Developing Logistics Strategies

1
Developing Logistics Strategies

• Logistics Network Design (LND)

2
Strategie della logistica

• In un mondo globalizzato aumentano competizione e
  opportunità.
• Restare fermi significa non reagire alla
  competizione e non cogliere le opportunità.
• Le principali opportunità sono nuovi fornitori e
  nuovi mercati.
• Lobiettivo della strategia è di intervenire
  sulle variabili del sistema logistico per
  minimizzare i costi, aumentare le prestazioni e
  cogliere le opportunità.

3
The Need for Long-Range Planning

• Logistics systems have become strategically
  important in todays highly competitive business
  environment.
• In the short run, the logistics managers must
  work with the current logistics system.
• However, in the long run, the firms can consider
  variable many elements, and these can be changed.

4
The importance of LND

• Considering the rate at which the business
  environment is changing, logistics systems are
  under pressure to keep current.
• In many companies, change has happened recently
  or is scheduled for the near future.
• With capital being both scarce and expensive, LND
  become more important.

5
Drivers in logistics change

• Changing Customer Service Requirements
• Shifting Locations of Customer and/or Supply
  Markets
• Change in Corporate Ownership
• Cost Pressures
• Competitive Capabilities
• Corporate Organizational Change

6
Customer Service Requirements

• A customers business has changed and the company
  may need to change some aspect(s) of its service
  to those customers.
• Some customers will be looking for new supply
  chain partners and the company needs to be
  responsive to these potential new business
  partners.

7
Shifting Locations

• Geographic locations of markets often shift over
  time and the company needs to position its
  logistics network to be responsive to these
  shifts.
• Similarly, global competition often results in
  geographic shifts for not only new customers, but
  also new markets.
• Companies tuned to these changes have a head
  start in establishing new business.

8
Corporate Ownership

• Mergers, consolidations and divestiture may mean
  new logistics and market patterns for the
  surviving entity.
• Once again, companies tuned to these changes have
  a head start in establishing new business.

9
Cost Pressures

• As competition increases, firms must seek ways to
  continue growth.
• One such way is to find areas where the costs of
  key business processes can be reduced.
• Often the pressure to reduce costs can be applied
  to areas for which the logistics department has
  responsibility.
• Inventory and transport can be such sources.

10
Competitive Capabilities

• Obsolete facilities signal the company that a
  logistics examination is necessary.
• Companies that have not analyzed the changes in
  their environment are risking both profitability
  and solvency.
• Many firms locate distribution facilities near
  hub operations of FedEx, UPS, and DHL so that
  access to time-critical, express transport
  services is facilitated.

11
Corporate Organizational Change

• Downsizing and re-engineering cause the firm to
  reexamine its logistics division for potential
  savings.
• Many logistics facilities have faced various
  levels of change because of re-engineering
  efforts in the organization.
• Logistics functions can be provided by third
  party vendors (3PLs) where the firm cannot
  accommodate the necessary changes.

12
Le principali variabili del LND

• I fornitori (numero, prodotti e localizzazione)
• Il ciclo di produzione (acquisti, dimensione
  lotti)
• La delocalizzazione
• le modalità di produzione (logistica push e pull,
  postponement e Built to Order)
• I magazzini (numero, dimensione e posizione)
• I centri di distribuzione (numero, dimensione e
  localizzazione)
• I trasporti (modi, dimensione carico, tempi e
  frequenza)
• Le applicazioni di ICT
• La terziarizzazione (outsourcing)
• La collaborazione lungo la supply chain e tra
  produttori

13
AM

• AM è unazienda manifatturiera che produce 2
  prodotti finiti A e B e ha 3 magazzini
• il magazzino M1 contiene le forniture (materie
  prime e componenti)
• il magazzino M2 contiene il prodotto intermedio
  semilavorato C della linea di produzione 1
• il magazzino M3 contiene i prodotti A e B
  provenienti dalla linea a e dalla linea b.

14
Mercati e clienti di AM

• AM ha 3 aree di mercato con 3 depositi dei
  prodotti A e B.
• I depositi ricevono dai clienti di ciascuna area
  ordinativi dei prodotti A e dei prodotti B.
• Per rifornire i 3 depositi lazienda utilizza un
  trasporto multimodale strada ferrovia strada.
• I clienti sono riforniti dai depositi con
  percorsi diretti di veicoli stradali.

15
Fornitori di AM

• inbound logistics

F
Azienda AM
F
M2
M3
M1
F
Linea di produzione Percorso e direzione
Fornitore Magazzino
F
M
16
Flussi e centri di distribuzione

• outbound logistics

17
Analisi per il cambiamento strategico

1. SWOT
2. Lead time LT vs Desired Delivery Time DDT
3. Costi, tempi e regolarità della supply chain
4. Costi del magazzino vs costi del trasporto
5. Sistema informativo
6. Costi propri e costi delloutsourcing
7. Accuratezza delle previsioni
8. Variabilità della domanda e dellofferta
9. Reverse logistics
10. Livello di servizio

18
SWOT Analysis

• Strengths
• Weaknesses
• Opportunities
• Threats

19
The purpose of SWOT Analysis

• It is an easy-to-use tool for developing an
  overview of a companys strategic situation.
• It forms a basis for matching your companys
  strategy to its situation.
• It provides the raw material to do more
  extensive internal and external analysis.

