 500 plains• 157 000 vehicules• Turn over 24,8 M$

253


IX. Integrator

DHL

• Created in 1970

• 228 countries

• 63 552 employees

• 3002 agences et 35 hubs

• 252 plains

• 18 576 vehicules

• EDI Connection

• Turn over : 0,2 m$

254


Contribution of Logistics to the value Contribution of Logistics to the value of the productsof the products

Logistics & MarketingLogistics & Marketing

Logistics is a Logistics is a success key factorsuccess key factor for : for :

Availibility,Availibility, Timeliness,Timeliness, Delivery in good condition,Delivery in good condition, ResponsivenessResponsiveness Time to marketTime to market

= Logistics and 7 "R"s= Logistics and 7 "R"s

255


Supply Chain MangementSupply Chain Mangementstrategical logisticsstrategical logistics

Mission of a Logistician To set the level of logistics activities so as to

make products and services available to customers :

- at the time, place and in the condition and form desired

_ in the most profitable or cost-effective way.

256


Business Logistics definedBusiness Logistics definedscope and contentscope and content

Customer service standards set the level Customer service standards set the level of output and degree of readiness to of output and degree of readiness to which the logistics system must which the logistics system must respondrespond

Logistics costs increase in proportion to Logistics costs increase in proportion to the level of customer service providedthe level of customer service provided

257


SCM

Operationnal logistics

Logistics entails in 5 layers

258


SCM and LOGISTICSSCM and LOGISTICS

R & D Conception

Purchasing Suppliers

Production

Plant

Logistics

Marketing Distribution B to B

upperdown logistics

Client B to CFonctional linksFonctional linksOperational linksOperational linksInformation links

BoardBoard

Upperstream LogUpperstream Log

Upstream LogUpstream Log

Internal LogInternal Log

Downstream LogDownstream LogEEDDII

EEDDII

PPuullll

PPuullll

259


SCM

Downstream logistics : «last mile » (B2C)Downstream logistics & DRP (B2B) tools : ECR, CRM,CPFR, JIT, CMI, VMI

Internal logistics MRP2, JIT, KANBAN, POKA YOKE, JIDOKA, SMED, OTED, TAKTIME

Upstream LogisticsUpperstream logistics (simultaneous and concurrent

logistics, Value analysis) & reverse logistics

260


«Last mile» logistics

• Modern logistics alters the relationship between the producer and the end user of a product, by making it possible to do without intermedaries.

• However, this brings new constraints to bear on the supply chain.

261


SCM

Upperstream logistics

• simultaneous and concurrent logistics,

• Value analysis • Design for cost

& reverse logistics

262


LOGISTICS TOOLSLOGISTICS TOOLS R & D Conception


Production Plant

Logistics Distribution

Marketing


BoardBoard

EEDDII

JITJITECRECRCRCRMMDRPDRP

JIT, Kanban, JIT, Kanban, JidokaJidokaPoka, Yoké, MRP2...Poka, Yoké, MRP2...

SRSRMM

RReevveerrssee

LLooggiissttiiccss

TTQQMM QQFFDD

AABBCC

Concurrent Concurrent engineeringengineeringsimultaneous simultaneous engineeringengineering

263


Third Party LogisticsThird Party Logistics R & D Conception

Purchasing

Production Suppliers

Logistics

Plant

Marketing

Distribution


BoardBoard Logistics Logistics providersproviders

Performance Performance metricsmetrics

EDIEDI

Concurrent Concurrent engineeringengineeringsimultaneous simultaneous engineeringengineeringreverse logisticsreverse logistics

Co-manufacturing, Co-manufacturing, crossdockingcrossdockingco-packing, warehousingco-packing, warehousing

Continuous replenishment, carrier Continuous replenishment, carrier selection & rate negotiation, shipment selection & rate negotiation, shipment planning, order processing, packaging, planning, order processing, packaging, product return, e-tradeproduct return, e-trade

264


Logistics & MarketingLogistics & MarketingKey activitiesKey activities

customer service standardscustomer service standards

Key activities (in every logistics channels)Key activities (in every logistics channels)Customer service standards : cooperate with Customer service standards : cooperate with

marketing tomarketing to Determine customer needs and wants for Determine customer needs and wants for

logistics customer servicelogistics customer service Determine customer response to service (ECR)Determine customer response to service (ECR) Set customer service levelsSet customer service levels

265


Product Design

Specifies materialsSpecifies materialsDetermines dimensions & Determines dimensions &

tolerancestolerancesDefines appearanceDefines appearanceSets performance Sets performance

standardsstandards

266


Service Design

Specifies what the customer is to Specifies what the customer is to experienceexperience Physical itemsPhysical items Sensual benefitsSensual benefits Psychological Psychological

benefitsbenefits

267


An Effective Design Process

Matches product/service characteristics Matches product/service characteristics with customer needswith customer needs

Meets customer requirements in simplest, Meets customer requirements in simplest, most cost-effective mannermost cost-effective manner

Reduces time to marketReduces time to market Minimizes revisionsMinimizes revisions

268


Stages in the Design Process

Idea GenerationIdea Generation — Product/Service Concept— Product/Service ConceptFeasibility StudyFeasibility Study — Performance — Performance

SpecificationsSpecificationsPreliminary DesignPreliminary Design — Prototype— PrototypeFinal DesignFinal Design — Final Design Specifications— Final Design SpecificationsProcess PlanningProcess Planning — Manufacturing — Manufacturing

SpecificationsSpecifications

269


The Design Process

Pilot runand final tests

New product or service launch

Final designFinal design& process & process plansplans

Ideageneration

Feasibilitystudy

Product or Product or service service conceptconcept

Performance Performance specificationsspecifications

Functionaldesign

Form design

Production design

Revising and Revising and testing prototypestesting prototypes

Design Design specificationsspecifications

Manufacturing Manufacturing or delivery or delivery specificationsspecifications

SuppliersSuppliersR&DR&D

CustomersCustomers

MarketingMarketing CompetitorsCompetitors


270


Idea Generation Suppliers, distributors, salespersonsSuppliers, distributors, salespersons Trade journals and other published materialTrade journals and other published material Warranty claims, customer Warranty claims, customer

complaints, failurescomplaints, failures Customer surveys, focus Customer surveys, focus

groups, interviewsgroups, interviews Field testing, trial usersField testing, trial users Research and developmentResearch and development

271


More Idea Generators

Perceptual MapsPerceptual Maps Visual comparison of Visual comparison of

customer perceptionscustomer perceptions

BenchmarkingBenchmarking Comparing product/service Comparing product/service

against best-in-classagainst best-in-class

Reverse engineeringReverse engineering Dismantling competitor’s product to improve your Dismantling competitor’s product to improve your

own productown product

272


Feasibility Study

Market AnalysisMarket Analysis Economic AnalysisEconomic Analysis Technical / Strategic AnalysisTechnical / Strategic Analysis Performance SpecificationsPerformance Specifications

273


Preliminary Design

Create form & functional designCreate form & functional designBuild prototypeBuild prototypeTest prototypeTest prototypeRevise prototypeRevise prototypeRetestRetest

274


Form Design(How the Product Looks)

Cellular Personal Cellular Personal Safety AlarmSafety Alarm Personal ComputerPersonal Computer

275


Functional Design(How the Product Performs)

ReliabilityReliability Probability product performs intended Probability product performs intended

function for specified length of time under function for specified length of time under normal conditions of usenormal conditions of use

MaintainabilityMaintainability Ease and/or cost or maintaining/repairing Ease and/or cost or maintaining/repairing

productproduct

276


Computing Reliability

0.90 0.90 0.90 x 0.90 = 0.810.90 x 0.90 = 0.81

1-[(1-.95)(1-.90)]=1-[(1-.95)(1-.90)]=1-[(.05)(.10)]=1-[(.05)(.10)]=1-[.005]=.9951-[.005]=.995

Components in seriesComponents in series

Components in parallelComponents in parallel

0.95

0.90RR22

RR11

Original

Backup

277


Other Measures of Reliability/Maintainability

• Mean time between failures (MTBF) – length of time a product or service is in operation before it fails

• Maintainability (Serviceability) – ease and/or cost with which the product or service is maintained or repaired– Mean time to repair (MTTR)– System Availability

278


Production Design

How will the product be made?How will the product be made? Part of the preliminary design phasePart of the preliminary design phase SimplificationSimplification StandardizationStandardization ModularityModularity

279


Design Simplification(a) The original design(a) The original design

Assembly using Assembly using common fastenerscommon fasteners

(b) Revised design(b) Revised design

One-piece base & One-piece base & elimination of elimination of fastenersfasteners

(c) Final design(c) Final design

Design for Design for push-and-snap push-and-snap assemblyassembly


280


Final Design & Process Plans

Produce detailed drawings & specificationsProduce detailed drawings & specifications Create workable instructions for manufactureCreate workable instructions for manufacture Select tooling & equipmentSelect tooling & equipment Prepare job descriptionsPrepare job descriptions Determine operation & assembly orderDetermine operation & assembly order Program automated machinesProgram automated machines

281


Improving the Design Process

Design teamsDesign teams Concurrent designConcurrent design Design for manufacture & assemblyDesign for manufacture & assembly Design to prevent failures and ensure valueDesign to prevent failures and ensure value Design for environmentDesign for environment Measure design qualityMeasure design quality Utilize quality function deploymentUtilize quality function deployment Design for robustnessDesign for robustness Engage in collaborative designEngage in collaborative design

282


Figure 3.4 Breaking Down Barriers to Effective Design

283


Design Teams

Marketing, manufacturing, Marketing, manufacturing, engineeringengineering

Suppliers, dealers, customersSuppliers, dealers, customersLawyers, accountants, Lawyers, accountants,

insurance companiesinsurance companies

284


Concurrent Design

Improves quality of early design Improves quality of early design decisionsdecisions

Design decisions overlapDesign decisions overlap Decentralized - suppliers complete Decentralized - suppliers complete

detailed design detailed design Incorporates production processIncorporates production process Often uses a price-minus systemOften uses a price-minus system Scheduling and management can be Scheduling and management can be

complex as tasks are done in parallelcomplex as tasks are done in parallel

285


General Performance Specifications

Instructions to supplier:Instructions to supplier: ““Design a set of brakes that can stop a 2200 pound car Design a set of brakes that can stop a 2200 pound car

from 60 miles per hour in 200 feet ten times in from 60 miles per hour in 200 feet ten times in succession without fading. The brakes should fit into succession without fading. The brakes should fit into a space 6” x 8” x 10” at the end of each axle and be a space 6” x 8” x 10” at the end of each axle and be delivered to the assembly plant for $40 a set.”delivered to the assembly plant for $40 a set.”

