World Class Supply Chain Management 18 th December 2004, Dubai Krishnan Sugavanam Mantis International Supply Chain & Logistics Group

Presentation Agenda What is Supply Chain Management? (SCM) Supply Chain Planning –Challenges (Interactive), Resolutions, Latest Trends Supply Chain Execution –Challenges (Interactive), Resolutions, Latest Trends Q&A

Supply Chain Planning Challenges Interactive

Some of the Challenges How many Stocking Locations; Where they are? Where to Stock? One Supplier or Multiple Suppliers? Multiple Lead Times? Variability in Supply? Variability in Demand? Centralised or Decentralised planning? How often to order? Weekly, Daily, Monthly, Quarterly? Or a combination? What forecasting methods to use and why? How to classify products for effective inventory control? What target service levels to set and why? How much buffer stocks to hold and where? How to measure the achieved service levels?

5 Production Planning & Scheduling Replenishment Planning Demand Forecasting Executive Information Systems Supply Chain Management Modelling and Simulation

Are you operating in isolation rather than in partnership? next Syncron - Supply Chain Management

JDE SAP R/3 Movex Oracle Baan Inhouse IFS WEB Shop.com ERP Myth JDE Inhouse

Supply Chain Planning Global Warehouse Divisional Warehouse Shop Manufacturing Supplier

Cyclical variation External factors FORECAST COMPONENTS Trend Forecast Components Base level

LUMPYSLOW ERRATIC FAST NEGATIVE TREND NEW DYING OBSOLETE Demand Patterns Trend

MANAGING FORECAST ERROR THE OPTIONS Month Demand BUFFER STOCK Lead time Review time Target service level Average demand Variability of demand Batch size

DFRP Models Warehouse Forecasts Branch Demand Branch Forecasts Branch Orders Branch Order Schedules Warehouse Stocks Warehouse Stocks Only National Stocks Branch forecasts and order schedules based on local demand

eCollaboration OEM SupplierDistributorWarehouseRetail Supplier Collaboration Internal Collaboration Customer Collaboration Information Flow Product Flow

VMI – Vendor Managed Inventory

Virtual Stock Management

Supply Chain Execution

Α Β Γ Δ Ε The Work Flow

What is Supply Chain Execution? Simply Handling Receipts and Issues of Inventory, and Controlling Warehouse and Fleet Receipts include, POs, Shipping Notifications, Scheduling, Advance GRN, GRN, Checking, Quality Management, Sorting, Binning, Cross Docking and Task Interleaving

What is Supply Chain Execution? Issues include Sales Orders, Delivery Orders, Stock Control, Shipments, Picking Planning, Picking, Task Interleaving, Replenishment, Kitting, Sorting, Checking, Packing, Repacking, Labeling, Documentation, Loading, Delivery Confirmation, Billing, Returns, AR and CRM

Managing Warehouse & Fleet Stock Search Pack Changes Cycle Counting Activity Management Truck Routing Fleet Tracking

In modern era SCE means… Increased Customer Satisfaction with Lower Cost of Delivery More accurate satisfaction of increasing logistics requirements Value added services to be provided – this has raised the minimum standard

Supply Chain Execution Some Challenges Interactive

Challenges Optimizing Storage Capacity Utilization Optimizing Resources such as men and machine Traceability of LOTs Inventory Accuracy Managing FIFO/FEFO Customer Service Management Fleet Management, Routing & Tracking

Resolution of Challenges

Optimizing Storage Capacity A Variety Storage Systems Multiple Units of Measure Variable Bins Mixed Bins Mixed Palettes Splitting Storage and Picking Location

Optimizing Resources such as Men & Machine Task Interleaving Storing by Product Velocity – Sales, Pack Sizes, Promotions Warehouse Design

Traceability of LOTs Audit Trail by LOTs, especially to enable LOT recalls Records on LOTs by Multiple Pack Sizes

Inventory Accuracy Bar Coding Multiple Storage Units Multiple Units of Measure De-link WMS Stocks from ERP Stocks to improve accuracy

Managing FIFO/FEFO Storage Kaizen System proposed Picking Splitting Storage and Picking Location

Customer Service Management Manage Date and Time windows for delivery through system Minimum Product Shelf Life Pallet Types Shipping Docs and Labels Consequent Reduction in Returns

Fleet Management & Routing Fleet Attributes, Item Attributes, Stock Attributes Automatic Vehicle Loading Sequence Routing – Shortest Time, Distance Fleet Tele-Tracking

Some Key KPIs Order Fill Rate and Accuracy Inventory Accuracy Warehouse Flow Through Compliance to Internal Standards

Some Action Points Ensure KPIs and Continuous Improvement Programs are in place Insure Warehousing and Transportation Processes are in Sync Insure these processes are in Sync with Customer Delivery Instructions

Additional Initiatives RFID Compliance, Direct Store Delivery, Smaller more Frequent Orders, Increased Order Fulfillment Accuracy, Reduce Working Capital, Efficient use of Inventory, Shorter Fulfillment Time

Past vs Present Past –Value Added Services such as BOM, Assembly, Packing, Kits –Compliance – Barcodes, BOLs, UCC Labels Present –Real-time integration with TMS –KPIs –Cross Docking –Remote Satellite Warehouse Operations –RFID Compliance

Some Latest Trends… Picking for Pieces, Cartons and Pallets –Strategies Basic Order Picking Batch Picking Zone Picking Wave Picking

Some Latest Trends… Picking for Pieces, Cartons and Pallets –Equipment ShelvesRacksCarousels Bar Code Scanners ASRS Pick to Light Voice-Directed Picking ACSS

Questions? Thank You