approche de la logistique esiea esiea septembre 2005 septembre 2005

Approche de la LogistiqueApproche de la Logistique

ESIEAESIEA

Septembre 2005Septembre 2005

Evaluation (Evaluation (assessmentassessment): ): ESIEA 5°AESIEA 5°A

- Interrogation sur cours N°1 (25%)Interrogation sur cours N°1 (25%)- RRevue de presseevue de presse (75%) pour (75%) pour

mise à jour des cours en fonction mise à jour des cours en fonction de l’actualité et de l’actualité et approfondissement des thèmesapprofondissement des thèmes

Evaluation (Evaluation (assessmentassessment): ): EtudesEtudes

Vous devrez rendre uneVous devrez rendre une revue de presserevue de presse, , pour le 28 octobrepour le 28 octobre 2005 2005, illustrant les , illustrant les différents thèmes traités dans les cours de différents thèmes traités dans les cours de Logistique et transports.Logistique et transports.MéthodologieMéthodologie ::

- accumuler des articles de presse tirés de accumuler des articles de presse tirés de journaux, de sites internet, de livres.journaux, de sites internet, de livres.

- Les regrouper par thème (Logistique,Supply Les regrouper par thème (Logistique,Supply Chain route, fer, air, mer, multimodal, Chain route, fer, air, mer, multimodal, douanes)douanes)

- Faire une synthèse Faire une synthèse personnellepersonnelle par thème, par thème, par article (joint) ou par regroupement par article (joint) ou par regroupement d’articles. d’articles.

- Les travaux ne seront pas restitués sauf Les travaux ne seront pas restitués sauf demande expresse..demande expresse..

Études : critères de notation de la Études : critères de notation de la revue de presserevue de presse

Vous serez jugé(e) sur :Vous serez jugé(e) sur :- la la diversité des sourcesdiversité des sources (20 %) (20 %)- La diversité des articles en La diversité des articles en langues langues

étrangèresétrangères (20%) (20%)- La qualité de la La qualité de la synthèse synthèse (personnalisée) : (personnalisée) :

50%50%- La La qualitéqualité de la présentation :(10%) de la présentation :(10%) - Vous pouvez remettre vos travaux sur support Vous pouvez remettre vos travaux sur support

papier ou les transmettre par mail à l’adresse papier ou les transmettre par mail à l’adresse suivante : suivante :

[email protected]@anetys.com copie à copie à [email protected]@anetys.com

coûts de transport/coûts logistiques globaux

34

41,3

1950,7

coûts de transport coûts de stockage coût de personnel

coût d'entreposage coût de matériel

Supply Chain et création de Supply Chain et création de valeurvaleur

Supply chain managementSupply chain management

Plan d’intervention ESIEAPlan d’intervention ESIEA

11èreère journée : 26 septembre journée : 26 septembre

Définition de la logistique et duDéfinition de la logistique et du

Supply ChainSupply Chain StratégiesStratégies CompétencesCompétences Critères gagnants et qualifiantsCritères gagnants et qualifiants

Logistics ESIEALogistics ESIEA

22èmeème Journée : 29 Septembre Journée : 29 Septembre

Opérations logistiquesOpérations logistiques

TransportTransportTechniques douanièresTechniques douanièresIncotermsIncoterms


33èmeème Journée : 30 Septembre Journée : 30 Septembre

Maîtrise des flux physiques, fluxMaîtrise des flux physiques, flux

financiers et flux d’informationfinanciers et flux d’information

J.PONS’ cursus & Logistics J.PONS’ cursus & Logistics evolutionevolution

Experience in operational logisticsExperience in operational logistics Secrétaire Général by GONDRAND Cie (3PL)Secrétaire Général by GONDRAND Cie (3PL)Experience in functional logisticsExperience in functional logistics

Operation manager by ALCATEL Group Operation manager by ALCATEL Group (imotics)(imotics)

Experience in strategic logisticsExperience in strategic logistics Operation manager by CE2M (automotive Operation manager by CE2M (automotive

sector)sector)Experience in Consulting (4PL)Experience in Consulting (4PL) Manager by Anetys Manager by Anetys

Introduction to Operations and Introduction to Operations and Supply Chain ManagementSupply Chain Management

Why study Why study OperationsOperations and and SCMSCM?.?.

What do following organizations have What do following organizations have in common?.in common?.

WAL-MartWAL-Mart which not only is a leading which not only is a leading retailer in the USA, but also has built aretailer in the USA, but also has built a network of world-class suppliersnetwork of world-class suppliers such such as as GlaxoSmithKline, Sony, MattelGlaxoSmithKline, Sony, Mattel



What do following organizations have What do following organizations have

in common?.in common?.

DELLDELL

SAP,…SAP,…



What do following organizations have What do following organizations have

in common?. ANSWER :in common?. ANSWER :

A strong committment to superior A strong committment to superior operations and SCMoperations and SCM


Why study Why study OperationsOperations?.?.

Every organization Every organization (manufacturers,(manufacturers,

transporters, deign firms,etc…)transporters, deign firms,etc…) must must

make a product or provide a make a product or provide a

service that someone values.service that someone values.



DefinitionDefinitionOperations function is the Operations function is the collection of people, technology collection of people, technology and systems within an organization and systems within an organization that has primary responsability for that has primary responsability for providing the organization’s product providing the organization’s product and services.and services.



Regardless of what career path you Regardless of what career path you might choose, might choose, you will need to you will need to knowknow something about your something about your organization’s operations function.organization’s operations function.


Why study Why study Supply Chain ManagementSupply Chain Management?.?.

I. Few organizations can-or even-I. Few organizations can-or even-want to-do everything themselves.want to-do everything themselves.

II. Most organizations function as part II. Most organizations function as part of larger supply chain.of larger supply chain.



Definition :Definition :A supply chain is a network of A supply chain is a network of manufacturers and service providersmanufacturers and service providers that work together to convert and that work together to convert and move goods from raw materials stage move goods from raw materials stage through to the end user. through to the end user.



Definition :Definition :These manufacturers and service These manufacturers and service providers are linked together throughproviders are linked together through physical, information and financial physical, information and financial flowsflows..SCM link together the operations of many SCM link together the operations of many different organizations.different organizations.

