Logistics and Distribution

Principles of Supply
Chain Management
MODULE 8: LOGISTICS AND
DISTRIBUTION
Copyright 2016 Bristlecone
Logistics and Distribution in

the Supply Chain
Its not just about Delivery
The aim of Logistics and Distribution is
to get products to their destination
accurately, with a high level of customer
service and at minimum cost.
Its not just about

manufacturers
Logistics and distribution is
relevant to manufacturers, retailers,
service providers and many other
industry sectors
This may be influenced as much by

how the supply chain is planned, how
and where components are sourced and
products made, as it is about how they
are delivered.
Some supply chains require the
planning of return processes in addition
to outbound delivery e.g. return of
packing materials, damaged goods,
product recalls, etc.
2
Distribution strategy
components
A logistics and distribution strategy typically includes six key, interrelated
aspects.
These are used as a structure for the rest of this section of training material
Outsourced
vs. In-House
Logistics
tio
u
ib ork
r
s t tw
i
D Ne n
n sig
De
Warehouse
Design and
Technology
le
p
u
Channel
Selection
co t
e
D in
Po
Transportati
on
Managemen
t
&
3
Technology
Aspect 1: Distribution
network design
The flow of goods from manufacturer to end customer is dependent on the
nature of both the goods and the customer..
For example
Other
manufacturer
s
Retailers
Distribution
Centre
Manufacturin
g sites
Consumer
Retail Store
Manufacturer
s
Distribution
Centres
Business
customer
The need for distribution

centers (DCs)
Manufacturers use DCs to

allow quick, local response to
customers needs
represent the company in new
markets
customize products in regional
markets
consolidate shipments and reduce
transport costs
Strategy varies depending on the
cost of manufacture relative to the
cost of storage
Retailers use DCs to

consolidate products from many
suppliers before delivering to
stores
avoid suppliers delivering directly
to their stores
gain control of their up-stream
supply chain
Strategy varies depending on the
rate of sale relative to the cost of
storage and distribution
Tools to develop a
distribution network model
Example of other Network

Modelling Software vendors:
Insight
Paragon
iLog
Logic tools
Scientific Logistics
Arena
i2
Aspect 2: Decoupling points

C
#
1
#
2
= 7 SKUs
B
Cartridge
Handles
Cartridges
Packaging
= 12 SKUs
Decoupling practices
(a) Form Postponement
Make
Store
(b) Location Postponement
Label/Pack
Make
Distributed Customer
inventory
order
Make
Distributed Customer
inventory
order
Order receipt
Make
Label/Pack
Store

8
Principles
of Supply Chain Management:
Aspect 3: Warehouse design

and technology
Receiving
Manual movement
Automated bulk storage
Picking to totes on a
conveyor system
Manual picking in a
chilled facility
Automated sortation
Using RFID to track goods

1
Plant
Producer adds an
RFID tag to
individual products
Retailer DC
Items are loaded

into tagged cases
and pallets
A reader above the

shipping door
reads each pallet,
case and item
Pallets of product arrive at a DC

and the items are automatically
received and uploaded to the
WMS. The product is picked and
shipped with increased
accuracy and throughput, and
reduced labor expense.
Delivery arrives at the retail store,

is automatically received and
inventory is updated. Readers
ensure that product movement is
tracked
10
The warehousing process

Transportation
management
Order management
Cross Docking
Flow-Through
Put-away
Picking
Traditional
Manual or with
conveyors /
sortation
equipment
Receiving
Pick face
replenishme
nt
Storage
Staging /
Shipping
Post
manufacturi
ng services
11
Warehouse layout
DISTRIBUTION CENTER
O
U
T
B
O
U
N
D
S
H
I
P
P
I
N
G
FLOOR/
BULK
CROSS
DOCK
External Movements Conveyors

Putaway
B
R
E
A
K
P
A
C
K
B
R
E
A
K
P
A
C
K
C
A
S
E
C
A
S
E
F
L
O
W
F
L
O
W
RECEIVING
INBOUND
Picking
12
Performance measures and

operational issues
Performance
measures
Shipping accuracy
On-time shipments
Operating cost
Customer complaints
Inventory level and
accuracy
Cycle count accuracy
Complete orders
shipped
Turnaround time
Issues
Security
Transaction recording
Authorization control
Inventory control
Sanitation
Code dating and rotation
High value control
Material handling and
storage
13
Warehouse management
systems (WMS)
Businesss supply and demand planning systems
WMS functionality
Manhattan Associates
SAP
Catalyst
Put-away
Red Prairie
INFOR
Replenishment
Receiving
Sterling commerce
Picking
Yard
manageme
nt
Shipping
Traditional
Expanded
Note: INFOR acquired SSA Global, EXE and Provia. RedPrairie

acquired Marc Global, McHugh and LiS
Appointme
nt
scheduling
14
Aspect 4: Transportation
management & technology
Transportation is a massively fragmented industry

