2. Flashcards
Which models can we use to understand:
1. What is the connection between logistics strategy and corporate strategy?
2. What are the possible approaches to logistics strategy?
a) ROA Model - IMPACT: Analyzes the return on assets, a measure of the company’s profitability.
b) Supply Chain Strategy Model - STRATEGY: Examines the overall strategy for managing the flow of goods and services.
It is affected by several business processes and is the ratio between Profit & Invested assets
ROA Return Of Assets
How is ROA structured
ROA= R-C/FC+WC
R: revenue
C: cost
FC: fix capital
WC: working capital
Explain how can we impact each of the contributors to increase ROA
- Cost:
Logistic Cost is part of it so efficiency=productivity, optimization=manage trade offs, quality=reduce cost of poor quality - Customer Service related to profit remember:
Optimize Service Level - Working Capital
Inventories
DSO reduction
Then C2C cycle reduction - Overall logistics optimization
Assets saturation
Outsourcing
We know that service level affects both Revenues and Logistics cost, costs by default.
How do we identify the profit out of this connection
If we put the two curves together because they share the service level axis, the gap of the inflected curve of revenue - the exponential cost to serve curve, in the optimal service level location (optimized) will give us the revenue.
If I go beyond or bellow I loose profit due too behavior of the parameters.
What is the COST -TO-SERVE CURVE
And how should it evolve with time
Is the function that changes in function of
Service level & Logistics Costs
OR
IFR & Inventory costs
With time we should get the same service level by less cost to serve due to innovation.
It defines the average days required to turn a dollar invested in RM into a dollar collected from a customer.
C2C Cycle
Cash to Cash Cycle
C2C= DSO + DIH - DPO
DSO Time I get paid
DIH Time I keep inventory
DPO Time I pay suppliers
How can Logistics impact C2C length
Reducing DIH Inventories and DSO Time i get paid, if i deliver ok they pay.
Explain one example of trade offs of logistics decisions
Investing in info system:
FC - increases
Cost - decreases (better inventory management)
Revenues - increase (Customer Service higher)
Other than impacting the ROA with each of its contributors, how can we define a strategy for Supply chain in this case
Using the Supply Chain Matrix Model
From supply chain profile to strategy
What is the Methodology of the Supply Chain Matrix
- Know your Supply Chain
- Choose your Supply Chain Strategic approach
- Define your Supply Chain strategic policies
- Review your strategy over time
What are the axis in the Matrix
Horizontal: Demand Uncertainty
Vertical: Supply Uncertainty
Which factors are evaluated to place a SC in a low high level of Demand Uncertainty
Price volatility
Demand
Promotional Sales
Seasonality
Time to market
Which factors are evaluated to place a SC in a low high level of Supply Uncertainty
Number of Suppliers
Uniqueness of Suppliers
Length of Lead time
BOM complexity
Globality
Country risk of suppliers
Maturity of process and technologies
Which strategy is placed in the DU L - SU L quadrant
And what is it about?
Lean Strategy
Aims to maximize ROA creating Cost and Value competitive advantages. By:
Policies:
- Eliminating Non Added Value activities
- Economies of scale focus
- Stock control, centralize management
Which strategy is placed in the DU H - SU H quadrant
And what is it about?
Agile strategy
Aims to reduce risk and responsive SC
Policies:
Reduce ROA variability
Reduce Risks
Mitigate uncertainties
short TTM/LT
Collaboration SC
Resource sharing
Which strategy is placed in the DU L - SU H quadrant
And what is it about?
Risk Heading Strategy
Aims to reduce risks in supply disruption
Policies:
Reduce Risk
Resources sharing
Back up suppliers
Which strategy is placed in the DU H - SU L quadrant
And what is it about?
Responsive Strategy
Aims to mitigate risk due to customer needs
Policies:
Massive customization
Extra capacity
Short Lead times
Short LT TTM
What of the strategy is the combination of other 2
Agile = risk + responsive
and so the policies
In case they ask, the project was about:
This project focuses on designing innovative and sustainable last-mile delivery solutions for an express courier operating in Milan.
Here’s a summary:
- The Goal: Improve the livability of Milan by creating efficient and environmentally friendly ways to deliver e-commerce parcels to customers.
- The Focus: Developing two alternative last-mile delivery solutions that are different from the courier’s current methods.
-
Key Requirements:
- The solutions must be innovative but currently technologically feasible (no drones or robots).
- They should be comprehensive, addressing 100% of B2C e-commerce parcel deliveries.
- Each solution needs to be evaluated for its economic and environmental impact (CO2 emissions) and compared to the existing base case.
- Deliverable: A detailed report outlining the proposed solutions, their performance, pros and cons for stakeholders (retailers, couriers, consumers), and the methodology used.
In essence, the project challenges students to rethink last-mile delivery in a busy urban environment, considering both logistical efficiency and sustainability.