Products and Services


Supply Chain ExampleSupply Chain Example


Customers

Total satisfaction with quality, price, delivery, and service

Distributors

Package and delivery

Inventory

Producers

Finished goods, end products and services

Inventory

Suppliers

Inventory

Materials, parts, sub-assemblies, and services

Figure 7.1

Information

Cash



III. Organizations must carefully III. Organizations must carefully manage their operations and supply manage their operations and supply chains in order to chains in order to survivesurvive..


Why study Why study Supply Chain ManagementSupply Chain Management?.?.Nothing new!but formerly these Nothing new!but formerly these operations were performed operations were performed independentlyindependently..Nowdays, supply chain management Nowdays, supply chain management is the is the activeactive management of SC management of SC activities and relationships in order activities and relationships in order to maximize to maximize customer valuecustomer value and and achieve a achieve a sustainable advantagesustainable advantage..


Wal-Mart (WM) , one of the earliest Wal-Mart (WM) , one of the earliest revolutionary revolutionary proponents of SCM.proponents of SCM.Already in the late 1980s, individual stores Already in the late 1980s, individual stores sent sent informationinformation to Wal-Mart’s suppliers to Wal-Mart’s suppliers via satellite.via satellite.These suppliers then used the information These suppliers then used the information to to plan productionplan production and and ship ordersship orders to to WM’s warehouses.WM’s warehouses.WM used a WM used a dedicated fleetdedicated fleet of trucks to of trucks to ship goods from warehouses to stores in ship goods from warehouses to stores in less than 48 hours and to less than 48 hours and to replenishreplenish store store inventories about inventories about twicetwice a weeka week..


Wal-Mart (WM) , one of the earliest Wal-Mart (WM) , one of the earliest revolutionary revolutionary proponents of SCM.proponents of SCM.The result was :The result was :

- better customer servicebetter customer service (products (products nearly always available)nearly always available)

- Lower productionLower production and and transportation coststransportation costs (suppliers made and shipped only what (suppliers made and shipped only what was needed)was needed)

- Better use of retail store spaceBetter use of retail store space (low (low inventories)inventories)


Wal-Mart (WM) , one of the earliest Wal-Mart (WM) , one of the earliest revolutionary revolutionary proponents of SCM.proponents of SCM.

WM has continued to succeed WM has continued to succeed through through superior purchasingsuperior purchasing and and llogistics ogistics (two keys areas of SCM).(two keys areas of SCM).

SCM and youSCM and you

You might be asking yourself :You might be asking yourself :« if I choose the SCM option, where am« if I choose the SCM option, where am I likely to end up?. »I likely to end up?. »

The answer :The answer : Anywhere you like!Anywhere you like!


Highly competitive SCM personsHighly competitive SCM persons

are needed in virtually every are needed in virtually every

business sector.business sector.

Relative scarcity of qualifiedRelative scarcity of qualified

individuals.individuals.


You also might be asking You also might be asking yourself :yourself :

« what would my carrer path look « what would my carrer path look

like?. » like?. »

Just list a few of the possibilities.Just list a few of the possibilities.

Potential career paths in SCMPotential career paths in SCMAnalystAnalyst Uses analytical and Uses analytical and

quantitative quantitative methods to methods to understand understand predictpredict, and , and improve processes improve processes within the SCMwithin the SCM

Potential career paths in SCMPotential career paths in SCMCommodity Commodity managermanager

Acquires knowledge in Acquires knowledge in a specific market in a specific market in which the organization which the organization purchases significant purchases significant quantities of materials quantities of materials and services. Helps and services. Helps formulate long-term formulate long-term commodity strategies commodity strategies and manage long-and manage long-termterm

Relationships with Relationships with selected suppliers.selected suppliers.

Potential career paths in SCMPotential career paths in SCMCustomer service Customer service managermanager

Plans and directs Plans and directs customer service customer service teams to meet the teams to meet the needs of customers needs of customers and support and support company company operations.operations.Works closely with Works closely with marketing and marketing and sales, logistics and sales, logistics and transportation transportation departments.departments.

Potential career paths in SCMPotential career paths in SCMInternational International logistics logistics managermanager

Works closely with Works closely with manufacturing, manufacturing, marketing, and marketing, and purchasing to purchasing to create timely, cost-create timely, cost-effective effective import/export import/export supply chains.supply chains.

Potential career paths in SCMPotential career paths in SCMLogistics Logistics services services salespersonsalesperson

(3PL)(3PL)

Markets Markets transportation, transportation, warehousing, and warehousing, and specialized specialized services to other services to other company.company.

Potential career paths in SCMPotential career paths in SCM(a priori not for an ESCE student!)(a priori not for an ESCE student!)

Production Production ManagerManager

Supervises Supervises production in a production in a manufacturing manufacturing setting. setting. Responsible for a Responsible for a wide range of wide range of personnel.personnel.

Potential career paths in SCMPotential career paths in SCMPurchasing Purchasing ManagerManager

Identifies global Identifies global sources of sources of materials, selects materials, selects suppliers, arranges suppliers, arranges contracts, and contracts, and manages on-going manages on-going relationships.relationships.

Potential career paths in SCMPotential career paths in SCMSupplier Supplier development development managermanager

Measures supplier Measures supplier performance, performance, identifies suppliers identifies suppliers requiring requiring improvement, and improvement, and facilitates effort to facilitates effort to improve supplier’s improve supplier’s process.process.

Potential career paths in SCMPotential career paths in SCMSupply Chain Supply Chain ManagerManager

Reviews existing Reviews existing procedures and procedures and examines examines opportunities to opportunities to streamline production, streamline production, purchasing, purchasing, warehousing, warehousing, distribution, and distribution, and financial forecasting to financial forecasting to meet product meet product distribution needs.distribution needs.

Potential career paths in SCMPotential career paths in SCMSystems support Systems support manager (MIS)manager (MIS)

Provides analytical Provides analytical support in the support in the management of management of logistics logistics information, information, supplier supplier performance data, performance data, materials materials requirements, and requirements, and scheduling process.scheduling process.

Potential career paths in SCMPotential career paths in SCMTransportation Transportation managermanager..

Manages private, Manages private, third party, and third party, and contract carriage contract carriage systems to assure systems to assure timely and cost-timely and cost-efficient efficient transportation of transportation of all incoming and all incoming and outgoing outgoing shipments.shipments.