Supplier submits design specifications and Supplier submits design specifications and prepares a prototype for testingprepares a prototype for testing

286


Design for Manufacture and Assembly

Design a product for easyDesign a product for easy& economical production& economical production

Incorporate production Incorporate production design early in the design phasedesign early in the design phase

Improves quality and reduces costs Improves quality and reduces costs Shortens time to design and manufactureShortens time to design and manufacture

287


DFM Guidelines

1.1. Minimize the number of parts, tools, Minimize the number of parts, tools, fasteners, and assembliesfasteners, and assemblies

2.2. Use standard parts and repeatable processesUse standard parts and repeatable processes3.3. Modular designModular design4.4. Design for ease of assembly, minimal Design for ease of assembly, minimal

handlinghandling5.5. Allow for efficient testing and parts Allow for efficient testing and parts

replacementreplacement

288


Design for Assembly (DFA)

Procedure for reducing number Procedure for reducing number of partsof parts

Evaluate methods for assemblyEvaluate methods for assembly Determine assembly sequenceDetermine assembly sequence

289


Design ReviewFailure Mode and Effects Analysis Failure Mode and Effects Analysis

(FMEA)(FMEA)A systematic approach for analyzing A systematic approach for analyzing

causes & effects of failurescauses & effects of failuresPrioritizes failuresPrioritizes failuresAttempts to eliminate causesAttempts to eliminate causes

Fault Tree Analysis (FTA)Fault Tree Analysis (FTA)Study interrelationship between failuresStudy interrelationship between failures

290


Figure 3.5 Fault Tree for Potato Chips

291


FMEA for Potato Chips

StaleStale Low moisture content, Low moisture content, expired shelf life, poor expired shelf life, poor packagingpackaging

Tastes bad, won’t crunch, Tastes bad, won’t crunch, thrown out, lost salesthrown out, lost sales

Add m cure longer, Add m cure longer, better package seal, better package seal, shorter shelf lifeshorter shelf life

BrokenBroken Too thin, too brittle, Too thin, too brittle, rough handling, rough rough handling, rough use, poor packaginguse, poor packaging

Can’t dip, poor display, Can’t dip, poor display, injures mouth, chocking, injures mouth, chocking, perceived as old, lost perceived as old, lost salessales

Change recipe, change Change recipe, change process, change process, change packagingpackaging

Too SaltyToo Salty Outdated receipt, process Outdated receipt, process not in control, uneven not in control, uneven distribution of saltdistribution of salt

Eat less, drink more, Eat less, drink more, health hazard, lost saleshealth hazard, lost sales

Experiment with recipe, Experiment with recipe, experiment with process, experiment with process, introduce low salt introduce low salt versionversion

FAILUREFAILUREMODEMODE CAUSE OF FAILURECAUSE OF FAILURE EFFECT OF FAILUREEFFECT OF FAILURE CORRECTIVE ACTIONCORRECTIVE ACTION

Table 3.1Table 3.1

292


Value Analysis (Value Engineering)

Improve the ratio of value/costImprove the ratio of value/cost Assessment of value : Assessment of value :

1. Can we do without it?1. Can we do without it?

2. Does it do more than is required?2. Does it do more than is required?

3. Does it cost more than it is worth?3. Does it cost more than it is worth?

4. Can something else do a better job4. Can something else do a better job

5. Can it be made by less costly method, tools, material?5. Can it be made by less costly method, tools, material?

6. Can it be made cheaper, better or faster by someone else?6. Can it be made cheaper, better or faster by someone else?

293


Design for Environment

Design from recycled materialDesign from recycled material Use materials which can be recycledUse materials which can be recycled Design for ease of repairDesign for ease of repair Minimize packagingMinimize packaging Minimize material & energy Minimize material & energy

used during manufacture, consumption used during manufacture, consumption & disposal& disposal

294


Figure 3.6 Design for Environment

295


Metrics for theQuality of Design

1.1. Percent of revenue from new products or Percent of revenue from new products or servicesservices

2.2. Percent of products capturing 50% or Percent of products capturing 50% or more of the marketmore of the market

3.3. Percent of process initiatives yielding a Percent of process initiatives yielding a 50% or more improvement in 50% or more improvement in effectivenesseffectiveness

4.4. Percent of suppliers engaged in Percent of suppliers engaged in collaborative designcollaborative design

296


Metrics for theQuality of Design

5.5. Percent of parts that can be recycledPercent of parts that can be recycled6.6. Percent of parts used in multiple productsPercent of parts used in multiple products7.7. Average number of components per Average number of components per

productproduct8.8. Percent of parts with no engineering Percent of parts with no engineering

change orderschange orders9.9. Things gone wrongThings gone wrong

297


Quality Function Deployment (QFD)

Translates the “voice of the customer” into Translates the “voice of the customer” into technical design requirementstechnical design requirements

Displays requirements in matrix diagramsDisplays requirements in matrix diagrams First matrix called “house of quality”First matrix called “house of quality” Series of connected housesSeries of connected houses

298


House of Quality

Trade-off matrix

Design characteristics

Customer requirements

Target values

Relationship matrix

Competitive assessment

Imp

ort

ance

11 22

33

44

55

66


299


House of Quality Figure 3.8Figure 3.8

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Competitive Assessment

Customer RequirementsCustomer Requirements 1 2 3 4 5

Presses quickly 9 B A XX

Removes wrinkles 8 AB XX

Doesn’t stick to fabric 6 XX BA

Provides enough steam 8 AB XX

Doesn’t spot fabric 6 XX AB

Doesn’t scorch fabric 9 A XXB

Heats quickly 6 XX B A

Automatic shut-off 3 ABXX

Quick cool-down 3 XX A B

Doesn’t break when dropped 5 AB XX

Doesn’t burn when touched 5 AB XX

Not too heavy 8 XX A B

300



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Customer RequirementsCustomer Requirements

Presses quickly - - + + + -

Removes wrinkles + + + + +

Doesn’t stick to fabric - + + + +

Provides enough steam + + + +

Doesn’t spot fabric + - - -

Doesn’t scorch fabric + + + - +

Heats quickly - - + -

Automatic shut-off +

Quick cool-down - - + +

Doesn’t break when dropped + + + +

Doesn’t burn when touched + + + +

Not too heavy + - - - + -

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Units of measure ft-lb lb in. cm ty ea mm oz/s sec sec Y/N Y/N

Iron A 3 1.4 8x4 2 SS 27 15 0.5 45 500 N Y

Iron B 4 1.2 8x4 1 MG 27 15 0.3 35 350 N Y

Our Iron (X) 2 1.7 9x5 4 T 35 15 0.7 50 600 N Y

Estimated impact 3 4 4 4 5 4 3 2 5 5 3 0

Estimated cost 3 3 3 3 4 3 3 3 4 4 5 2

Targets 1.2 8x5 3 SS 30 30 500

Design changes * * * * * * *

Ob

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303


House of Quality


304


Series of QFD HousesC

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req

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House House of of

qualityquality

Product characteristics

A-1P

rod

uct

ch

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teri

stic

s

Parts Parts deploymentdeployment

Part characteristics

A-2

Par

t ch

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teri

stic

sProcess Process planningplanning

Process characteristics

A-3

Pro

cess

ch

arac

teri

stic

s

Operating Operating requirementsrequirements

Operations

A-4


305


Benefits of QFD Promotes better understanding of customer Promotes better understanding of customer

demandsdemands Promotes better understanding of design Promotes better understanding of design

interactionsinteractions Involves manufacturing in the Involves manufacturing in the

design processdesign process Breaks down barriers between Breaks down barriers between

functions and departmentsfunctions and departments Provides documentation of Provides documentation of

the design processthe design process

306


Robust DesignProduct can fail due to poor design Product can fail due to poor design

qualityqualityProducts subjected to many conditionsProducts subjected to many conditionsRobust design studiesRobust design studies

Controllable factors - under designer’s Controllable factors - under designer’s controlcontrol

Uncontrollable factors - from user or Uncontrollable factors - from user or environmentenvironment

Designs products for consistent Designs products for consistent performanceperformance

Course by J.PONS

Place and importance of Transport in the

SCM process


308


Supply Chain MangementSupply Chain Mangementbusiness logisticsbusiness logistics

Area of management that Area of management that absorbs 30 % of the € sales absorbs 30 % of the € sales

((cost reducerscost reducers)) Essential element to meeting Essential element to meeting

the customer service goals the customer service goals ( ( Fulfillment rateFulfillment rate) )

309


SCM

• Total logistics activities make up 15% of finished product costs broke down as follows :

• Upstream logistics : 29%• Production logistics : 7% • Downstream logistics : 64%

310


SCM

• Transport costs : 34 %• Storage costs (financial, handling, insurance, loss& profit) :

41,3 %• Personal costs : 19 %

• Warehousing (Premises) : 5 %

• Material costs : 0,7 %

311


Business Logistics definedBusiness Logistics definedTransportation & inventoryTransportation & inventory Transportation and inventories are Transportation and inventories are

the primary cost-absorbing logistics the primary cost-absorbing logistics activitiesactivities

They represent together one-half or two-They represent together one-half or two-thirds of the total logistics costs.thirds of the total logistics costs.

