Supply Topic 2 (Mapping Supply Chain Network) Flashcards
Hierarchy for supply systems mapping
- Global value chain maps
- supply network maps (interfirm)
- supply chain maps (focus on specific product line)
- value stream maps (focus on materials)
- process maps (specific part of whole chain - manufacture)
- bottom = highest level of a supply chain network = global value chain map
distribution
steps taken to move and store a product from the supplier stage to the customer stage in supply chain
2 things distribution directly affects / performance of distribution network evaluated on 2 dimensions
- supply chain cost (needed to meet requirements)
- customer value (customers get)
- driving profitability
7 rights
goals of supply distribution
1. right product
2. right quantity
3. right condition (not broken)
4. right place
5. right time
6. right customer
7. right price
- goal of supply distribution network
2 factors affecting distribution network design
- supply chain cost
- elements of customer value influenced by network structure
4 supply chain cost elements affected by network structure
- inventories (stored)
- transportation (moved)
- facilities (warehouse, distribution centres, where locate and how many to build)
- info (build info systems = different ones = different costs and value)
7 customer value elements influenced by network structure (value measured)
- response time (time to receive order from placing order)
- product variety (number of products/configurations offered by network)
- product availability (enough available inventory)
- customer experience (perceive the service)
- time to market (time to bring new product to market)
- order visibility (after place order and receive order how much updates received)
- return ability
3 factors affecting distribution network design
- inventory costs and number of facilities
- transportation costs and number of facilities
- logistics cost, response time and number of facilities
Inventory costs and number of facilities
- more facilities = inventory costs are higher = need to be stored in lots of different places
transportation costs and number of facilities
- decrease then increase again
- inbound transportation costs (materials coming into facility) and outbound transportation costs (ship to customer) = usually higher = distributed everywhere and not centralised
- too many warehouses and transportations = increase as have to ship to inventories just for storage
logistics cost, response time and number of facilities
- response time is quicker when have a warehouse closer to me
- logistics cost = lower then higher
- logistics cost = inventory cost + facility cost + transportation cost
design options for distribution network - 2 factors affecting
2 key decisions!
- will product be delivered to customer location or picked up from prearranged site (company distribution ends and customer gets involved)
- will product flow through an intermediary
6 design options for distribution network
- manufacturer storage with direct shipping
- manufacturer storage with direct shipping and in-transmit merge
- distributor storage with carrier delivery
- distributor storage with last mile delivery
- manufacturer/distributor storage with customer pickup
- retail storage with customer pickup
distribution networks that ship directly to customer
(manufacturer storage with direct shipping)
- storage at manufacturing site
- large variety of high value
- low and uncertain demand = slow response time
- low inventory & facility cost
- high transportation cost = slow response time
manufacturer storage with direct shipping and in-transit merge
- adds 1 stop (intermediate stop)
- low inventory cost
- lower but high transport cost
- long response time
distributor storage with carrier delivery
- all goods/inventory is stored at the warehouse
- products are stored closer to us = transportation and response time is lower
- inventory cost is higher - inventory not so aggregated and scattered and spread into different warehouses
- facility costs are higher
distributor storage with last-mile delivery
- home food delivery
- high inventory
- quick response time
manufacturer/distributor storage with customer pickup
- last mile is done by the customer itself
- pick up sites
- amazon lockers
- click and collect
- low transport
- similar to carrier response time
retail storage with customer pick up
- traditional way of distribution
- high inventory cost
- low transport cost (lowest!)
- quick response time
- limited product variety - limited space
distribution networks that ship directly to customer
- large variety of high value products
- low and uncertain demand
- low inventory cost
- lower facility cost
- high transportation cost
- slow response time
distribution network that carry local inventory
- storing at retail side
- high demand
- high inventory & facility cost
- low transportation cost
- fast response time
tiers
based on importance and relation to supply chain
complex supply chain network
first mile in supply chain
first = start of delivery period
product from manufacturer via courier to carrier