100,000s shippers, 250,000+ carriers
Two shippers buy two one-way shipments in opposite directions
The two carriers return routes are unplanned and under utilized
Road transport capacity moves empty nearly 1/2 of the time
$30Bn+ hidden inefficiency in the US alone
15
Transportation management
overview
Todays transportation management processes offer companies the ability to
decrease transportation costs, increase shipment visibility, and improve
customer service with the following activities:
order and/or load consolidation
track and trace capability
management of carrier relationships
utilization of optimal rates (mode, carrier)
monitoring of carrier performance
control of inbound freight
16
Logistics service provider

maturity profile
1
Carrier
Contract
Distribution
3PL Provide
Multiple
Services
4PL
Lead
Logistics
Provider
Virtual
Services
Provider
Little supply
chain
managemen
t awareness
Supply
chain
managemen
t impacts
SERVICE
Supply
chain
managemen
t impacts
BOTTOM
Competitive
LINE
Supply
chain
managemen
t impacts
GROWTH
Advantage
17
Supply
chain
managemen
t enables
NEW WAYS
OF
WORKING
Transportation management
systems
Businesss supply and demand planning systems
WMS
Oracle
SAP
JDA
KEWILL Systems
Shipment
Planning
Carrier
Assignment
Dispatch
Shipment
Monitoring &
Control
Freight Payment
Expanded
Traditional
18
Carrier Management
Manhattan Associates
Freight Procurement
i2
Event Management
TMS
Descartes
Aspect 5: Channel selection
Air
Satellite
Pipeline
Copper
Rail
Phone
Truck
Fiber
Tanker
Computer
Networks
Water
Solids
Information and
Services
Liquids
19
Mode selection criteria

Speed
Transportation cost
Inventory cost
Physical
capability
Reliability
Security
20
Track and
trace
Global Sourcing & Import

Logistics
Global sourcing and Logistics is the process of identifying, evaluating,
negotiating and configuring supply across multiple geographies to reduce costs,
maximise performance and mitigate risks
Landed cost = the true cost of acquiring goods from overseas and getting
them home!
Pro
duc
t
pla
Glo
nni
bal
ng
sou
and
rcin
dev
g
elo
pm
Global Sourcing
& Import Logistics
ent
Pur
cha
se
Imp
ord
ort
Cus
Fin
er
logi
tom
anc
ma
stic
s
e
nag
s
em
ent
Management
- The 6 Key Business Processes
A lack of Global Supply Chain automation and visibility is handcuffing companies with
longer lead times, bigger inventory buffers, budget overruns, and continued demandsupply imbalances.
Source: Aberdeen Group Global Supply Chain Benchmark Report, June 2006
21
Aspect 6: Outsourced versus