Transportation add « place » value to Transportation add « place » value to products and servicesproducts and services

Inventories add «time» value.Inventories add «time» value.

312


Business Logistics Business Logistics Transportation & inventoryTransportation & inventory Without transportation (because of strike for Without transportation (because of strike for

instance), markets cannot be served and instance), markets cannot be served and products back up in the pipe line to detoriate products back up in the pipe line to detoriate or become obsolete.or become obsolete.

Inventories are essential to logistics Inventories are essential to logistics management because it is usually not management because it is usually not possible or practical to provide instant possible or practical to provide instant production or certain delivery times to production or certain delivery times to customers.customers.

Inventories serve as buffers between supply Inventories serve as buffers between supply and demand so that needed product and demand so that needed product availability may be maintened for customers availability may be maintened for customers while providing flexibility for production while providing flexibility for production

313


Key activitiesKey activitiescustomer service standardscustomer service standards

Key activities (in every logistics channels)Key activities (in every logistics channels)Customer service standards : cooperate with Customer service standards : cooperate with

marketing tomarketing to Determine customer needs and wants for Determine customer needs and wants for

logistics customer servicelogistics customer service Determine customer response to service (ECR)Determine customer response to service (ECR) Set customer service levelsSet customer service levels

314





315


Actors in the carriage chain

Brokers ForwardersCustoms brokers Carriers 3PL, 4PL, 5PL, LLP

316


3 PL european Top-ten

EXEL 2,5 Md €/7 2 310 000 qmTNT Post Groep 1,562 Md €/ 3,6 3 067642 qmHAYS pic 1,5 Md €/ 4 3 000 000 qmTIBETT&BRITTEN 1,2 Md €/ 2,4 NCChristian Salvesen 1,150 Md €/id NCDANZAS Solution 1,114 Md € / 8,2 2 870 000 m2FIEGE 1,080 Md €/1,2 NCGEODIS 0,799 Md €/1,8 2 000 000 m2TDG Logistics 0,686 Md €/ id 1 000 000 m2Frigoscandia 0,560 Md €/id 4 500 000 m2

317


Physical & financial flowsPhysical & financial flows

Insured BeneficiaryBeneficiary Seller Consignor

Broker AgentBroker Agent advising advising

confirming B.confirming B.

ForwarderForwarder Insurance Co Insurance Co Incoterms Incoterms

issuing B. ICC 2000 ICC 2000 CarrierCarrier

Insurance Insurance LC LC Sales Sales Carriage CarriageContract Contract Stand ByStand By contract contract contract contractILU covers UCP 500 500 Den Haag, New York CMR, CIM, , New York CMR, CIM,

Vienna Vienna Warsaw, Brussels Warsaw, Brussels

InsuredInsured Applicant Buyer Applicant Buyer Consignee Consignee

318


SCM

• Interfaces between physical & financial flows– Carriage contract– Sales contract– Letter of credit, C.A.D, SBLC– Insurance contract

319


Carriage contract

• Carriage contract– CMR or Geneva Convention (1956)– CIM or Bern Convention (1890)– Warsaw (1929) & Protocol n°4 – Brussels (1924) , Visby (1968) , French law

(1966),Hamburg Convention(1970)– Budapest Convention(2000)– (french) domestic contracts

320


Limitation of liability

• Conventions• CMR Geneva (1956)• CIM Bern (1890)• Warsaw (1929)• Montreal Protocol• Brussels (1924)• French Law1966• Hamburg rules 1977• Budapest• < 3 tonnes 1998• > 3 tonnes 1999

• Repair Limits• 8,33 SDR/Kg• 17 SDR/Kg• 250 Golden French Franc Poincaré• 17 SDR/Kg• 100 golden £/package• 2 SDR/Kg ou 666,67 SDR/package• 2,5 SDR/Kg ou 875 SDR/package• 2 SDR/kg• 23 €/Kg max 750 €/package• 14 €/Kg max 2 300 € x total

weight

321


Sale’s contract

• Sale’s contract– NY Convention and arbitration clause (1958)– Vienna or UN Convention (1980)– Incoterms ICC 2000– Interfaces with carriage contracts : examples

• Freight collect and prepaid

• Delivery time

322


Sale contract

Sale contract and latin right

• Penitus extranei : fully allien

• Specialia generalibus derogant : particular provisions are superior to general rules

• Dura lex, sed lex : law is hard, but it’s law

• Nemo censitur ignorare legem : nobody is supposed to ignore the law

323


Documentary credit

• Letter of credit (UCP 500)

Main Actors• Applicant (50)

• Issuing Bank (31 C)

• Advising and confirming Bank,

• Beneficiary

Documentary chain

Letter of credit and logistics instructions

324


Documentary credit

Date of maturity or expiry (31 D) Payment at sight, deferred, (42 P)

by acceptation, by negociation Irrevocable (40 A) Period of presentation : 15 days

instead of 21 (48) Details of charges (71 B)

325


Documentary credit

• Documents Certificate of weight (5)

Shipment advice (6) Certificates that the carrying ship can enter U.A.E seaports (7),

is ISM compliant (8), classified (10)

Commercial Invoice (46)Certificate of origin (46 A 3)Packing List (46 A 4)B/L

326


Documentary credit

• Letter of credit & logistics instructionsShipment on a conference vessel (47 A II)On a vessel which is not over 15 years of ageClassified as per institute classification clause Partial shipment not allowed (43 P)Loading on board in France (44 A)Latest date of shipment (44 C)

327


Goods Insurance

• Insurance contract– Actors : insured, underwriters, Cies, brokers, agents

– ILU and ABC covers, WRCC– Forclusion– General average– Interfaces with 3PL– Third shipper policies– Goods insurance & SDI

328


Construction of a physical chain

• Architecture of the physical chain

– The architect : the Freight forwarder– The commissionned broker– The carrier

329


Freightforwarder & Broker

• Freightforwarder– Legislation : art ex 94 à 99

(L 132-1 to L 132-6 C of C)– Comparison with

forwarder,Spediteur,…– Presomption of Liability– Result obligation– Way & Means obligations– Advise obligation– limitations of liability– Retention right– Time limitation (1 year)

• Broker– Legislation : art 1992 to 1996

of Civil Code.– Liability of a «good familly

father »– Onus of proof– Means obligation– Commissionned company– Advised obligation – limitations of liability– Lien– Prescription or Time limitation

(10 years)

Chapter 7

Supply Chain Supply Chain ManagementManagement


331


Supply Chain

• All activities associated with the flow and transformation of goods and services from raw materials stage to the end user (the customer), as well as the associated information flows

• A sequence of business activities from suppliers through customers that provide the products, services, and information to achieve customer satisfaction

332


Products and Services


Supply Chain Example


Customers

Total satisfaction with quality, price, delivery, and service

Distributors

Package and delivery

Inventory

Producers

Finished goods, end products and services

Inventory

Suppliers

Inventory

Materials, parts, sub-assemblies, and services

Figure 7.1

Information

Cash

333



• Synchronization of activities required to achieve maximum competitive benefits while lowering cost– Coordination, cooperation, and communication– Rapid flow of information– Customer and supplier have the same goals– Trust – Share in the design of the supply chain

• Vertical integration

334


Supply Chain Uncertainty

• Contributors to variability– demand forecasts– lead time variability– batch ordering– price fluctuations– inflated orders

• Inventory is a form of insurance• Distorted information is one of the main

causes of uncertainty– Bullwhip effect

335


Bullwhip Effect

Tier 2Suppliers

Tier 1Suppliers

Producer Distributor Customers

Ordering information

Amount ofinventory=

336


Demand Distortion along the Supply Chain

337


Improving the Supply Chain Through IT

• Centralized coordination of information flows

• Integration of transportation, distribution, ordering, and production

• Direct access to domestic and global transportation and distribution channels

• Locating and tracking the movement of every item in the supply chain

338


Improving the Supply Chain Through IT

• Consolidation of purchasing from all suppliers

• Intercompany and intracompany information access

• Data interchange

• Data acquisition at the point of origin and point of sale

• Instantaneous updating of inventory levels

339


Electronic Business(E-Commerce)

• Replacement of physical processes with electronic ones

• Cost and price reductions

• Reduction or elimination of intermediaries, thus reducing costs

• Shortening transaction times for ordering and delivery

• Wider presence and increased visibility

340


Electronic Business(E-Commerce)

• Greater choices and more information for customers

• Improved service• Collection and analysis of customer data and

preferences• Virtual companies with lower prices• Leveling the playing field for smaller companies• Gain global access to markets & customers

341


Table 7.1Supply Chain Evolution at Nabisco

342


Electronic Data Interchange (EDI)

• Computer-to-computer exchange of business documents in a standard format

• Quick access, better customer service, less paperwork, better communication, increased productivity, improved tracing and expediting, improves billing and cost efficiency

• Effective in eliminating the bullwhip effect

343


Bar Codes

• Computer readable codes attached to items flowing through the supply chain

• Generates point-of-sale data which is useful for determining sales trends, ordering, production scheduling, and deliver plans