20
Strengths

• A strength is something a company is good at
  doing or a characteristic that gives it an
  important capability.
• Possible Strengths
• Name recognition
• Proprietary technology
• Cost advantages
• Skilled employees
• Loyal Customers

21
Weaknesses

• A weakness is something a company lacks or does
  poorly (in comparison to others) or a condition
  that places it at a disadvantage.
• Possible Weaknesses
• Poor market image
• Obsolete facilities
• Internal operating problems
• Poor marketing skills

22
Internal analysis

• Strengths and Weaknesses form a basis for the
  internal analysis.
• By examining strengths, you can discover untapped
  potential or identify distinct competencies that
  helped you succeed in the past.
• By examining weaknesses, you can identify gaps in
  performance, vulnerabilities, and erroneous
  assumptions about existing strategies.

23
Opportunities

• An opportunity is a chance for firm growth or
  progress due to a favorable juncture of
  circumstances in the business environment.
• Possible Opportunities
• Emerging customer needs
• Quality Improvements
• Expanding global markets

24
Threats

• A threat is a factor in your companys external
  environment that poses a danger to its
  well-being.
• Possible Threats
• New entry by competitors
• Changing/shifting demand
• Emergence of cheaper technologies
• Regulatory requirements

25
External analysis

• Opportunities and Threats form a basis for the
  external analysis
• By examining opportunities, you can discover
  untapped markets, and new products or
  technologies, or identify potential avenues for
  diversification.
• By examining threats, you can identify
  unfavorable market shifts or changes in
  technology, and create a defensive posture aimed
  at preserving your competitive position.

26
The SWOT analysis diagram
27
Key strengths/weakness questions
28
Key opportunities/threats questions

• THREATS
• Are weakness likely to make us critical
  vulnerable?
• What external roadblock prevents progress toward
  our goals
• Are economic conditions affecting our financial
  viability?
• Competition is growing?
• Product recalls is a growing?

29
Ex Nanning Logistics Base

• The plan is to build a Free Trade Area (FTA) by
  2015 which will be the third largest in the
  world.
• Trade is growing at an annual rate of 20 between
  China and the ASEAN 9 of Chinas trade.
• Logistics parks and zones are popping up all over
  China and competition among local governments is
  intense.
• In general there appears to be a lack of
  coordinated planning and duplication of efforts
  between zones.
• Many argue that Nanning has little potential due
  to the relatively weak economic status of the
  region.
• Build it and they will come approach will work
  for Nanning?
• What are the key factors in support of locating a
  distribution hub in Nanning?

30
Strengths

• Location advantages ASEAN, western China,
  distribution for south and west including rail,
  water, roads.
• Excellent transportation infrastructure.
• Significant land resources.
• Industrial development zones Including sectors
  such as building materials, machinery,
  pharmaceuticals, etc.
• Basic logistics synergies have already been
  formed Steel processing logistics center,
  pharmaceuticals distribution center, and other
  processing and distribution areas currently
  exist.
• Favorable government policies for logistics and
  manufacturing activities.

31
Weaknesses

• Positioned with less developed countries Long
  distance from the economic power centers of
  China.
• Logistics market not developed.
• Far distance from rail 8 km to the Yongdong
  Station and 20 km to the Western Rail Station.
• Protected farm land limits logistics
  infrastructure development.
• Lack of complete infrastructure Construction has
  only just begun and transportation planning is
  yet to be clearly defined.

32
Opportunities

• National Development of Western China Nanning is
  one of the three cities placed as priority, the
  others being Guiyang and Kunming.
• Favorable development policies, including the
  logistics industry development.
• Establishment of China-ASEAN Free Trade Zone
  Nanning is strategically positioned as an axis
  for ASEAN.
• Pearl River Delta Regional Cooperative
  Development Nanning is at the axis of the
  economically developed Hong Kong, Macao and Pearl
  River Delta.
• Economic growth in Nanning Service sector is
  particularly strong, including transportation and
  warehousing.
• Development planning in Nanning city progressing.

33
Threats

• Duplication and redundancy in functions with
  other logistics zones in China.
• Lack of logistics talent.
• Competition from other logistics zones and local
  governments.

34
Lead Time LT vs Desired Delivery Time DDT
LT t0 Sti LT DDT
C
AM
CD
T
T
F
t4
t1
t2
t3
t5
t6
t7
t9
t8
LT con prodotto disponibile in M3
DDT1
Benefits of segmenting demand according to LT
sensitivity of customers with different DDT
DDT2
DDT3
35
Posizione del DDT nella supply chain interna AM
36
Terziarizzazione di M1

• Il magazzino M1 viene dato in gestione ai
  fornitori.
• Il sistema informativo consente la visibilità
  della supply chain di AM ai fornitori.