Even if you decide that a career in SCM is not for you, Even if you decide that a career in SCM is not for you, chances are you will still find yourself working with chances are you will still find yourself working with people in these areas.people in these areas.

The supply chain activities don’t take place in a The supply chain activities don’t take place in a vacuum, ex nihilo.vacuum, ex nihilo.

These activities require the input and feedback of other These activities require the input and feedback of other functions within the firm, as well as suppliers and functions within the firm, as well as suppliers and customers.customers.

Operations and Supply Chain Operations and Supply Chain StrategiesStrategies

DELL Computer CorporationDELL Computer Corporation

DELL has DELL has nono proprietary proprietary technologytechnology

All components are available off-the All components are available off-the shelfshelf

Dell has succeeded by Dell has succeeded by timingtiming its its purchasing, production, and purchasing, production, and distribution activities distribution activities

Introduction to Operations and Introduction to Operations and Supply ChainstrategiesSupply Chainstrategies

Elements of the businessElements of the business

- Structural elementsStructural elements : : tangible resources tangible resources (buildings, equipment, computer systems) (buildings, equipment, computer systems)

- Infrastructural elementsInfrastructural elements : : (people, (people, policies, decision rules, organizational structure choices)policies, decision rules, organizational structure choices)

- For example TQMFor example TQM : infrastructural : infrastructural elementelement


strategystrategy

3 types of strategies3 types of strategies- Mission statementMission statement : : why an organization why an organization

exists?. CORE VALUESexists?. CORE VALUES

- Business strategiesBusiness strategies- Functionnal strategiesFunctionnal strategies


- Business strategiesBusiness strategies

- Clearly identify the firm’s Clearly identify the firm’s targeted targeted customerscustomers and clearly indicate what the and clearly indicate what the operations and SC functions need to do to operations and SC functions need to do to provide value to these customers.provide value to these customers.

- Set Set performance objectivesperformance objectives that managers that managers can use to track the firm’s progress toward can use to track the firm’s progress toward fulfilling its business strategyfulfilling its business strategy

- Identify and support the development of Identify and support the development of core core competenciescompetencies in the operations and SC areas. in the operations and SC areas.


strategystrategy- Mission statementMission statement- Business strategiesBusiness strategies- Functionnal strategiesFunctionnal strategies


strategystrategy

- Core competenciesCore competencies

- Customer valueCustomer value

- Four performance dimensionsFour performance dimensions- QualityQuality- TimeTime- FlexibilityFlexibility- costcost


- core competencies : core competencies : organizational organizational strengths or abilities, developed over a strengths or abilities, developed over a long period of time, that customers find long period of time, that customers find valuablevaluable and competitors find difficult or and competitors find difficult or even even impossible to copyimpossible to copy..

- DELL and the « DELL and the « virtual integrationvirtual integration » »

- The ability of The ability of Wal-MartWal-Mart to manage its SC to manage its SC partners may in itself be consideredpartners may in itself be considered a core a core competency.competency.


- Core competenciesCore competencies- Four performance dimensionsFour performance dimensions

- QualityQuality : performance, conformance, reliabilty quality : performance, conformance, reliabilty quality- TimeTime : delivery speed, reliability, delivery window. : delivery speed, reliability, delivery window.- FlexibilityFlexibility : mix, changeover, volume flexibility (Honda : mix, changeover, volume flexibility (Honda

vs Yamaha)vs Yamaha)- Cost Cost : labor,material, engineering, quality related costs.: labor,material, engineering, quality related costs.

- Customer valueCustomer value : the organization that provides : the organization that provides the best mix of the 4 dimensions will be seen as the best mix of the 4 dimensions will be seen as providing the highets value.providing the highets value.


strategystrategy

- Trade-offsTrade-offs among performance among performance dimensionsdimensions

- Order winners and order qualifiersOrder winners and order qualifiers- Stages of alignmentStages of alignment with the Business with the Business

strategystrategy- Core competenciesCore competencies in operations and in operations and

SC. : crossdocking, SC. : crossdocking,


- Stages of alignmentStages of alignment with the Business with the Business strategystrategy

- The ultimate goal of any firm is to The ultimate goal of any firm is to develop an operations and SC develop an operations and SC strategy that supports its business strategy that supports its business strategy.strategy.


- Stages of alignmentStages of alignment with the Business with the Business strategystrategy

- Management should be able to state Management should be able to state how each operations and SC how each operations and SC structuralstructural and and infrastructuralinfrastructural choice supports the choice supports the customer’s customer’s order winners and qualifiersorder winners and qualifiers and and what what trade-offstrade-offs had to be had to be considered when making these considered when making these choice.choice.

Aligning Business and Operations Aligning Business and Operations & SC Strategies& SC Strategies

Firm AFirm A Firm BFirm B

Business Business strategystrategy

Assembles, sells, Assembles, sells, supports PC’s supports PC’s targeted at targeted at price-price-sensitive buyerssensitive buyers who require who require adequate, but not adequate, but not exceptional exceptional performance and performance and supportsupport

Assembles, sells, Assembles, sells, supports PC’s supports PC’s targeted at buyers targeted at buyers who are willing to pay who are willing to pay for for excellent excellent performanceperformance, , delivery, and delivery, and customer servicecustomer service

Operations Operations and SC and SC strategystrategy

Buy components Buy components from the lowest-cost from the lowest-cost suppliers who meet suppliers who meet mn quality and mn quality and delivery capabilitiesdelivery capabilities

Buy components Buy components from from state-of-the artstate-of-the art suppliers. Price is suppliers. Price is important but not the important but not the critical factorcritical factor





Assembles, sells, Assembles, sells, supports PC’s supports PC’s targeted at buyers targeted at buyers who are willing to pay who are willing to pay for for excellent excellent performanceperformance, , delivery, and delivery, and customer servicecustomer service


Keep Keep minimum minimum levels of inventorylevels of inventory in factories to hold in factories to hold down inventory costsdown inventory costs

Keep Keep enough enough inventoryinventory in in factories to meet rush factories to meet rush orders and shorten orders and shorten lead timeslead times





Assemble, sell PC’s Assemble, sell PC’s targeted at buyers targeted at buyers who are willing to pay who are willing to pay for for excellent excellent performanceperformance, , delivery, and delivery, and customer servicecustomer service


Hire and train Hire and train support staff to support staff to provide provide acceptable acceptable customer servicecustomer service

Use 3 days ground Use 3 days ground shipment to keep shipment to keep costs lowcosts low

Hire and train Hire and train support staff to support staff to provide provide superior superior customer servicecustomer service

Use Use overnighovernight air t air freight to minimize freight to minimize lead time to customerlead time to customer

Introduction to Operations and Introduction to Operations and Supply Chain strategiesSupply Chain strategies

strategystrategy

- Trade-offsTrade-offs among performance among performance dimensions : in a competitive market dimensions : in a competitive market place, no firm can sustain an advantage place, no firm can sustain an advantage on on all all performance dimensions indefinitly.performance dimensions indefinitly.