in-house logistics
Outsourcing
In-House
Service
Labor
Financial
Equipment
Safety
Maintenance
Cost
Service
22
Overview Questions
Q1 v1
When is it most sensible to manufacture in only one location despite serving
many
countries with your products?
1. When the cost of raw materials are high compared to the retail price of the product
2. When the cost of manufacturing equipment is high compared to the cost of
transportation
3. When the products are lightweight but consume a lot of space
Q1 v2
What is Factory Gate Pricing?
1. The pricing of goods in their finished state without adding on the price of their
delivery
2. The marking of retail price on goods while they are being packaged
3. The cost of a factories perimeter fencing and access gates
Q1 v3
Which is not a good reason for a retailer to hold inventory in their own DC?
1. So they can carry on selling products that the manufacturer no longer makes
2. To consolidate deliveries fro many suppliers before transporting goods to stores
3. To increase their control over the upstream supply chain
24
Overview Questions
Q2 v1
When using a computer model to design a distribution network, which of these
is not true?
1. The results of the analysis are only as good as the accuracy of the input data
2. The system will calculate the cost of different network design scenarios but the
user must specify which scenarios to test
3. The system will tell you the optimum number of DCs to have, and where they
should be
Q2 v2
What is the main purpose of a decouple point?
1. To separate a distribution trailer from the truck which pulls it
2. To delay the point at which a product is customised for its final market
3. To increase then number of SKUs that must be held in a DC
Q2 v3
If your customer requires delivery very quickly after placing their order, which
of these will
work well?
1. Form postponement
2. Location postponement
3. Neither type of postponement
25
Overview Questions
Q3 v1
Which of these is not a reason for a DC operator to wear a microphone and
earpiece?
1. To receive and confirm voice instructions from the warehouse management system
2. To receive instructions from his/her supervisor
3. So that both hands are free to handle goods
Q3 v2
Which best describes the circumstances under which a flow-through
arrangement be used
to avoid holding inventory in a DC?
1. When the total daily demand for each product is accurately known
2. When the supplier can be trusted to supply their goods reliably
3. When both of the above conditions are true
Q3 v3
What term is given to a DC operation in which goods are received in units that
have been
pre-picked for their end destination, and are consolidated in the DC so that
they can be
transported with other goods for the same destination?
1. Pick and pack
2. Flow-through Copyright 2016 Bristlecone
26
Overview Questions
Q4 v1
What is the most common comparator between the operating costs of DCs?
1. Cost per case
2. Operating cost as a proportion of the value of goods being handles
3. The ratio of fixed to variable costs
Q4 v2
Which of these bits of information could you not typically get from a
warehouse
management system?
1. All the various DC locations in which a particular SKU is currently stored
2. The items that have been received from a supplier and the quantities that were
received
3. The value of goods stored in the DC
Q4 v3
Which acronym describes a company that manages and executes logistics and
distribution operations on behalf of its clients?
1. 4WD
2. 3PL
3. HGV
27
Overview Questions
Q5 v1
Which of the following is true?
1. If you see a delivery truck on the road, it will nearly always be full
2. Air transport should always be used over long distances if the goods are suitable
3. Goods in transit tie up the businesss inventory and working capital
Q5 v2
Which is not a strong justification for using air transport for intercontinental
freight?
1. Because the goods are of high value compared to the transport cost
2. Because it reduces the need to complete manufacturing on time
3. Because the customers need is urgent and they are willing to pay for fast delivery
Q5 v3
Which of these is true?
1. Companies should manage their own distribution in order to maximise their control
2. Distribution should always be outsourced to a 3PL as they perform better
3. The outsourcing decision has many considerations and there is no single right
answer
28
29
30
31
32
Click icon to add picture
33
Thank You
Bristlecone
10 Almaden Blvd, Suite 600
San Jose, CA 95113
T +1 650 386 4000 F +1 408 920 7793
www.bcone.com
United States . Canada . United Kingdom . Germany . Switzerland . India .
Malaysia . Singapore
2016 Bristlecone Ltd. Bristlecone believes the information in this presentation is accurate as of the presentation date. The information is subject to change without
notice. Bristlecone acknowledges the proprietary rights of the trademarks and product names of all companies mentioned herein. All Rights Reserved.
34
Primary Colors
R:253, G: 185,
B:19
C:0, M:30, Y:100,
K:0
R:0, G: 73, B:144

C:100, M:72, Y:0,
K:18
Secondary Colors
R:217, G: 164,
B:40
C:15, M:36, Y:100,
K:0
R:165, G: 50, B:45

C:24, M:92, Y:89,
K:18
R:250, G: 240,
B:100
C:5, M:20, Y:75,
K:0
R:220, G: 220,
B:205
C:13, M:09, Y:60,
K:19
R:218, G: 33, B:40

C:10, M:100, Y:100,
K:0
R:108, G: 108,
B:108
C:58, M:50, Y:49,
K:17
R:67, G: 166, B:91

C:75, M:11, Y:86,
K:0
R:105, G: 145,
B:205
C:60, M:36, Y:0,
K:0
R:157, G: 130,
B:87
C:36, M:43, Y:73,
K:10
R:104, G: 44, B:145

C:74, M:100, Y:0,
K:0
R:148, G: 186,
B:101
C:46, M:10, Y:78,
K:0
R:26, G: 138,
B:143
C:82, M:28, Y:43,
K:4
Tertiary Colors
35

Logistics and Distribution

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Logistics and Distribution

Caricato da

Copyright:

Formati disponibili

Principles of Supply

Copyright 2016 Bristlecone