1234 5678

344


The Internet

• Instant global access to organizations, individuals, and information sources

• Fundamentally changes the way organizations do business

• Removes geographic barriers

• Shifts the advantage in the transaction process from the seller to the buyer

• Adds speed and accessibility to the supply chain

345


Figure 7.2 Build-to-Order Cars over the Internet

346


The E-Automotive Supply ChainSUPPLY CHAIN PROCESS AUTOMOTIVE PAST E-AUTOMOTIVE

Customer sales Push—sell from inventory Pull—Build-to-order

Production Goal of even and stable production

Focus on customer demand, respond with supply chain flexibility

Distribution Mass approach Fast, reliable, and customized to get cars to specific customer location

Customer relationships Dealer-owned Shared by dealers and manufacturers

Managing uncertainty Large car inventory at dealers Small inventories with shared information and strategically placed parts inventories

Procurement Batch-oriented; dealers order based on allocations

Orders made in real time based on available-to-promise information

Product design Complex products don’t match customer needs

Simplified products based on better information about what customers want

Table 7.2

347


Intranets and Extranets

• Intranets are internet-like networks that operate within a single organization

• Extranets are intranets that can be connected to the global internet

• Difference is in who has access to the system

348


IT Issues

• Increased benefits and sophistication come with increased costs

• Efficient web sites do not necessarily mean the rest of the supply chain will be as efficient

• Security problems are very real• Partnership and trust are important elements

that may be new to business relationships

349


Suppliers

• Purchased materials account for about half of manufacturing costs

• Materials, parts, and service must be delivered on time, of high quality, and low cost

• Suppliers should be integrated into their customers’ supply chains

• Partnerships should be established

350


Suppliers

• On-demand (direct response) delivery is a frequent requirement to support just-in-time (JIT) inventory system

• In continuous replenishment, a company shares real-time demand and inventory data

351


Sourcing

• Sourcing is the selection of suppliers• Relationship between customers and

suppliers focuses on collaboration and cooperation

• Outsourcing has become a long-term strategic decision– Organizations focus on core competencies

• Single-sourcing is increasingly a part of supplier relations

352


E-Procurement

• Business-to-business commerce conducted on the Internet

• Benefits include lower transaction costs, lower prices, reduce clerical labor costs, and faster ordering and delivery times

• Currently used more for indirect goods

• E-Marketplaces service industry-specific companies and suppliers

353


Figure 7.3 The Wal-Mart Supply Chain

354


Figure 7.4 Centralized Supply at Honda America

355


Distribution (Logistics)• The actual movement of products and

materials between locations

• Order fulfillment is ensuring on-time delivery of the customer’s order

• Handling of materials and products at receiving docks, storing products, packaging, and shipping

356


Distribution (Logistics)

• Driving force today is speed

• Particularly important for Internet dot-coms (virtual companies)

357


Figure 7.5 Order Fulfillment at Amazon.com

358


Distribution Centers and Warehousing

• DCs are some of the largest business facilities in the United States

• Trend is for more frequent orders in smaller quantities

• Flow-through facilities and automated material handling

• Final assembly and product configuration may be done at the DC

359


Warehouse Management Systems

• Highly automated systems

• Controls item putaway, picking, packing, and shipping

• Transportation management– Track inbound and outbound shipments– Consolidate and build economical loads– Select the best carrier

360



• Order management– Add, modify, or cancel orders in real time

• Yard management– Controls activities at the facility’s dock– Schedules dock appointments

• Labor management– Plans, manages, and reports performance level

of personnel

361



• Warehouse optimization– Optimizes placement of items in the warehouse

(slotting) based on demand, product grouping, and the physical characteristic s of the item

• Creates custom labeling and packaging

• Facilitates cross-docking

362


Figure 7.6 A WMS

363


Vendor-Managed Inventory (VMI)

• Manufacturers generate orders, not distributors

• Stocking information is accessed using EDI• A first step towards supply chain

collaboration• Increased speed, reduced errors, and

improved service

364


Collaborative Planning, Forecasting, and Replenishment (CPFR)

• Web-based standard that enhances VMI• Continuous replenishment through joint

forecasting through the exchange of data and information

• Reduces bullwhip effect• Significant decrease in inventory levels and

more efficient logistics

365


Marketing Achats

• Le marketing achats consiste à assurer à l’entreprise la pérennité des sources et des produits en vérifiant par anticipation l’adéquation des besoins de l’entreprise et du marché.

• Le marketing vente fait fabriquer ce qui pourra se vendre.• Les services internes font acheter ce dont ils ont besoin pour produire ce

que les vendeurs espèrent vendre.• Le marketing achats fait connaître ce qu’on peut trouver sur le marché en

q, Q, t

Services de l’entreprise

MktgAchats

Mktgvente

366


SRM ou Supplier Relationship Management

Introduit début 2 000 par I2 Technologies RFI : request for information RFQ : request for quotation

Etape 1 Design collaboratif : qualité équivalente avec nombre de pièces réduites

Etape 2 sourcing : identification, qualification (taille critique, capacité à livrer dans les temps, emplacement géographique), short list

Etape n°3 négociation Etape n°4 approvisionnement : (logistique, modalités de paiement). Etape n°5 récurrente : évaluation des performances

367


SRM & e-procurement

Gains de productivité et optimisation de la relation avec les fournisseurs (SRM)

Outils du e-procurement pour achats hors-production : catalogues en ligne et commande selon un circuit de validation (workflow)

Entre 5 et 10% de gains pour un ROI de 18 mois.

368


SRM & e-procurement

Hubwoo.com, compatible avec SAP.(choisi par Saint Gobain)

mySAP SRM : solution SAP qui gère tout le cycle de la relation fournisseur, des fonctions stratégiques aux fonctions opérationnelles.

SAP : plate-forme collaborative interagissant entre outils SCM (logistique), PLM (conception) et ERP (relation transactionnelle).

369


GPA Intermarché

M Bruno BORDE : Dr du projet EDI/ECR chez Les Mousquetaires

6 ans pour atteindre 90% des commandes en EDI

Envisagé au départ pour améliorer livraisons de produits frais sur points de vente

Coûts élevés : traducteur, machine, adhésion à RVA : 1 000 gros fournisseurs

Pour les 1000 petits fournisseurs Web-EDI

« Gpiste », nouveau métier, différent de l’ADV car il faut avoir une vision sur les stocks et les rotations des distributeurs, savoir réagir à des données extérieures (météo…)

Les lacunes de la GPA ont généré les besoins en CPFR

A l’origine, les USA avaient prévu la GPA sans promotion, ce qui n’est pas conforme à nos pratiques

370


SCM

III.a) Logistique stratégique

371


CE2M (automotive sector) Approche logistique sectorielle

• Les 7 « Zéros » de Shigeo Shingo ou vers l’excellence logistique

• Positionnement idoine de la fonction logistique

• Interfaces fonctionnelles et ERP

• Interfaces opérationnelles

• Interfaces sectorielles

Excellence logistique

O Stock

Right Inventory

373


Les Modules R/3 de SAP : Contrôle de Gestion (CO)

• CO gère le contrôle des coûts et des produits d’ une entreprise

• Ses principales composantes sont :

– Comptabilité analytique des natures comptables

– Comptabilité analytique des centres de coûts

– Comptabilité analytique des supports de coûts

– Comptabilité analytique des projets

– Compte de résultats

– Comptabilité analytique des centres de profit

– Méthode des coûts de l ’ activité

– Contrôle de gestion de l ’ entreprise

374


Les Modules R/3 de SAP : Gestion des Immobilisation (AM)

• Il est conçu pour la gestion et le suivi des différents aspects de l ’ actif immobilisé.


– Gestion des immobilisation technique et de la maintenance

• Entretien

• Remise en état

– Suivi de investissements

• Cession d ’ immobilisations

• Comptabilité des immobilisations

– Amortissement

• Gestion des investissements

375


Les Modules R/3 de SAP : Comptabilité Financière (FI)

• Ce module est conçu pour la gestion automatique des

comptes généraux et le reporting externe pour la comptabilité clients, la comptabilité fournisseur, ainsi que pour d ’autre compte de tiers, à l ’ aide d ’ un plan comptable personnalisé.


– Comptabilité générale

– Comptabilité fournisseurs

– Comptabilité clients

– Gestion de trésorerie

– Consolidation

– Système d ’ information de la comptabilité.

Excellence logistique

Zéro Défaut

Flawless

377


Integrators

FedEx• Created in 1973• 3,3 millions parcels/day

towards 210 countries• 140 000 employees• 43 800 warehouses &10 hubs• 649 planes• 44 200 vehicules• Turn over 22 M$ in 2002• Network : Memphis, Subic

Bay, Dubaï, Paris.

UPS• Created in 1919• 11,5 millions parcels/day

towards 200 countries• 362 800 employees• 1713 warehouses & 15 hubs• 584 planes• 88 500 vehicules• Turn over 31,3 M$• Network in Europe: Köln, Bonn

378


Integrators

DHL• Created in 1970• 228 countries • 71 000 employees• 3002 agences et 35 hubs• Brussels in Europe• 252 planes• 18 576 vehicules• EDI Connection • Turn over : 6,2 m$

TNT 40 000 employees 8 hubs in the world (Liege in Europe) 43 planes 19 333 vehicules Turn over : 11,78 m$

379


Aircraft CompaniesIntern’l traffic

Lufthansa (6,5 MTK)


Singapore AL (5,4)

AF (4,7)

BA

JAL

FedEx

KLM

Cathay Pacific

United A

Northwest

Nippon Cargo

UPS (15)

National traffic

FedEx (6,054)

UPS (4 232)

United A (0,958)

Northwest A (0,765)

AA

FedEx

Delta A L

ANA

China Southern A

JAL

Varig

Air Canada

China Eastern A

Total traffic

FedEx (10 069)

Lufthansa (6 603)

UPS (5,9)

Korean A (5,8)

Singapore A (5,4)

AF (4,7)

JAL

BA

KLM

Cathay

United A

Northwest A

AA

380


Intégrateurs US et banane bleue

381


Le diagramme Causes-Effet : "ISHIKAWA"

Le diagramme Causes-effet est un support graphique :

De discussion en servant de guide, de fil conducteur De formation en capitalisant l’expérience de chacun De présentation en formalisant le savoir faire de chacun

Matière

Main d’œuvre

EFFET

Méthodes

Matériel

Milieu

382


Les Modules R/3 de SAP : Management de la Qualité (QM)

• QM est un système de contrôle et d ’ information permettant de gérer la planification, le suivi, ainsi que la maitrise de la qualité dans le domaine de la production, des coûts et de l ’ approvisionnement.