- Firms must make Firms must make trade-offstrade-offs and and understand which performance understand which performance dimensions are most dimensions are most valued valued by the firm’s by the firm’s targeted customertargeted customer and act accordingly. and act accordingly.


strategystrategy- Order winnersOrder winners : :

Performance dimensions that differentiate Performance dimensions that differentiate a company’s products and services from a company’s products and services from those of its competitors.those of its competitors.

- - Order qualifiers : Order qualifiers : Performance Performance dimensions on which customers expect a dimensions on which customers expect a mn level of performance (not quite decive mn level of performance (not quite decive for winning)for winning)


Example : Industrial chemical Example : Industrial chemical marketmarket

- Order winnersOrder winners : : buyers expect a certain level of buyers expect a certain level of

purety purety = conformance quality = conformance quality before they will even consider before they will even consider purchasing a chemical from a purchasing a chemical from a particular source.particular source.

Minimum requirement = order winnerMinimum requirement = order winner

BA

Order qualifiers Order winners

Conformance quality

Performance

99% pure

B

B

B

AA

A

Delivery speed

2 days

3 days

$20 per liter

Mn per order Size per 50liters

Mn order size of 100 liters

cost flexibility

Qualifier level(mn

requirements)

Business ProcessesBusiness Processes

Importance of putting in place Importance of putting in place business processesbusiness processes that effectively that effectively manage the flow of information, manage the flow of information, products and money across the products and money across the supply chain.supply chain.

- For For financial reasonsfinancial reasons- For providing For providing valuevalue to the customer to the customer

Business ProcessesBusiness Processes

Definition by APICS :Definition by APICS :« a set of logically related tasks or « a set of logically related tasks or

activities performed to achieve a activities performed to achieve a defined business outcome (physical, defined business outcome (physical, informational or monetary outcome)»informational or monetary outcome)»Primary processes : Primary processes : educating ESCE studentseducating ESCE students

Support processes : Support processes : paying tuitionpaying tuition

Development processes : Development processes : recruiting PhDrecruiting PhD

Improving Business ProcessesImproving Business Processes

Improving, simplify business Improving, simplify business process is at the very core of process is at the very core of Operations & SC management.Operations & SC management.Today’s customers are becoming Today’s customers are becoming more and more more and more demandingdemanding..What a customer might have What a customer might have considered quite satisfactory a few considered quite satisfactory a few years ago might not meet his or her years ago might not meet his or her requirements today.requirements today.

Mapping Business ProcessesMapping Business Processes

Before improving, firms must Before improving, firms must understandunderstand their business process, their business process, by developing graphic by developing graphic representations of the organizational representations of the organizational relationships and activities that make relationships and activities that make up a business process.up a business process.

That is known as That is known as mappingmapping..

Relationship mappingRelationship mapping

shows the major organizational entities shows the major organizational entities involved in a business process and how involved in a business process and how they are connected to some one another they are connected to some one another through physical, informational or financial through physical, informational or financial flow.flow.

Boxes represent the participantsBoxes represent the participants

The boxes are linked using arrows of The boxes are linked using arrows of different colors according to the type of different colors according to the type of flowflow

Family 1 Supplier

dashboard

Family 2 SupplierSteering column

Family 3 SupplierWiringOEM

Supplier of cockpitsPlastic omnium

Assembly PlantValeo

automotive OEM

Tier 2

Tier 1

Physical and information flows

Relationship Map for Cockpit Sourcing at Automotive OEM

Relationship mappingRelationship mapping

A key finding is that there are no direct A key finding is that there are no direct flows of demand forecasts between the flows of demand forecasts between the automotive OEM and the tier 2 firmsautomotive OEM and the tier 2 firms

As a result, the Tier 2 are completely As a result, the Tier 2 are completely dependent on the Tier 1 supplier for any dependent on the Tier 1 supplier for any information regarding the change in information regarding the change in demand at the OEM’s assembly plant.demand at the OEM’s assembly plant.

This provided a place to begin looking for ways to This provided a place to begin looking for ways to improve information sharing in the SC.improve information sharing in the SC.

Mapping Business Processes : Mapping Business Processes : CASECASE

A DC has to supply products to dealers A DC has to supply products to dealers located within a 50 km radius.located within a 50 km radius.The DC has received The DC has received complaintscomplaints regarding regarding lost orderslost orders and the and the timetime required to process orders for items that required to process orders for items that are already in stock at the DC.are already in stock at the DC.A A process improvementprocess improvement team has team has decided to study the process in more decided to study the process in more detail by tracing the flow of a dealer order detail by tracing the flow of a dealer order through the DC.through the DC.The team has collected following information :The team has collected following information :

Mapping Business ProcessesMapping Business Processes

Start or finish delay

Step or activity in process

Input or output

Document created

Move activity

inspection

Decision point typically requires ues or no

Dealer faxes order

Paper order

created

Order Sits in

Fax inbox

Internal mail

Delivers fax

Order Sits

in clerk’s inbox

Clerk processes

order

Is item in stock?.

