《供应链系统设计与管理》课程教学课件（讲稿）Lecture 6（Chapter 3）Supply chain Network Designing & Planning

Lecture 6Chapter 3: Supply chainNetwork Designing &PlanningDr.Wang, Fhanggiong2017

Lecture 6 Chapter 3: Supply chain Network Designing & Planning Dr. Wang, Zhangqiong 2017

The SCM Network ~logistics networkWarehousesandSuppliersManufacturersdistributioncentersCustomersManufacturingcostsTransportationcostsMaterial costsTransportationcostsInventory costsFiGURE1.1:Thelogisticsnetwork

2 The SCM Network ~logistics network FIGURE 1.1: The logistics network

Case : The Bis Co.What is Bis's network configuration now?Why Bis plans to modify their supply chainnetwork?Whataretheissuesthat needto beaddressed?Howto solvetheseissues?

3 Case : The Bis Co.  What is Bis’s network configuration now?  Why Bis plans to modify their supply chain network?  What are the issues that need to be addressed?  How to solve these issues?

3.1 Why Network Planning?Find the right balance between inventorytransportation and manufacturing costsMatch supply and demand underuncertainty by positioning and managinginventoryeffectivelyUtilizeresourceseffectivelyby sourcingproducts from the most appropriatemanufacturingfacility

4 3.1 Why Network Planning?  Find the right balance between inventory, transportation and manufacturing costs,  Match supply and demand under uncertainty by positioning and managing inventory effectively,  Utilize resources effectively by sourcing products from the most appropriate manufacturing facility

Three Hierarchical StepsNetworkdesignNumber,locations and size offacilitiesAssignment of retail outlets to warehousesMajorsourcingdecisionsInventorypositioning:IdentifyingstockingpointsFacilitiesthatwillMTS(stock)andkeep inventoryFacilities that will MTO(order)and hence keep no inventoryRelatedtotheinventorymanagement strategiesResourceallocation:production of products at the right facilityplants sourcing strategiesCapacityeachplant5

5 Three Hierarchical Steps  Network design  Number, locations and size of facilities  Assignment of retail outlets to warehouses  Major sourcing decisions  Inventory positioning:  Identifying stocking points  Facilities that will MTS(stock) and keep inventory  Facilities that will MTO(order) and hence keep no inventory  Related to the inventory management strategies  Resource allocation:  production of products at the right facility  plants sourcing strategies  Capacity each plant

3.2 Network DesignPhysical configuration and infrastructureof SCA strategic decision withlong-lasting effectsWarehousesandSuppliersManufacturersCustomersdistribution centersManufacturing costsTransportation costsMaterial costsTransportation costsInventorycosts6

6 3.2 Network Design  Physical configuration and infrastructure of SC  A strategic decision with long-lasting effects

Reevaluation of InfrastructureChanges in:demand patternsproduct mixproductionprocessessourcing strategiescostof running facilitiesMergers and acquisitionsmay mandatethe integration of different logisticsnetworks

7 Reevaluation of Infrastructure  Changes in:  demand patterns  product mix  production processes  sourcing strategies  cost of running facilities.  Mergers and acquisitions may mandate the integration of different logistics networks

Key Strategic DecisionsDetermining:the number of facilities, (plants,warehouses,...)the location of each facility.the size of each facility.space for products in each facility.sourcing requirements.distribution strategies, i.e., the allocation ofcustomersto warehouse8

8 Key Strategic Decisions Determining:  the number of facilities, (plants, warehouses,.)  the location of each facility.  the size of each facility.  space for products in each facility.  sourcing requirements.  distribution strategies, i.e., the allocation of customers to warehouse

Objective and Trade-OffsObiective:Designorreconfigurethelogisticsnetwork inorderto minimize annualsystem-widecostsubjectto avariety of service levelrequirementsTrade-Offs:Increasingthenumber of warehousesyieldsimprovingincreasingservice levelinventory costsData?reducingoverheadCosts?outboundcostssetup costsinbound costsO

9 Objective and Trade-Offs  Objective: Design or reconfigure the logistics network in order to minimize annual system-wide cost subject to a variety of service level requirements Trade-Offs:  Increasing the number of warehouses yields increasing • inventory costs. • overhead • setup costs • inbound costs reducing outbound costs improving service level Data? Costs?

3.2.1 Data CollectionWhat data?Howto collect them?Howto processthem?10

10 3.2.1 Data Collection  What data?  How to collect them?  How to process them?