• Principales composantes du module QM

– Contrôle qualité

– Planification de la qualité

– Système d ’ information de management de la qualité

(SIMQ)

383


"Les 5 S"SEIRI : Débarras

SEITON : Rangement

SEISO : Nettoyage

SEIKETSU : Ordre

SHITSUKE : Rigueur

384


KAIZEN

• Tenir sa maison en ordre

• Seiri (trier, to sort)

• Seiton (ranger, to straighten)

• Seiso (nettoyer, to scrub)

• Seiketsu (systématiser, to systematize)

• Shitsuke (standardiser, to standardize)

385


P.D.C.AP.D.C.A

386


Les outils qualité

J E CHERCHE UN OUTI L POUR

5 S

AM

DEC

Ana

lyse

de

la v

aleu

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Ana

lyse

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Aud

it

Ben

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Con

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Dia

gram

me

de

Gan

tt

HO

SH

IN

Ishi

kawa

Kan

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MRP

Pare

to

PDCA

PERT

QFD

QQ

OQ

CP

FAI RE PARTI CI PER

ORGANI SER MANAGER DECI DER

ANALYSER

PLANI FI ER

CREER CONCEVOI R

VALI DER

ORGANI SER PRODUI RE

OPTI MI SER

387


Gemba KAIZEN

Lutter contre les 7 gaspillages (Muda)• Muda de surproduction (production par avance crée stocks)

• Muda de stockage (pièces stockées ne créent pas de VA)

• Muda de rejets (pièces défectueuses coûteuses)

• Muda de mouvement (optimisation des postes de travail)

• Muda de traitements superflus (élimination de tâches)

• Muda d’attente (opérateur inoccupé, muda de Main d’Oeuvre)

• Muda de transport (move time)

388


"L'A.M.D.E.C."

Analyse des Modes de Défaillances, de leur Effets et de leurs Criticités

• Analyse préventive, en conception généralement

• AMDEC produit, AMDEC processus

• Objectif :

1. Identifier les risques de non qualité pour le client, l'utilisateur… ou l'actionnaire

2. Adapter les actions aux risques encourus

389


"L'A.M.D.E.C."


C = D x O x S

C = Criticité

D = probabilité de non détection

O = occurrence

S = gravité

390


"L'A.M.D.E.C."


Méthode :

• Création d'un groupe de travail (multidisciplinaire)

• Définition des critères d'évaluation pour les facteurs D, O, S

• Echelle de notation de 1 à 10

• Décomposition fonctionnelle

• Actions préventives

• Evaluation après mise en place de l'action

391


"Le Chantier HOSHIN"

Objectif :• Améliorer l’organisation du travail, les

installations et les flux de production

Principaux acteurs :• Fabrication, Etudes/Méthodes, Ressources

humaines

Point négatif :• Non responsabilisation des opérateurs

impliqués dans le chantier HOSHIN

392


"Le Chantier HOSHIN"Méthode :

1. Sélection du chantier et constitution du groupe2. Analyse et élaboration des propositions d’amélioration

et de la nouvelle implantation3. Réalisation des travaux d’aménagement4. Mise en place des modifications de processus et/ou

des actions d'amélioration 5. Validation du process – Evaluation du résultat

Objectifs et Avantages :1. Chasser tout gaspillage2. Éliminer les temps d’attente3. Optimiser la manutention4. Motiver les collaborateurs

393


Le diagramme Causes-Effet : "ISHIKAWA"

OBJECTIF :Déterminer toutes les causes possibles d’un problème pour trouver les causes les plus probables

PRINCIPE :1. Définir clairement l’effet dont on cherche les causes2. Tracer le diagramme avec les familles : les 5 M (Milieu, Main

d’œuvre, Méthode, Matière, Matériel)

3. Rechercher en séance de brainstorming toutes les causes possibles et les classer dans les différentes familles choisies.

REMARQUE :

Le diagramme "ISHIKAWA" est un outil très utilisé dans le cadre d'une démarche "A.M.D.E.C"

Excellence Logistique

0 papier

395


Les Modules R/3 de SAP : WorkFlow (WF)

• Ce module assure la liaison entre les modules R/3 de SAP intégrés et les technologies, outils et services inter-application (EAI)

• WF permet le lancement automatique des processus de gestion, selon des règles et des procédures prédéfinies.

– Le gestionnaire de Workflow crée un « work item » chaque

fois que des événements lancent un processus de gestion

– La logique d ’ exécution permet au Workflow d ’ incorporer

à chaque étape des données, ainsi que des documents.

– Les règles de traitement définies permettent au gestionnaire

de Workflow d ’ acheminer le « work item » crée au rôle

approprié (emplacement, personne ou unité)

• WF peut être lancé automatiquement via des données

ou des exeptions

396


"KANBAN"

En japonais : Etiquette

Objectifs :– Réduire les coûts de production– Améliorer la qualité des produits– Répondre plus rapidement aux besoins des clients

Principe : Supprimer tout ce qui n'ajoute pas de valeur au produit !

– Stocks de matières premières– Stocks d'encours de production– Temps de changements d'outils (S.M.E.D)– Nombre de fournisseurs


O panne et 0 incident


O Mépris

399


Les Modules R/3 de SAP : Gestion du Personnel (HR)

• HR es un système intégré qui permet de gérer la planification et le contrôle des activités du personnel


– Administration du personnel et calcul de paie

• Gestion des temps

• Calcul des frais de déplacement

• Avantages sociaux

• Recrutement...

– Gestion des carrières et des compétences

• Planification de l ’ affectation

• Gestion de la formation

• Gestion de l ’ organisation

• Gestion prévisionnelle du personnel

– Système d ’ information de la gestion du personnel

400


Les Modules R/3 de SAP : Gestion de la maintenance (PM)

• PM gère la planification, le traitement et l ’ exécution

des tâches liées à la maintenance


– Traitement des tâches non planifiées

– Gestion des services

– Avis de maintenance par date ou compteur

– Planification de la maintenance

– Nomenclature de maintenance

– Système d ’ information de gestion de la maintenance

(SIGM)

401


Intégration sectorielle de la logistique

• Contexte : déstabilisation des modèles logistiques par l’aval et par l’amont

• Conséquences : comportements nouveaux dans les canaux de distribution

• Facteurs de changement :- Évolution de la concurrence qui se place sur le plan de la vitesse de réponse

aux attentes des consommateurs et non plus sur la seule composante prix

- Sophistication croissante des consommateurs

- NTIC qui permettent des changemennts structurels importants

- Coopération entre acteurs considérée comme essentielle

402


Intégration sectorielle de la Logistique

Motivations de la coopération• Recherche d’une alternative aux schémas concurrentiels

• Réduction des coûts de transaction

• Création de valeur distinctive et unique

• Gestion de l’incertitude

Limitations et problèmes posés par la coopération• Dimension comportementale

• Contrôle et normalisation des relations

• Modalités de répartition des ressources crées

• Conséquences organisationelles

403


Logistique aval

• Les 5 fonctions d’utilité d’un canal de distribution :

1. Fonction de lieu : lieu de production->lieu de vente

2. Fonction d’assortiment : recomposition de la gamme (co-packing)

3. Fonction de lot : lot de fab-> lot de vente

4. Fonction de transformation : différenciation retardée

5. Fonction de temps : maintenance du produit (respect de la chaîne du froid)

404



Typologie des canaux de distributionAgents passifs ou actifs / relations conflictuelles ou collaboratives

• Canal classique: relations ponctuelles des acteurs, pas de volonté de structuration ou de contrôle (ex boulangerie)

• Canal géré : poids plus important conquis et occupé par un des agents au sein du canal de distribution; pas de négociation, conflits importants (cas de la grande distribution en France).

• Canal contractualisé : formalisation après négociation préalable (ex distribution automobile jusqu’en 2002 ou Seita)

• Canal intégré : complètement maîtrisé par un agent du canal de distribution (ex Michelin et réseau Euromaster, Point P ou Benetton)

405



Logistique et canaux de distribution• Canal classique: approche désintégrée, pas de recherche de synergie ou de

mise en cohérence; chaque acteur dispose de son propre processus logistique indépendant

• Canal géré : logistique, levier d’administration du canal pour l’un des acteurs

(producteur ou distributeur) .