Worker picks order

Inspector checks order

Transport Firm

delivers order

Dealer Receives

Order

no

yes

Clerc notifies dealer and passes order to plant

•4% of •orders lost

•2 h 1 h 1% lost

1 h

•20mn2 mn0,5% of orders incorrect

2 hNo histoty of lost, damaged or incorrect deliveries

Order-filling Process for In-stock items

Mapping Business ProcessesMapping Business ProcessesRESULTSRESULTS

adding up the times at each processadding up the times at each processStep, the team can see that the average Step, the team can see that the average time between ordering and delivery for an time between ordering and delivery for an in-stock item is about 6.4 hours on in-stock item is about 6.4 hours on average.average.Of the 6.4 hours an order spends on Of the 6.4 hours an order spends on average in the process, a full 3 hours is average in the process, a full 3 hours is waiting time, 5% of the orders are « lost » waiting time, 5% of the orders are « lost » before they even get to the picking area.before they even get to the picking area.For the orders that do survive to this point, 1 out of 200 will For the orders that do survive to this point, 1 out of 200 will be shipped with the incorrect items or quantities?be shipped with the incorrect items or quantities?

Mapping Business ProcessesMapping Business ProcessesRESULTSRESULTS

Clearly, there is room for Clearly, there is room for improvementimprovement..

Once the process has been mapped, the Once the process has been mapped, the team considers team considers ways to improveways to improve the the process.process.

The order-filling is hampered by The order-filling is hampered by unnecessary delays, « lost » paperwork, unnecessary delays, « lost » paperwork, and the inspection process that yields less-and the inspection process that yields less-than- perfect results.than- perfect results.

Mapping Business ProcessesMapping Business ProcessesSOLUTIONSSOLUTIONS

One potential improvement is to have One potential improvement is to have dealers place orders electronically (EDI) dealers place orders electronically (EDI) with the information sent directly to the with the information sent directly to the picking area.picking area.

This would cut down on the delays This would cut down on the delays associated with moving the fax through associated with moving the fax through the DC and the number of lost orders.the DC and the number of lost orders.Errors in the picking and inspection process will require Errors in the picking and inspection process will require additional changes.additional changes.

Mapping Business ProcessesMapping Business ProcessesGuidelines for Improving a ProcessGuidelines for Improving a Process

Examine each delay symbolWhat causes the delay? How long it is?.How could we reduce the delay or its impact?

Examine each activity symbolIs this an unnecessary or redundant activity?.What is the value of this activity relative to its costs?.How can we prevent errors in this activity?.

Examine each decision symbolDoes this step require an actual decision (ex : do we want to accept this customer’s order?)Or is it a simple checking activity (ex : is the inventory in stock or not?.). If it is a checking activity, can it be automated or eliminated? . Is it redundant?.

Mapping Business ProcessesMapping Business ProcessesGuidelines for Improving a ProcessGuidelines for Improving a Process

Look for any loops (arrow that go back to a previous point in The process)Would we need to repeat these activities if we had no failures?. (Ex : cooking a new Steak because the first one was cookedUncorrectly)What are the costs associated with this loop (additionnal time,resources consumed, etc…)?. Can this loop be eliminated?.

Mesuring process performanceMesuring process performance

There are countless possible There are countless possible measures of process performance, measures of process performance, many of which are derived from the many of which are derived from the four core measures seen previously :four core measures seen previously :

- QualityQuality- CostCost- TimeTime- FlexibilityFlexibility


Specific measuresSpecific measures

Productivity :Productivity :Productivity = ouputs/inputsProductivity = ouputs/inputs

EfficiencyEfficiency Efficiency = 100% (actual outputs/ standard outputs)Efficiency = 100% (actual outputs/ standard outputs)

Cycle timeCycle time


Specific measuresSpecific measures

Productivity :Productivity :Productivity = ouputs/inputsProductivity = ouputs/inputs

Single-factor productivity measuresSingle-factor productivity measuresThere is a one-to-one relationship between the output and input.There is a one-to-one relationship between the output and input.

Ex : Ex : (Number of customer calls handled)/ (support staff hours)(Number of customer calls handled)/ (support staff hours)

Ex : (number of items produced)/ (machine hours)Ex : (number of items produced)/ (machine hours)

Multifactor productivity measuresMultifactor productivity measuresHard to separate out the effects of various inputsHard to separate out the effects of various inputs

Ex : (Sales € generated)/ (labor, material, and machine costs)Ex : (Sales € generated)/ (labor, material, and machine costs)


EfficiencyEfficiencyEfficiency = 100% (actual outputs/ Efficiency = 100% (actual outputs/ standardstandard outputs) outputs)

These standards might be based on detailed studies or evenThese standards might be based on detailed studies or even

historical results.historical results.

Ex : Suppose each painter on an assembly line is expected to Ex : Suppose each painter on an assembly line is expected to paint 30 units an hour. John actually paints 25 and Peter 32:paint 30 units an hour. John actually paints 25 and Peter 32:

Efficiency of each painter : John = 100%(25/30) = 83%Efficiency of each painter : John = 100%(25/30) = 83%

Peter = 100% (32/30) = 107%Peter = 100% (32/30) = 107%

John is performing John is performing below the standardbelow the standard : additional training : additional training

or fired or reassigned to another area.or fired or reassigned to another area.

Reducing Cycle timeReducing Cycle time Cycle time drivers :Cycle time drivers :

Waiting timesWaiting times (between process steps)(between process steps)

NonessentialNonessential process steps process steps (that were essential at (that were essential at one time but no longer serve a value added, support or one time but no longer serve a value added, support or development role)development role)

Serial vs parallel process steps (cf SMED)Serial vs parallel process steps (cf SMED)

Repeated stepsRepeated steps : : do thing right the first timedo thing right the first time..BatchingBatching : sometimes necessary (consolidation) : sometimes necessary (consolidation) sometimes not sometimes not (due to habit or poor business practices)(due to habit or poor business practices)

Excessive controlsExcessive controls (unnecessary rules and regulations: how (unnecessary rules and regulations: how many signatures for a PO? )many signatures for a PO? )

Outdated technologyOutdated technology ( (PO transmitted byPO transmitted by fax instead of fax instead of

mailmail?)?)Lack of informationLack of information : : (for the decision makers)(for the decision makers)

Lack of or ineffective trainingLack of or ineffective training : : (ongoing training)(ongoing training)

Reducing Cycle timeReducing Cycle time Organizing for Cycle time reductionOrganizing for Cycle time reduction

Establish a cycle-time reduction team (CTRT).Establish a cycle-time reduction team (CTRT).

Cross functionalCross functional

Relationship mapping will be helpful for Relationship mapping will be helpful for determining what areas must be represented on determining what areas must be represented on the CTRT.the CTRT.


Identify opportunities for cycle time reduction.Identify opportunities for cycle time reduction.

