Lecture 4 - Operations and Supply Chain Network Design Flashcards
In “Network Design”, we mention 4 things that explain the role of it, which ones?
- Facility Role - What role of what process?
- Facility Location - Where should the facility be and why?
- Capacity Allocation - How much capacity is at each facility?
- Market and Supply allocation - What markets and which supply sources?
Each plant has its own strategic role, in the lecture she mentioned 6 types of plants and their strategical benefits, which ones?
- Offshore plant: low-cost for export production
- Source plant: low-cost for global production
- Server plant: regional production facility
- Contributor plant: regional production facility with development skills
- Outpost plant: regional production facility built to gain local skills
- Lead plant: a facility that leads in development and process technologies
What are the 8 factors that affect “Network Design Decisions?”
- Strategic factors
- Technological factors
- Macroeconomic factors
- Political Factors
- Infrastructure factors
- Competitive factors
- Customer response time and local presence
- Logistics and facility costs
How do you calculate the labour productivity and how can this be used to take decisions of a “Location”?
Labour costs per day / Unit costs per day = Labour cost per unit
If the costs is high –> May have to shut down this place. (My view)
What is the “Framework for Network Design Decisions”?
Phase 1: Look at what my supply chain need to do.
Phase 2: Come up with locations over the world
Phase 3: How do I make my order come in time? Have a smooth flow?
Phase 4: All about costs and minimizing it
What is meant by “Phase 1”?
– Clear definition of the firm’s competitive strategy
– Forecast the likely evolution of global competition
– Identify constraints on available capital
– Determine broad supply strategy
What is meant by “Phase 2”?
- Forecast of the demand by country or region
– Economies of scale or scope
– Identify demand risk, exchange-rate risk, political risk, tariffs, requirements for local production, tax incentives, and export or import restrictions
– Identify competitors
What is meant by “Phase 3”?
– Hard infrastructure requirements
– Soft infrastructure requirements
What is meant by “Phase 4”?
- Location Choices
What are the 9 factors of “Models for Facility Location and Capacity Location?”
Important information:
- Location of supply sources and markets
- Location of potential facility sites
- Demand forecast by market
- Facility, labor, and material costs by site
- Transportation costs between each pair of sites
- Inventory costs by site and as a function of the quantity
- Sale price of the product in different regions
- Taxes and tariffs
- Desired response time and other service factors
In terms of “Location Strategies”, what are relevant techniques and assumptions for firms of “Services/Retail/Professional” when finding their location?
Techniques:
- Regression models to determine importance of various factors
- Factor-rating method
- Traffic counts
- Demographic analysis of drawing area
- Purchasing power analysis of area
- Center-of-gravity method
- Geographic information systems
Assumptions:
1. Location is a major determinant of revenue
2. High customer-contact issues are critical
3. Costs are relatively constant for a given
area; therefore, the revenue
function is critical
In terms of “Location Strategies”, what are relevant techniques and assumptions for firms of “Goods-producing” when finding their location?
Techniques:
- Transportation method
- Factor-rating method
- Locational cost–volume analysis
- Crossover charts
Assumptions:
1. Location is a major determinant of cost
2. Most major costs can be identified explicitly for each site
3, Low customer contact allows focus on the identifiable costs
4. Intangible costs can be evaluated
What is meant by the “Weighted center of gravity method”?
A logistics decision modeling technique that attempts to identify the “best” location for a single warehouse, store, or plant given multiple demand points that differ in location and importance.