• Canal contractualisé : logistique concertée

• Canal intégré : optimisation de l’ensemble de la chaîne de mise à disposition

406


Les grandes Cies mondiales• Maersk Sealand• P&O Nedlloyd• Evergreen• Hanjin/DSR Senator• MSC• NOL/APL• COSCO• NYK• CPShips• CMA CGM• MOL• K Line• ZIM• OOCL, HLloyd, YangMing,

ChinaShipping, Hyundai, CSAV,

• 297 n 694 054 EVP• 138 n 343 554 EVP• 129 n 325 385 EVP • 82 n 258 023 EVP• 138 n 246 708 EVP• 81 n 224 344 EVP• 113 n 206 120 EVP• 86 n 170 995 EVP• 80 n 147 995 EVP• 81 n 141 842 EVP • 65 n 138 573 EVP• 62 n 136 460 EVP • 75 n 131 776 EVP

Source BRS-Alphaliner 2001

407


Les grandes Cies mondialestout type de vaisseaux (2002)

• MOL (J)• COSCO (Chine)• NYK (J)• Fredriksen (Nv)• Ofer (Israël)• AP Moller (DK)• K Line (J)• Bergesen (Nv)

• 384n 23,- MTPL• Tankers + bulkers+

CTR Ships

• Source Lloyd’s Maritime Database

408


Plus grands ports CTR• HK• Singapore• Pusan• Kaoshiung• RDAM• Shanghaï• LA• LB• Hamburg• Anvers• Port Klang• Doubaî• NY• Tokyo• Felxstove• Bremerhaven• Giaio Tauro• Tanjung Prioc• Yokohama

• 18,098 Millions EVP• 17,090• 7,540• 7,425• 6,274

409


Plus grands ports volume cargo• Singapore• RDAM• South Louisana• Shanghaï• HK• Houston• Chiba• Nagoya• Ulsan• Kwangyang• Antwerp• NY• Inchon• Pusan• Yokohama• Kaoshiung• Guangzou• Quinhuangdao• Ningbo• Marseille• Le Havre (39)

• Sources AAPA (American association of port Authorities )

• 2001

410


SCM

III.b) Positionnement de la logistique

411


Strategical LogisticsStrategical Logistics

Ideal Position of the logistics Ideal Position of the logistics function in the organization function in the organization

Chart to take up the challenge Chart to take up the challenge of the 7 « R’s »of the 7 « R’s »

412


Supply Chain ManagementSupply Chain Management

R & D Conception

Human Resources Purchasing Suppliers

Board

Finance Production Plant

Quality Logistics Distribution B to B

Marketing Client B to C

ERPERP

SCMSCM


APSAPS

413


Strategical LogisticsStrategical Logistics

MSP : Master Schedule PlanMSP : Master Schedule PlanPCZ strategy : (develop New PCZ strategy : (develop New Products, New Consumers, Products, New Consumers,

New Zones)New Zones)

414


Approche Logistique fonctionnelleLogistico-Marketing

• Influence de la Logistique sur le marketing-mix

Variable produit :

- largeur et profondeur de la gamme, facteur de domination du marché si disponibilité réelle du produit et coûts acceptables.

- Packaging : composantes marketing et logistique, influe sur le prix de revient, productivité logistique, performance commerciale du produit.

- Vie du produit : disponibilité de stock, SLI, pièces de rechange.

415




Variable prix :

- taille de commandes et seuils tarifaires

- Achats spéculatifs et prix d’activités

- Incitations quantitatives

- Niveaux de stocks

- Lissage de charge difficile

416




Variable promotions initiées par marketing et commercial

- Effets sur pilotage des flux

- Accélérateur momentané des ventes

- Prise en compte par le distributeur du montant de la ristourne, de l’accroissement des stocks, des coûts d’entreposage, de l’obsolescence éventuelle

- Répercussions pour la logistique : post-manufacturing, copacking, présentoirs, TG, incertitude de la demande…

417



The mission of Logistics is to get : • - the right goods or services• - to the right place• - at the right time• - and in the desired condition,• - while making the greatest contribution to the

firm

418


Contribution of Logistics to the value Contribution of Logistics to the value of the productsof the products

Logistics & MarketingLogistics & MarketingLogistics is a Logistics is a key success factorkey success factor for : for :

Availibility,Availibility, Timeliness,Timeliness, Delivery in good condition,Delivery in good condition, ResponsivenessResponsiveness Time to marketTime to market

= Logistics and 7 "R"s= Logistics and 7 "R"s

419


Supply Chain MangementSupply Chain Mangementstrategical logisticsstrategical logistics

Mission of a Logistician To set the level of logistics activities so as to

make products and services available to customers :

- at the time, place and in the condition and form desired

_ in the most profitable or cost-effective way.

420





421


ERP

422


423


424


Stratégie

Règles d’or d’Oliver WIGHT Implication de la DG, Maître d’ouvrage Mise en place d’une structure de projet : maîtrise

d’œuvre : comité de pilotage mis en place par Comité de Direction, avec un Dr de Projet

Mise à niveau des données techniques : fournisseurs, nomenclatures

Impliquer et former les utilisateurs : conduite du changement

425


Couple vente production

L’entreprise vit parce qu ’elle vend

Le système de production est tiré par la fonction commerciale (et non l’inverse)

426


Stocks Magasins Achats

ProductionO.F Livraison facturation

Commande client

B.Méthodes

B.d’Etudes

Ordo-lancementBoîte noire

= Système de

production de l’entreprise

427


Typologie de production

Référentiel de l’APICS Il faut toujours ramener un modèle à une typologie de production

• Fabrication sur stock ou sur catalogue : (ATP)ex MGS : vêtements, petits électro-managerNécessité d’un stock de produits finis

• Fabrication à la commande (sur mesure):Porte-avion, prototype, petites sériesAbsence totale de stocks de produits finis

• Assemblage à la commande : Commande sur stock, Finition à la commande

428


Logistique & OGP

Points de découplage et structures logistiques

Fabrication et réapprovisionnement au point de vente

Fabrication et réapprovisionnement pour le stock central

Assemblage à la commande

Fabrication sur commande

Fabrication et achats fournisseurs sur commande

429


Logistique & OGP

Joseph ORLICKY (1965) , base du MRP2 Besoins indépendants (besoins aléatoires ou externes

exprimés par le marché ) ne peuvent être qu’estimés.(PDP)

Gestion du point de commande basée sur un concept d’indépendance

Besoins dépendants (induits ou internes) doivent être calculés

Le réapprovisionnement d’un article donné est fonction de la commande d’autres articles (fabrication de roues dépendante de la fabrication d’une voiture)

430


Logistique & OGP

Nomenclatures : données techniques, (fabriqué, acheté, semi fini, MP,…), délais MRP, ressources, règles de gestion (q exacte, q mn, q multiple), lot technique, stock sécurité, q en stock, rangs

Résultats : échéancier

431


Pyramide de l’APICS

NIVEAU I de l’APICS

Plan stratégique

Établi par Comité Directeur composé de la DG, du Dr commercial, Dr industriel, DRH, Logisticien

432



NIVEAU II de l’APICS

PIC : Plan Industriel & Commercial (long terme) (production plan)

Outil de Direction, basé sur des prévisions de commande

Communiqué au Conseil d’Administration et aux Banques

Négociation entre les différents responsables de l’entreprise : PIC objectif, puis arrêté

Famille produits :ex bagages

433



NIVEAU III de l’APICS

PDP : Plan de Production (outil opérationnel) (master schedule plan) (moyen terme)

1ère Etape Eclatement du PIC en PDP : Quels produits fabriquer?, en quelles

quantités? Et pour quelles périodes?. on passe au produit fini : ex valise noire, rouge, verte,… Ensemble des PDP = PIC Permet calcul des besoins nets (CBN ou MRP1)

434




PDP : Plan de Production (outil opérationnel)

2ème Etape PDP établi à partir de la demande réelle (carnet de

commandes) et des prévisions commerciales. Lancement des programmes ERP chaque semaine,chaque

jour pour replanifier les besoins.

435




PDP : Plan de Production (outil opérationnel)

3ème Etape

Lotissement et Formule de Wilson

436



NIVEAU IV de l’APICS

MRP1 (Material Requirement Planning) ou Planification de besoins en composants

Calcul des composants nécessités par le carnet de commande par éclatement des nomenclatures et coefficients de liens.

Différence avec des méthodes de réapprovisionnement en fonction du niveau de stocks (recomplétement)

437



NIVEAU IV de l’APICS

MRP2 (Manufacturing Resource Planning) ou Planification des Ressources de Production.

Calcul mis en œuvre par MRP1, suivi d’une phase de planification de la charge, puis d’un plan valorisé d’approvisionnement et de charge.

Prend en considération les besoins en capacité des machines, en MO, en outillage, et les ressources financières (CRP = Capacity Requirement Planning)

438


MRP

Material (MRP1), Manufacturing(MRP2) ERP (finance)

439


MRP

Material (MRP1), Limite des méthodes traditionnelles MRPII PIC Gestion de la demande MRP OF

440


MRP1

Limite des méthodes traditionnelles- Articles gérés indépendamment les uns les autres- Consommation antérieure de chacun des articles se répètera

dans le futur- Besoin dans le futur de chaque article sera effectif sans se

préoccuper de la date de ce besoin

441


MRP2

- Compte de résultat : objectifs / SIC / Prévisions- PIC (famille de produits) : famille 106, diesel, essence- Gestion de la demande : on ne travaille plus sur des agrégats mais sur des articles/

éclatement des familles/ on génère un PDP avec éclatement des besoins- CBN (MRP0) : on part des produits à besoin indépendant pour dérouler une

arborescence des besoins dépendants pour fabriquer des besoins des articles au niveau supérieur

- OF ou OA : ordre d’achats ou de babrication- Fabrication répétitive par campagne (kanban), discrète, sur projet, en « process »

(sidérurgie, chimie)

442


MRP2

PICGestion de la demandePlanification des besoins en composantsPilotage d’atelier

443


MRP2

PICCréation du plan commercialCréation du plan de production Désagrégation des valeurs prévisionnelleGestion de la demande

444


MRP2

PICCréation du plan commercialCréation du plan de production - Selon stock cible - Selon couverture cible : ex je veux 3 jours de stocksGestion de la demande- Gérer les besoins bruts par le plan commercial ou le plan de production,

les prévisions de vente, copie d’un autre plan, saisie manuelle : sort un programme de production

445


MRP2

PICCréation du plan commercialCréation du plan de production Gestion de la demande

MRP/CBN

446


447



NIVEAU V de l’APICS

Ordonnancement d’atelier

Effectué par le contremaître et le chef d’équipeTaylor a inventé les unités de temps : centième d’heureTMU= Time Measurement Unit = 1/100 000h = O,036sAbaques : décomposition en temps élémentaire de tous les travaux (tourner la main,

avancer, pencher le buste, déplacer, saisir un objet…)

448



NIVEAU V de l’APICS

Ordonnancement d’atelier

Ensemble des actes de gestion visant à l’établissement d’un ordre de déroulement des opérations de production qui permet d’atteindre un certain optimum économique préalablement défini

Choix de la machine, des outils, temps de réalisation, de réglage et de fabrication

449


Loi d’ASBY

Loi de la variété requise

« La régulation d’un système n’est efficace que si elle s’appuie sur un système de contrôle aussi complexe que le système lui même »

450


ERP

APS plus performants que les ERP pour la stratégie : algorithmes d’optimisation, d’aide à la décision, macro-décisions (localisation, fermeture d’usine,…) planification en une seule boucle tenant compte d’un grand nombre de contraintes (ressources, capacités, délais, coûts). Difficultés : intégration des données.