To start, the CTRT should focus its efforts on To start, the CTRT should focus its efforts on those parts of the process that have the longest those parts of the process that have the longest average cycle times and those that have the average cycle times and those that have the highest level of variability.highest level of variability.


Assess the impact of improvement efforts.Assess the impact of improvement efforts.

Have average process cycle times decreased?.Have average process cycle times decreased?.

Have other performance measures as cost and Have other performance measures as cost and quality, been affected?.quality, been affected?.

Improving business processImproving business process

BENCHMARKINGBENCHMARKING

« Process of identifying, understanding, and « Process of identifying, understanding, and

adapting outstanding practices from within theadapting outstanding practices from within the

same organization or from other businesses tosame organization or from other businesses to

help improve performance ». COOKhelp improve performance ». COOK

Improving business processImproving business process

BENCHMARKINGBENCHMARKING

Competitive benchmarking : Competitive benchmarking : comparison with the comparison with the processes of competitors.processes of competitors.

Process benchmarking : Process benchmarking : comparison with the comparison with the processes of non-competitors that have been processes of non-competitors that have been identificated as having superior processes.identificated as having superior processes.

Strategies for business process Strategies for business process improvementimprovement

Internal and external Business ProcessesInternal and external Business Processes

Firms must extend their efforts to includeFirms must extend their efforts to include external SC partners.external SC partners.

Opportunities for improvement often lie in Opportunities for improvement often lie in the interfaces between the various the interfaces between the various Organizations.Organizations.

Strategies for business process Strategies for business process improvementimprovement


22èmeème Journée 29 Septembre Journée 29 Septembre

Operational logiticsOperational logitics

LogisticsLogistics Operational logiticsOperational logitics

Transportation & international Transportation & international technicstechnicsWarehousingWarehousingMaterial handlingMaterial handlingPakagingPakagingInventory managementInventory managementLogistics information systemLogistics information system

LogisticsLogistics Logistics renaissance : deregulationLogistics renaissance : deregulation

1980 for the USA and 1990 for UE, 1980 for the USA and 1990 for UE, echange in the regulatory nightmare!.echange in the regulatory nightmare!.

Motor Carrier Regulatory Reform and Motor Carrier Regulatory Reform and Modernization Act (MCA-80)Modernization Act (MCA-80)

Staggers Rail ActStaggers Rail Act

European Directives in 1990 (Railway, Air, European Directives in 1990 (Railway, Air, Road, Waterway)Road, Waterway)

LogisticsLogistics Logistics renaissance : deregulationLogistics renaissance : deregulation

Logistics quickly went from a clerical Logistics quickly went from a clerical function to an area in which savvy function to an area in which savvy firms could gain a strategic firms could gain a strategic advantage over their competitors.advantage over their competitors.

LogisticsLogistics Why Logistics is criticalWhy Logistics is critical

Logistics has evolved from a short – term Logistics has evolved from a short – term tactical concern into a long-term strategic tactical concern into a long-term strategic imperative for many firms.imperative for many firms.

Logistics cost : between 5 and 35% of total Logistics cost : between 5 and 35% of total sales cost (second post) and expecting to sales cost (second post) and expecting to grow with small and frequent shippings grow with small and frequent shippings demanded by customer.demanded by customer.

LogisticsLogistics Logistics decision areaLogistics decision area

logistics includes physical and logistics includes physical and informational flow are tightly undertwinedinformational flow are tightly undertwinedOrder management systemsOrder management systemsWarehouse storage and retrieval systemWarehouse storage and retrieval systemTransportation schedulingTransportation schedulingTracking systemsTracking systems

are all part of the logistics informationare all part of the logistics informationsystemsystem

LogisticsLogistics HIGHWAY TransportationHIGHWAY Transportation

1.1. This transportation mode dominates the This transportation mode dominates the US and UE infrastructure.US and UE infrastructure.

2.2. Most Most flexibleflexible mode of transportation mode of transportation

3.3. More More cost effectivecost effective thanks to : thanks to :- better scheduling and use of vehicle better scheduling and use of vehicle

capacity, more efficient and reliable capacity, more efficient and reliable

VehiclesVehicles- Increased cost competition due to Increased cost competition due to

deregulation.deregulation.

Financial constraintsFinancial constraintsfor being a common carrierfor being a common carrier

Truck of the Future by RENAULTTruck of the Future by RENAULT

Radiance TruckRadiance Truck

Still more futuristic!!!

Traffic jam growth in EUTraffic jam growth in EU

km encombrements

02 0004 0006 0008 000

10 00012 00014 00016 00018 000

1970 1975 1980 1985 1990 1995 2000 2005 2010

LogisticsLogistics WATERWAY TransportationWATERWAY Transportation

Ideal for materials with a high Ideal for materials with a high weight-to-value ratio, especially if weight-to-value ratio, especially if delivery speed is not critical.delivery speed is not critical.

Water-bases transportation, with Water-bases transportation, with one of the lowest ton-mile rates of one of the lowest ton-mile rates of any mode, helps to hold the cost of any mode, helps to hold the cost of high weight-to-value goods down.high weight-to-value goods down.

LogisticsLogistics AIR TransportationAIR Transportation

Ideal for materials with a low weight-to-Ideal for materials with a low weight-to-value ratio, especially if delivery reliability value ratio, especially if delivery reliability is critical.is critical.Phenomenal growth these last years in Phenomenal growth these last years in terms of the value of goods, tons, and ton-terms of the value of goods, tons, and ton-miles shipped because of :miles shipped because of :- geographic extension of SC- geographic extension of SC- Greater emphasis on delivery speed and - Greater emphasis on delivery speed and flexibilityflexibility- Changes in the SC linkages between - Changes in the SC linkages between manufacturers and consumers.manufacturers and consumers.

UPS Integrator

LogisticsLogistics RAIL TransportationRAIL Transportation

Ideal for materials with a high Ideal for materials with a high weight-to-value ratio, like waterway, weight-to-value ratio, like waterway, but more flexible.but more flexible.

