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Modified over 2 years ago
Structuring a DC Network Ken Homa
Manufacturing Plants Distribution Centers Intermediaries End Users Customers
Plant Distribution Networks Centralized, decentralized DC Market Area Trade-off : customer service and operating costs
Plant DC CCCCC Distribution Networks Building Blocks C, Q, F, S
Plant DC CCCCC Transportation Distribution Networks Cost Components
Plant DC CCCCC Handling (out) Transportation Distribution Networks Cost Components Handling (in)
Plant DC CCCCC Handling (out) Handling (in) Transportation Storage Distribution Networks Cost Components Optimize “landed cost” systemwide
Plant DC Increasing Distance Single plant, co-located DC Transportation Costs In general, transportation costs increase with distance for comparable “types” of shipments
Transportation Tactics Load consolidation Backhauling Dynamic routing Distribution networking
Transportation Costs By Type $/Unit Truck LTL Parcel Premium Load (UPS) (Overnite)
Transportation Costs Backhauls Origin Destin- ation Backhauls Full trucks (to and from) Single destinations
Transportation Costs Dynamic Routing Origin Destin- ation Single destinations Max full truck distance Destin- ation Full TruckPartial Truck Drop Off Charges
Transportation Costs Distribution Networking Origin Customer Max full truck distance Efficiently route LTL DC Full TruckPartial Truck LTL
Plant DC Distribution Networks Single plant, multiple DCs DC
Cost adders …. Overhead / fixed costs Handling steps Less than truckload rates Offset by truckload volumes to DCs
Investment adders... DC “plant & equipment” Inventory (“local safety stock”) Forecast error (fragmented forecast) Lead times (plant to DC to customer) Service level multiplier...
Service Level -> Safety Stock Factor
Distribution Networks Principles Local => faster response Scale determines degree of affordable decentralization Ship full trucks : consolidation, backhaul, dynamic routing Answer derived from policy & analysis
Structuring a DC Network
1 When to Plan? Demand (volume, dispersion, predictability) Customer service requirements (customer expectations and competition) Product characteristics.
Foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Supply Chain and Logistics Management 17.
Chapter 3 Network Planning.
Logistics Network Configuration
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 Network Planning.
OPSM 305 Supply Chain Management Class 3: Logistics Network Design Koç University Zeynep Aksin
Logistic Management Warehousing
Operations and Supply Chain Management
Supply Chain Update June 19, Supply Chain Update For Campbell Sales Organization Supply Chain Update Agenda 1.Customer Service 2.Customer Pickup.
Summary of Revisions DoD Manual DoD Supply Chain Materiel Management Procedures 0.
Transportation in a Supply Chain
Typical supply chain upstream downstream.
Logistics Cost Part II Professor Goodchild Spring 11.
Supply Chain Logistics Management
Channels of Distribution Chapters 15, 16 Any series of firms that participate in the flow of goods from producer to final user. Short: producer → consumer.
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