ERP/ MRP fonctionne lui en plusieurs boucles hiérarchiques.

ERP n’optimise pas.

451


ERP

Intégration : avoir au moins une base de données unique recouvrant au moins trois fonctions.

ProAlpha n’est pas un ERP.

EAI : menaces pour ERP

Fiabilité : unicité, synchronisme, modification

452


ERP et MRP2

• Calcul des besoins nets

• Eclatement des nomenclatures

• OF et OA

453


454


Les Modules R/3 de SAP : Gestion de la Production (PP)

• PP permet à l ’ entreprise de planifier et de contrôler ses activités de production


– Nomenclatures– Gammes– Postes de travail– Pic– PDP– CBN– Pilotage d ’ atelier– Of– Calcul des coûts– Fabrication répétitives– KANBAN– Planification de la production des industries de process.

455


456


SCM

IV. Interfaces entre :

logistique stratégique, fonctionnelle et opérationnelle

La logistique se décompose en 5

strates.

457


SCM & LOGISTIQUESCM & LOGISTIQUE

R & D Conception


Production Plant

Logistics

Marketing Distribution B to B

«

last mile »

Client B to C


BoardBoard

Upperstream LogUpperstream Log

Upstream LogUpstream Log

Internal LogInternal Log

Downstream LogDownstream LogEEDDII

EEDDII

PPuullll

PPuullll

458


LOGISTICS TOOLSLOGISTICS TOOLS

R & D Conception

Purchasing


Logistics Plant

Marketing

Distribution B to B

Client B to CFonctional linksFonctional linksOperational linksOperational linksInformation links

BoardBoard

EEDDII

JITJITECECRRDRDRPP

JIT, Kanban, JidokaJIT, Kanban, Jidoka

PokaYoké,MRP2,SMED, PokaYoké,MRP2,SMED,

JITJITSRMSRM

RReevveerrssee

LLooggiissttiiccss

TTQQMM QQFFDD

AABBCC

Concurrent Concurrent engineeringengineeringsimultaneous simultaneous engineeringengineering

459


Third Party LogisticsThird Party Logistics R & D Conception

Purchasing


Logistics

Plant

Marketing

Distribution


BoardBoard Logistics Logistics providersproviders

Performance Performance metricsmetrics

EDIEDI

Concurrent Concurrent engineeringengineeringsimultaneous simultaneous engineeringengineeringreverse logisticsreverse logistics

Co-manufacturing, Co-manufacturing, crossdockingcrossdockingco-packing, warehousingco-packing, warehousing

Continuous replenishment, carrier Continuous replenishment, carrier selection & rate negotiation, shipment selection & rate negotiation, shipment planning, order processing, packaging, planning, order processing, packaging, product return, e-tradeproduct return, e-trade

460


7 "R"s &7 "R"s & Logistics excellenceLogistics excellence

Fulfilment rateFulfilment rate Tools Tools

Right amountRight amount DRP + JITDRP + JIT

Right productRight product TQMTQM

Right placeRight place DRP + ECRDRP + ECR

Right timeRight time JITJIT

Right conditionRight condition TQMTQM

Right priceRight price JIT + ABC + QFDJIT + ABC + QFD

Right informationRight information EDI + ERP + EDI + ERP + CALSCALS +XML+XML

461


Crossdocking

Non-stop logistics movementConsolidation of products from multiple

manufacturers by 3PL in a single delivery to point of sale driven « pull » inventory replenishment system.

Customized deliveries of multi-tier pallets with electronic pallet content identification coupled withadvanced shipping notification.

462


Crossdocking

463


Vendor Managed Inventory (VMI)

This innovation approach shifts responsability for

replenishment from buyer to supplier VMI allows continuous and frequent replenishment Popularized in the late 1980’s by Wal-Mart and

Procter&Gamble One of the key programs of ECR and Quick response The vendor monitors the buyer’s inventory levels via

electronic messaging and makes resupply decisions Transactions customarily initiated by the buyer (such as

purchase orders) are initiated by the supplier. EDI is an enabler

464


Collaborative approachCollaborative approach

The focus on SC solution will force The focus on SC solution will force unprecedented collaborative between vendors, unprecedented collaborative between vendors, manufacturers, warehouses, transport service manufacturers, warehouses, transport service providers, customers and end-consumers.providers, customers and end-consumers.

Collaborative Planning & Forecasting Relationship Collaborative Planning & Forecasting Relationship (CPFR)(CPFR)

465


Les Modules R/3 de SAP : Gestion de Projet (PS)

• Il est conçu pour gérer la planification, le contrôle et le suivi de projets à long terme relativement complexes, dans le cadre d ’ objectif clairement définis.


– Gestion de la trésorerie et des ressources

– Maîtrise de la qualité

– Gestion des temps

– Système d ’ information de direction du projet

466


Logistique intégrée ou SCM

Logistique d’extrême aval : « dernier km »Logistique aval et DRP Outils : ECR, CRM,CPFR, JIT

Logistique interne de OGP MRP2, JIT, KANBAN, POKA YOKE, JIDOKA, SMED, OTED, TAKTIME

Logistique amont d’approvisionnementLogistique d’extrême amont (ingénierie simultanée, analyse

de la valeur) et rétro-logistique

467


Les Modules R/3 de SAP : Administration des ventes (SD)

• SD permet à l ’ entreprise d ’ optimiser l ’ ensemble des tâches et activités liées à la vente, la livraison et la facturation.


– Avant-vente

– Gestion des demande d ’ offre

– Gestion des offres

– Gestion des commande clients

– Gestion des livraisons

– Facturation

– Système d ’ information commerciales.

468


Distribution Outsourcing

• Companies focus on core competencies

• Takes advantage of the expertise that distribution companies have developed

• Tends to lower inventory levels and reduce costs

469


Transportation

• Movement of the product from one location to another

• Important element, often overlooked

• Common methods are railroads, trucking, water, air, intermodal, package carriers, and pipelines

470


Railroads

• 150,000 miles in US• Good for low-value, high-

density, bulk products over long distances

• Less flexible, slower and less convenient than trucks

• Worst record of quality performance

471


• Most used mode in US• Two major forms of trucking

– Full-truckload (TL)– Less-than-truckload (LTL)

• Flexible, small loads• Consolidation,

Internet load match sites• Single sourcing reduces number of trucking

firms serving a company

Trucking

472


Air

• Rapidly growing segment of transportation industry

• Lightweight, small items• Quick, reliable,

expensive• Major airlines

and US Postal Service, UPS, FedEx, DHL

473


Package Carriers

• FedEx, UPS, US Postal Service, DHL

• Significant growth driven by e-businesses

• Use several modes of transportation

• Expensive

• Fast and reliable

• Innovative use of technologies

474


Intermodal

• Combination of several modes of transportation

• Most common are truck/rail/truck and truck/water/rail/truck

• Enabled by the use of containers

475


Water

• One of oldest means of transport• Low-cost, high-volume, slow• Bulky, heavy and/or large items• Standardized shipping containers improve

service• The most common

form of international shipping

476


Pipelines

• Primarily for liquid products, e.g., oil, petroleum products

• Slurry lines carry coal or kaolin

• High capital investment

• Low operating costs

• Long life

• Can cross difficult terrain

477


Internet Transportation Exchanges

• Bring together shippers and carriers

• Initial contact, negotiations, auctions

• Typically only one form of transportation, intermodal exchanges have been difficult to develop

478


The Transportation Method

• Ship items at lowest cost

• Sources have fixed supplies

• Destinations have fixed demand

479


Supply Chain Management Software

• Enterprise Resource Planning (ERP)– Software that connects the components of the

company (including the supply chain) by sharing and organizing information and data

– Through information flows ERP organizes and manages business processes

480


Figure 7.8 Linking the Supply Chain with SAP

481


Global Supply Chain

• Free trade & global opportunities

• Nations form trading groups

• No tariffs or duties

• Freely transport goods across borders

482


Global Supply Chain Problems

• National and regional differences

• Customs, business practices, and regulations

• Foreign markets are not homogeneous

• Quality can be a major issue

483


Duties and Tariffs• Companies may use duty specialist to advise

how duties affect supply chain decisions and/or avoid duties

• Trade specialists may be used to manage transportation and distribution operations in a foreign country– International freight forwarders– Custom house brokers– Export packers– Export management companies– Export trading companies

484


Duties and Tariffs

• Proliferation of trade agreements among nation groups

• Group members charge uniform tariffs

• Member nations have a competitive advantage within the group

485


Duties and Tariffs

APEC

ASEAN

ANZCERTA

FTAA

NAFTA

CALM

ATPA

MERCOSUR

TAFTA

Figure 7.9

486


Landed Cost and Internet-Based International Trade Logistics (ITL)

Systems

• Knowing landed cost is critical in international trade

• Common components are transportation charges, tariffs, duties, and taxes

• ITL software systems convert language and currency between trading partners

• ITL companies can provide a variety of trade-related services

487


Infrastructure Obstacles to Global Trade

• Some emerging markets lack suitable distribution systems, i.e. roads, rail systems

• Existing roads and ports may be inadequate

• Market instability, political instability

• Vertical integration is a common solution

488


Legal aspects

• Carriage contract & juridical aspects

• Case law (jurisprudence)

• Dispute agreement

• Basics

489


Carriage Law

• Art ex 100 :transfer of title

• Art ex 101 & ex 102 : Waybill

490


Carriage Law

•

• Art ex 100 (L132- 6)

« Res perit domino » (art 1584 Civil code)– Transfer of title & Incoterms– Transfer of title & Dubanchet’s Law– Eigentumsvorbehaltklausel

491


SCM

• Validity of a transfer of title (ToT) clause Being known from the customer before goods live

the vendor’s local

When written on the back of a document, a mention must be inserted on the face like « see overleaf our ToT clause »

Be written in bold or italic, different from the rest of the text.