Weaknesses of the railway modeWeaknesses of the railway modeDifferences of currents in EUDifferences of currents in EU

Kangaroo technicKangaroo technic

ModallohrModallohr

Sway body or mobile crateSway body or mobile cratecaisse mobilecaisse mobile

Rail HighwayRail Highway

Swot OF THE MAJOR Transportation ModesSwot OF THE MAJOR Transportation Modes

HIGHWAYHIGHWAY Flexibility to deliver Flexibility to deliver where and when where and when neddednedded

Neither the fastest Neither the fastest nor the cheapest nor the cheapest optionoption

WATERWAYWATERWAY Highly cost effective Highly cost effective for bulky itemsfor bulky items

Most effective when Most effective when linked to a linked to a multimodal systemmultimodal system

Limited Limited locationslocations

RAILRAIL Highly cost effective Highly cost effective for bulky itemsfor bulky items

Most effective when Most effective when linked to a linked to a multimodal systemmultimodal system

Limited locations, Limited locations, although less so than although less so than water.water.

Better reliability/ Better reliability/ speed of delivery speed of delivery than water.than water.

AIRAIR Quickest mode of Quickest mode of delivery. Flexible, delivery. Flexible, especially when especially when linked to the highway linked to the highway modemode

Often the most Often the most expensive mode expensive mode on per-€ basis.on per-€ basis.

WAREHOUSINGWAREHOUSINGSecond part of Logistics flows.Second part of Logistics flows.Negative concept (place where goods and Negative concept (place where goods and material sit idle!)material sit idle!)Warehousing plays a prominent role in a Warehousing plays a prominent role in a firm’s operations and SC strategy.firm’s operations and SC strategy.

Can be used to :Can be used to :- Reduce transportation costsReduce transportation costs- Improve operational flexibilityImprove operational flexibility- Shorten customer lead timesShorten customer lead times- Lower inventory costs.Lower inventory costs.

WAREHOUSINGWAREHOUSING Reducing transportation costsReducing transportation costs

- Consolidation warehousingConsolidation warehousing : LTL/FTL : LTL/FTL- Cross-dockingCross-docking : FTL/LTL (breaking up large : FTL/LTL (breaking up large

rail or truck shipments into smaller shipments rail or truck shipments into smaller shipments to local customers or receive large truckloads to local customers or receive large truckloads shipments from suppliers and re-sort the goods shipments from suppliers and re-sort the goods into customized shipments to individual into customized shipments to individual stores).stores).

- Hub-and-spoke systemHub-and-spoke system

WAREHOUSINGWAREHOUSING Reducing transportation costsReducing transportation costs

- Hub-and-spoke system combines the benefits of Hub-and-spoke system combines the benefits of consolidation and cross-docking warehouses.consolidation and cross-docking warehouses.

- With 2 main differencies :With 2 main differencies :1.1. Hubs are purely sorting or transfer facilities (no Hubs are purely sorting or transfer facilities (no

inventories).inventories).2.2. Are located at convenient, high-traffic locations, Are located at convenient, high-traffic locations,

such as major airports, water ports or the such as major airports, water ports or the intersections of interstate highways (and close intersections of interstate highways (and close to the source of goods or to final consumers as to the source of goods or to final consumers as the two others types of warehouse)the two others types of warehouse)

Improving Operational FlexibilityImproving Operational Flexibility- Postponment warehousingPostponment warehousing

- Shortening customer leadtimesShortening customer leadtimesAssortment warehousesAssortment warehousesSpot stock warehousesSpot stock warehouses

- Lowering inventory-related costsLowering inventory-related costsInventory poolingInventory poolingSafety stockSafety stock

CrossdockingCrossdocking Non-stop logistics movementNon-stop logistics movement Consolidation of products from multiple Consolidation of products from multiple

manufacturers by 3PL in a single delivery manufacturers by 3PL in a single delivery to point of sale driven « pull » inventory to point of sale driven « pull » inventory replenishment system.replenishment system.

Customized deliveries of multi-tier pallets Customized deliveries of multi-tier pallets with electronic pallet content identification with electronic pallet content identification coupled withadvanced shipping coupled withadvanced shipping notification.notification.

CrossdockingCrossdocking

Pre-consolidated palettPre-consolidated palett

Palette préallotiePalette préallotie

M1M1 M1M1 M1M1 M1M1

M2M2 M2M2 M2M2 M2M2

M3M3 M3M3 M3M3 M3M3

M4M4 M4M4 M5M5 M5M5

D1D1 D2D2 D4D4 D4D4

D2D2D1D1

MultipickMultipick

PickPick S1 S2 S3

Conso-lidating

warehouse

SUPPLIERSUPPLIER

Retail Retail outlet 1outlet 1

Retail Retail

outletoutlet 2 2Retail Retail

outlet 3outlet 3

Owning versus outsourcingOwning versus outsourcing

Third party logistics providersThird party logistics providers

1 PL 1 PL or transport for own accountor transport for own account

First level logisticsFirst level logistics1LP or One single logistics partner1LP or One single logistics partner

To perform their logistics, To perform their logistics, companies initially managed to companies initially managed to organize themselves with their own organize themselves with their own vehicle fleet (transport for own vehicle fleet (transport for own account).account).

2PL 2PL Two-level logisticsTwo-level logisticsOr 2PL ( principal and logistics supplier)Or 2PL ( principal and logistics supplier)

Most companies outsourced at least Most companies outsourced at least the "low levels" of logistics, starting with the "low levels" of logistics, starting with transport operations, working with several transport operations, working with several public carriers to atomized professions public carriers to atomized professions (monoparcels, groupings, lots).(monoparcels, groupings, lots).

3PL3PLDuring the middle of the 1990s Companies During the middle of the 1990s Companies have discovered the benefits of hiring have discovered the benefits of hiring outside, or third party, logistics expert to outside, or third party, logistics expert to manage the total flow of products.manage the total flow of products.The trend towards enterprises focusing on The trend towards enterprises focusing on their core activities has also affected their core activities has also affected logistics.logistics.By abandoning this function, enterprises By abandoning this function, enterprises have allowed a true market for service have allowed a true market for service provision to emerge in the sector.provision to emerge in the sector.

3PL3PLThree-level logisticsThree-level logistics

or 3PL and LLP (principal, logistics supplier executors' or 3PL and LLP (principal, logistics supplier executors' guarantor).guarantor).

Then the best world management practices led companies Then the best world management practices led companies to generally reduce the number of suppliers and mainly the to generally reduce the number of suppliers and mainly the number of carriers.number of carriers.