37
Eliminazione di M1
F
Azienda AM
F
M2
M3
F

• Il magazzino rimonta dai fornitori.
• I fornitori riforniscono direttamente le linee
  con la tecnica del JIT (just in time).
• Il sistema informativo consente la visibilità
  della supply chain di AM ai fornitori.

38
Eliminazione di M2
F
Azienda AM
F
F
AM produce con la tecnica del JIT (Just-in-Time)
o della Lean manufacturing.
39
Trasferimento di parte della produzione e
eliminazione di M3
AM decide di trasferire la produzione dei
prodotti A e B nei centri di distribuzione.
40
Percorso ottimizzato per CD3
C
CD1
C
AM
CD2
T
T
C
C
CD3
C
C
41
Eliminazione dei CD regionali, CD nel terminale e
percorso ottimizzato
Variante CD immagazzina il prodotto intermedio
C e produce allordine i prodotti A e B
42
Riduzione dei tempi di trasporto a lunga
distanza, eliminazione dei CD regionali, CD nel
terminale e percorso ottimizzato
43
Riduzione dei tempi di trasporto della lunga
distanza, eliminazione dei CD regionali,
localizzazione CD e percorso ottimizzato
44
Eliminazione dei CD regionali e percorso
ottimizzato
45
Eliminazione di tutti i magazzini di AM e dei
centri di distribuzione
46
Applicazioni dellICT

• Visibilità della supply chain (SCV) è la capacità
  di seguire parti, componenti o prodotti in
  transito dal fornitore al cliente e di rendere i
  dati immediatamente disponibili a tutti gli
  interessati della supply chain. SCV promuove
  rapida risposta ai cambiamenti sul lato domanda e
  offerta.
• Radio Frequency Identification (RFID) assegna un
  identificatore a ogni singolo oggetto che
  apparati a radiofrequenza, in modo simultaneo e
  senza visibilità, diretta acquisiscono
  automaticamente.
• Il Global Positioning System (GPS) è un sistema
  mondiale di radio-navigazione satellitare
  sviluppato dal DOD US, utilizzato anche nei
  servizi civili basati sulla localizzazione.
• General Packet Radio Service (GPRS) è un sistema
  basato sulla commutazione di pacchetto tramite
  onde radio,standard per la trasmissione dati
  nella rete telefonica cellulare attraverso la
  commutazione di pacchetto.

47
Radio Frequency Identification (RFID) Overview
48
What is RFID?

• RFID, is a broad term referring to a great number
  of technologies that can track assets and capture
  associated data automatically
• Similar to an electronic bar code, RFID enables
  the electronic labeling and identification of
  objects through wireless radio frequency
  communications
• Tags containing a unique identifier are placed on
  individual parts, bags, paperwork, pallets, or
  other containers.
• Readers communicate with the tags through radio
  frequency (RF) waves.
• Software applications manage the collection, and
  communication of the data with the logistics
  system.

49
RFID consists of 4 major components
RFID Tag (Transponder) Wireless Communication "Air-Interface" RFID Reader Communication Network RFID Software Application

Tags consist of a chip and an antenna for wireless communication Readers are similar to a mobile base station for wireless communication Communication network connects the readers to the enterprise information system Software applications are needed to integrated the data from RFID tags into applications
50
Radio Frequency Tags

• Transponder (tag) is programmed with information.
• Reader has an antenna which sends radio signals
  to activate tag.
• Noncontact, non line-of-sight.

51
Types of Tags
52
Characteristics

• Tags can be used in harsh conditions, usually
  housed in protective packaging
• Tags can be read over distances greater than 30 m
• Tags can be read through snow, grime, cutting
  fluid, paint, etc.
• Tags can be read at high speed
• More costly than bar code
• Lack of standardization between manufacturers

53
Tags types

• Active (battery powered) read and write
• Semi-active (dormant until activated by a signal)
• Passive (no battery, powered by RF signal) often
  read-only

54
RFID Reader

• Key tasks
• Communicate with tag and application
• Read information
• Send information
• Write information
• Erase information
• Readers can be
• Handheld
• Stationary

55
RFID offers more than a bar code
RFID Attributes Application Benefits
Identification without visual contact (wireless) Identify data objects easier and quicker at point of origin
Read/write (multiple times) Store and renew information as the tag comes close to the interrogator
Cluster reading Design a system that purposely presents more than one item at a time for identification to increase efficiency
Secure Encrypt the information in the tag for secure business processes
Withstand harsh Industrial environments Allow the tag to be packaged in any form to suit the application and environment
Reliability and speed Improved reliability and speed means faster business operations
Re-usable Re-use of RFID tags to save cost
Data storage at point-of-origin Store information on demand, without heavy investments in information technology
56
Logistica collaborativa

• Collaborative logistics is achieved when two or
  more companies form partnerships, or work with
  existing supply chain partners (customers,
  suppliers and carriers) to optimize transport
  operations by sharing truck capacity to cut the
  high costs of less-than-truckload shipments and
  empty back hauls.
• Collaborative logistics efforts also can lower
  inventories, which reduces costs, and eliminates
  stockouts that impact customer service.