492


SCM

• Direct action against the carrier– Art ex 101 of the Commercial law (Art L132-

8)– The consignment note forms a carriage contract

between the Shipper, the Forwarder, in case of C or D sales

493


SCM

Art ex 101 of Commercial Law (Art L132-8)

The carriage contract is in fact not formal but CONSENSUAL

Consequence (+): we can contractualy act against the carrier even if no carriage document has been filled

Consequence (-) : the carrier can act against his principal in the same circunstances

494


SCM

• Article ex 102 Commercial Law (L132-9)– Mentions on the consignment note– adresses– Weight, Measures, Units, nomenclatures (entry

in the account elements)– Delivery time– other instructions

495


Liability for loss or damage

• Art ex 103 (L133-1) – Presumption of responsibility, result

obligation– The carrier can’t declare himself fully

unresponsible for theft, loss,etc …– Partial reparation limits are legal except in

case of heavy fault or wilfull misconduct.– Relief causes: force majeure,inherent defect

(outage), third part liability (packing failure)

496


Liability in case of delays

Art ex-104 (L133-2) Debarment for delays

– presumption of liability for delays excepted in case of force majeure

– Legal reparation limits (refund of the freight costs)

– Formal notice obligation to obtain damages

– Special Delivery Interest cover

497


Carriage Law

Art ex 105 (L133-3)

Debarment for partial loss and damages– Concerns the relation between consignee and

last carrier.– Precise remarks to be written by the

consignee on the consignment note– Confirmation by registered letter within

three following days

498


Carriage Law

Art ex 106 (L 133-4 of Commercial Law)

Special transport judicial expertise

499


Carriage Law

Art ex 107 (L 133-5)

All the articles seen above and after concern every kind of inland transportation (road, rail, river)

500


Carriage Law

• Art ex-108 (L133-6 Commercial Law)

Time limit for proceedings – Comparison with other limitations periods in other

contracts

– Limitation period calculation

– Suspension, Interruption, Interversion (admission of guilt), Novation (promise of guilt)

– Reconventional action

501


Inbound Law /CMR

Inbound law (Code de Commerce)

• Art L 132-8 (ex 101) : Direct action• Art L 132-9 (ex 102) : Waybill

• Art L 133-1 (ex 103) : Presumption for loss & damage

• Art L 133-2 (ex 104) : Presumption for delay

• Art L 133-3 (ex 105): Debarment for partial loss & damage

• Art L 133-5 (ex 106) : Expertise• Art L133-7 (ex 108) : Limitation

CMR (Geneva Convention)

– Art 8 + Art 17-2 + Art 17-4

– Art 19 (21 days)

– Art 23 + Art 27– Precises remarks on the CMR– Art 32 : one year + special

limitations

502


Inbound Law / CMR

(Code de Commerce)

• Art L133-7 (ex 108) : prescription

• CMR

• Art 32 : one year + special limitations for delay and other action– Total loss : 1 year +30

or 60 days

– Other actions : 1 year + 3 months

503


Inland Law /CMR

Code de Commerce

• Art L133-7 (ex 108) : Limitation

• Contractual suspension

• CMR

– Art 32 : alinea 4

– Suspension : first letter of reclamation trigger damages at a rate of 5% /year

504


Inbound Law/CMR

Code de Commerce

• Art L 133-3 (ex 105) :

• Unconcealed damages Remarks + Confirmation by Registered Letter within 3 following days

• Concealed damages

Must be discovered in the presence of the driver.

• CMR

– Unconcealed damages Precise remarks on the CMR consignment note

– confirmation not necessary

• - Concealed damages

- presumption of liability during 7 days after date of delivery

505


Inbound Law /CMR

Code de Commerce

• Art L 133-2 (ex 104) : Delay debarment

• Formal notice, except when « accelaration clause »

• CMR

– Art 8 + Art 17-2

+ Art 17-4

– claim within 21 days

Maritime stage

From EXW to DEQ

Inland haulage

Tally Sheet & B/L issue

B/L and Letter of Credit

B/L accomplishment

507


Issuing a clean B/L

• Tally sheet (feuille de pointage)

• THC : Terminal Handling Charges

• CSC : Container Service Charges

• « on board » mention

• Freight collect or prepaid

508


Bill of Lading

The 3 functions of B/L

• Contract of carriage

• Liner terms

• Document that enables the transfer of property on arrival if the consignee holds the right original B/L

509


B/L or Bill of Lading

3 types of document componing the full set of B/L (jeu complet de connaissement).

• Original : no more than 3 of them

• Ship’s copy (connaissement chef) : given to the captain on board the ship.

• Not negotiable

510



The 3 ways for filling up the consignee box

• Leaving it blank, to bearer (au porteur)

• Named person B/L (à personne dénommée)

• To order B/L

511



Accomplishment of the B/L

• Comparing the Ship’s copy of the captain with the B/L of the consignee

• Checking the content of consignee box• If freight collect : asking for payment• Delivery order necessary for leaving the port• Accomplishment of the B/L with mention

« void »

512


Pathology !

• The Mate is not OK with the goods presented when tallying!.

• He puts « remarks » on the tally sheet like : « shortage », « goods damaged »!

• These remarks must be rewritten on the B/L or the Captain will not put the mention « on board ».

• The original B/L’s will be « foul »,« unclean » orclaused

• DANGER : the beneficiary will not be paid by the confirming bank

• Regarding remarks like « STW »,« "STC », « STB »

513


Pathology when loading !

• The Mate is not OK with the goods presented when tallying!.

• He puts « remarks » on the tally sheet like : «shortage», « goods damaged »!

• These remarks must be rewritten on the B/L or the Captain will not put the mention « on board ».

• The original B/L’s will be «foul»,«unclean» or«claused».

• DANGER : the beneficiary will not be paid by the confirming bank

• Regarding remarks like «STW »,«STC », « STB »

514


Finding a remedy for the Pathology

• How to get a clean B/L that should be «unclean»?.• By issuing a « Letter of Indemnity » (Lettre de garantie

simple)

• Letter written by the shipper in favor of the carrier asking for a clean B/L and indemnifying the carrier in advance from all consequences.

• Tolerated if hiding shortcomings• Fraudulent if concealing quality defects

515


Second Pathology on arrival

• The original B/L are not available when Ship (and goods) arrives at the port of destination!.

• The consignee can’t withdraw his shipment.• Possibility to ask the issuing bank for a banking

letter of garanty (lettre de garantie bancaire)

• With this letter, the captain will accept to take the risk to deliver the goods without accomplishing the B/L.

516


Other clauses on B/L

• No deck allowed

• May be stowed as Deck Cargo

• Clause : both to blame collision clause

517


Charter Party (charte partie)

Intervening parties• True owner (véritable propriétaire, investisseur)

• Shipowner (armateur)

• Owner(fréteur)

• Charterer (affrèteur)

• Broker (courtier)

518


Charter Party (charte partie)

to fit out a ship (armer un navire)

• - to fit out tackles & gears (fournir agrès et apparaux)

• - shipchandling (avitailler)

• - crewing: captain, seamen,ship’s boy, ...• - hull insurance by Protection & Indemnity

Clubs (P&I). (assurance corps de navire)

519


Bare boat C/P C/P coque nue

C/P Coque nue (bare boat C/P)

Owner

Charterer

- Risques nautiques

(Management of the Ship) NO YES

- Risques commerciaux

(Management of the cargo) NO YES

520


Time C/P C/P à temps

Owner Charterer

- Risques nautiques

(Management of the Ship) YES NO



521


Voyage C/P C/P au voyage

Owner Charterer

- Risques nautiques

(Management of the Ship) YES NO



522


Technical terms to explain

• « how to use the Ship and not abuse her »• Demise of ship.• « Time runs for the owner »• According to the berth terms (acc.b.t)• Weather Working Days (WWD)• Lay Days (jour de planche)• NOR (Notice of readiness)• Demurrage (surestaries, Liegegelder)• « once on demurrage, always on demurrage »• Over over Demurrage (sursurestaries)

523


Technical terms to explain

• Dispatch money (prime de célérité)

• Reversabilité du temps sauvé

• Clauses WIBON or WIPON

• Whether in berth/ in port or not

• Berth = poste à quai

524


SCM

• Intra-Communuty Flows– 6th Brussels Directive– New obligations for the firms since the 1rst of

january 1993– Mentions on the invoices (B2B)– VAT – Declaration of trade in goods– Goods register (stocks records)

Course by J.PONS Evolution of the concept of logistics From Logistics to SCM To Accompany Russell...

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