The 3PLs gradually developed concentric service The 3PLs gradually developed concentric service companies with stronger added value, leading to carrying companies with stronger added value, leading to carrying out more varied tasks such as cross-docking, co-out more varied tasks such as cross-docking, co-manufacturing, co-packing, tracing & tracking..manufacturing, co-packing, tracing & tracking..

UPSTREAM LOGISTICS •Roduction Mngt

•INVENTORY Mngt

•Maintenance

•Méthods

•INTERNAL LOGISTICS

•INVENTORY Mngt

DRP

•FACILITIES Mngt

•TRANSPORT Mngt

•DISTRIBUTION

•Sales Forecast

Commercial

•CO-PACKING

•CUSTOMER SERVICE

•CO-MANUFACTURING

•MAINTENANCE

•REVERSE Logistics

•CALL CEnters

PRODUCTION DISTRIBUTIONPurchasing/Procurement

MARKETINGSALES

INFORMATION FLOW Management

3PL, a partner for global solutions

Value added services covering all along the SC

3PL implant3PL implant

4PL4PL

An entity An entity outsideoutside the organization the organization that assembles and integrates that assembles and integrates capabilitiescapabilities from other third parties from other third parties to achieve to achieve transformational transformational efficienciesefficiencies not attainablenot attainable by the by the organization organization of its ownof its own. .

4PL4PL« Supply chain integrator that assembles, « Supply chain integrator that assembles, manages the resources, capabilities & technology manages the resources, capabilities & technology of its own organisation with those of of its own organisation with those of complementary service providers to deliver a complementary service providers to deliver a comprehensive supply chain solution» (Andersen comprehensive supply chain solution» (Andersen Consulting).Consulting).A 4PL is ideally placed to choose the best of A 4PL is ideally placed to choose the best of breed in each category by integrating 3PL breed in each category by integrating 3PL Providers, management and IT consultants to Providers, management and IT consultants to form a high-level alliance.form a high-level alliance.It is through this collection of companies that a It is through this collection of companies that a 4PL is formed, with the lead consultancy at the 4PL is formed, with the lead consultancy at the epicentre. epicentre.

4PL 4PL

Mission & vision acc to ACR Logistics ex Hays

MissionMission

Contribuer activement à ce que Contribuer activement à ce que nos clients maîtrisent leur activité nos clients maîtrisent leur activité en synchronisant les Supply en synchronisant les Supply Chains de leur 'business Chains de leur 'business community' et les transformant en community' et les transformant en une chaîne de la demande globale.une chaîne de la demande globale.

Mission & vision acc to ACR Logistics ex Hay

VisionVisionAvec 4 PS, conception, mise en œuvre et Avec 4 PS, conception, mise en œuvre et pilotage d'une solution de 'collaborative pilotage d'une solution de 'collaborative fulfilment optimisée' adoptée par nos fulfilment optimisée' adoptée par nos clients et leur 'business community'.clients et leur 'business community'.

Conférer un avantage concurrentiel à Conférer un avantage concurrentiel à nos clients en adoptant une gestion de nos clients en adoptant une gestion de la chaîne d'approvisionnement la chaîne d'approvisionnement créatrice d'une valeur durable et créatrice d'une valeur durable et tangible pour leurs clients finaux et les tangible pour leurs clients finaux et les actionnairesactionnaires

ASP

•Software SolutionDesign

•Software PortfolioManagement

• R & D•System Training•System Deployment•System Support

AL

LIANCES

Editionde logiciels

•L*2 Design &development

•Marketing• Ventes

OSP

. Gestiondu matériel

•Equipement•Télécom.• ISP

BSDistribution

BSAutomobile

BSGde Conso.

BSTechnologie

BSAutresmarchés

3PL 3PL 3PL 3PL 3PL

Conseil• Etude•Mise en oeuvre•Gestion du changement•Coaching•Formation Process/ Méthodes

•Gestion du "savoir-faire"

• SCM• CRM

Structure

4PL4PLThe 4PL: The 4PL:

Physical flow Consultant Analysts and Supply Chain OptimisersPhysical flow Consultant Analysts and Supply Chain Optimisers

To further optimize the logistics chain, company call on To further optimize the logistics chain, company call on specializedspecialized logistics consultants who add on a 4th level of parties involved logistics consultants who add on a 4th level of parties involved (or(or 4th Party Logistics). 4th Party Logistics).

These 4PLs can be 3PLs who are not execution subcontractors, These 4PLs can be 3PLs who are not execution subcontractors, but whobut who

plan and coordinate physical flows executed by natural plan and coordinate physical flows executed by natural operators (2PLs)operators (2PLs)

or providers of a supply chain (3PLs).or providers of a supply chain (3PLs).

They innovate and thus reduce total costs.They innovate and thus reduce total costs.

1,2,3,4,5 PL1,2,3,4,5 PL

5 PL5 PL

The 5PL: Integrators of execution The 5PL: Integrators of execution softwaresoftware

As a final development, physical flow As a final development, physical flow consultants (4PL) , has to incorporate experts consultants (4PL) , has to incorporate experts in the integration of in the integration of

logistics information systems (5PL) to fully pilot logistics information systems (5PL) to fully pilot information, sharing between clients, suppliers information, sharing between clients, suppliers and 3PLs.and 3PLs.

Toyota CityToyota City

Gestion d’atelier

Gestion des stocks intermédiaires

PLANSTRATEGIQUE

PIC objectif(1 site)

ADEQUATION DES CAPACITES

PIC arrêté (par famille de PF)

CALCUL DES BESOINS NETS DE PRODUITS FINIS

PDP – Prog. Dir. De Prod

MRP (DESCENTE DES NOMENCLATURES)

CRP (ORDONNANCEMENT à CAPA. INFINIES)

O.F. Ordres de FABMRP1

Opérations élémentaires sur machines

ORDONNANCEMENT à CAPA. FINIES + SUIVI + ALEAS

Gestion des stocks de PF

Réservation des composants

critiques

Niveau direction

Niveau opérationnel

Comment ?

Quoi ?Combien ? Où ?

-diminution des désirs des clients dans 3 ans-Étude de concurrence-Définition de créneaux-Site de logistique

5

4

3

2

1

approche de la logistique esiea esiea septembre 2005 septembre 2005

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