Network Design Part I Flashcards
What are the different components of Network Design Decisions?
Network Design Decisions has 4 components:
- Facility Role: Determining what role will a facility perform eg: Warehouse, manufacturing plan, retail location etc.
Facility Location: Deciding the location of the facility is a crucial decision which takes into account a lot of other factors such as facility role, taxes, proximity to stuff etc.
Capacity Allocation: Pertains to the size of the service or product that the facility can accommodate (manufacturing or warehousing).
Market and Supply chain Allocation: Pertains to deciding which markets will be targeted by the facilities product or services and an overview of the whole supply chain(manufacturer, transport, location, customer demand) etc.
Give a few reasons/factors, why the network design needs to be evaluated regularly?
A few reasons are as follows:
- Change in customer demand
- Change in Facility Running Cost
- Change of product
- Change in sourcing strategy
- Change in production process
- Mergers & Acquisitions
What the 6 Key Strategic network decisions?
The 6 Key Strategic Network design decisions are as follows:
- How many facilities to have?
- Location of all the facilities
- Size of each facility
- Sourcing of products to each facility
- Size allocation for different products in the facilities.
- Supply/Logistics of delivery products from facility to end consumer/customer.
Name the factors influencing SC network design decisions?
Acronym: STMLIC
* Strategic: Responsiveness vs cost
* Technological:
- High Initial setup cost > Economies of scale > Few hight capacity facilities
-Low Initial startup cost > Less Economies of scale > More smaller capacity facilities closer to consumers.
- Macroeconomic: Political, Geographical etc stuff
- Logistics & Facilities: Tradeoff»_space; Cost vs response time
- Infrastructure factor
- Competitive factor
Name a few factors important for making international location decisions?
- Quality & Motivation of labours
- Existence and Reliability of transportation system
- Telecommunication Networks
- Industrial Laws
- Record of government stability
- Labour cost
What are the benefits of having “Warehouses” ?
- Better match between supply and demand
- Supply can change anytime, therefore you need inventory. Supply is not very reliant and buying in bulk in more economical.
- There is a fixed setup cost for transport. Therefore aim of a full truckload to reduce logistical costs and also improve customer delivery.
Elaborate on the following: Omnichannel: Characterise, E-commerce organisation, Deliveries, Network Attributes
Characteristics:
- Has distribution network to supply stores
- Has distribution network of stores
Organisation (e-comm) deliveries:
- Small: Pickup from store
- Medium: Pickup from warehouse in/near store
- Large: Pickup from dedicated warehouse
Delivery:
- Pickups can occur at stores.
- Deliveries cannot be made from the same vans
- Delivery vans used to restock store with fresh supplies.
Network Attributes:
- Several large distribution centres to aggregate incoming goods from suppliers and pack orders from stores.
- Dependent on Ecomm volume:
- Separate warehouse for ecomm orders/separate process flow within same distribution centre
- Value-added activities can occur for both ecomm and store orders.
About Pure e-tailer
Eg: Amazon
- Warehouse to aggregate inbound flow
- Fulfilment centre: Prepare packaging, value additional activities performed here.
- Outbound sortation: Additional aggregation opportunities.
- If late cutoff time»_space; Fulfilment centres only coz otherwise increases time
- If full truckload opportunities arise, then diversion from Network design is probable.
About Direct Shipping from Manufacturers
- Ship in-house or using 2PL/3PL?
- If in-house, from the main warehouse or via another location (warehouse). Consider the following factors: volume, geographical spread of customers, focus on cost vs lead time.
eg: verwarming-shop-online.be
About general functioning of 3PL
Do warehousing, distribution and fulfilment. Most do fulfilment and cross-docking.
Difference between 3PL & 2PL is the system integration of logistics company and client.
- 3PL have longer contracts and a foresight into the demand of the coming period.
What are things that should be kept in mind when planning for peak periods?
- Spare capacity within the network: Vans, Airplanes, etc
- Flexible contracts allowing to source additional capacity in a short time.
- Force suppliers to shorten lead times or work with them to achieve that.
- Actively search for alternative supply sources (maybe even expensive options which can act on the variable demand rather quickly)
- Utilise promotion and demand:
- delay demand or pull demand earlier
- make space in warehouse for peak periods
What are things to keep in mind for “Reverse FLow”/ Returns?
- Figure out who to blame (who caused the damage if any)
- How to get back the product?
- Separate collection round?
- Regular delivery rounds => careful with LIFO constraints for large items
- Finish fast as it costs money (WIP = inventory)
