The logistics system

Saturated market

Healthy market

Ideas

Product Lifecycle

Proliferation of the range

Price war

… fast suppliers

Quick lead time …

Necessary flexibility

To be competitive:

The lessons from Japan: The 4 strenght for a company

Technolgy: to create needs

The involvement of human resources

Quality

Logistics

The different stages of logistics

Material management

Before production:

Supply Management

Raw materials inventory Management

Production Planning

Distribution management

After production:

Finished goods inventory management

Warehouse Management

Transport Management

Logistic Manager

Must ensure …

The 7 right conditions

1. Right product2. In the right quantity3. In the right condition4. In the right place5. At the right time6. The right customer7. At the right cost

The 7 right conditions

Why logistics?

A well-organized flow of materials …

… increases the turnover

… because it reduces delivery time

… and improves service levels

But at the same time reduces costs

Inventory cost: before

Inventory costs: after

Warehouse costs: before

Warehouse costs: after

Transport cost: before

Transport costs: after

Integration of functions

Because there’s an increasing need for logistics? The outsourcing

The Outsourcing ….

allows respect for delivery times

but increases the flow of goods and information to manage

Because there’s an increasing need for logistics? To save resources

Logistics helps to save

Thanks to BPR …

Inventory and transport are razionalized

Because there’s an increasing need for logistics? Customer service

Are reduced delivery times

Orders are completed

What does make logistics

Analyze the logistics system

Designing the logistics system

Build the logistics system

Manage the logistics system

This involves dealing with:Demand management

Collect and Control orders

Sales forecast

This involves dealing with: Inventory management

Location

Coverage level

This involves dealing with: Production planning

Forecasting horizon

Programming system

This involves dealing with: Supplying

Choise of supplier

How and When to order?

This involves dealing with: Distribution

Distribution network

Supply logics

Warehouse Lay-out

Transport

This involves dealing with: Customer service

What level of service to offer?

This involves dealing with: Organization

Which organizational structure?

Which information system?

Which automation systems?

It’s necessary to measure:

- The level of stocks

- The level of service

THE ANALYSIS OF THE LOGISTICS SYSTEM

Stocks affect the profit

Service affects the turnover

Where to intervene?

Where is the leak?

The operating cycle is estimated to:

THE ANALYSIS OF THE LOGISTICS SYSTEM

Establish the rationality .…

… and coordination

To eliminate the irrazionality …

… and inefficiencies

The analisys of the logistics system:

THE INFRASTRUCTURES

To verify that the logistics infrastructures of the company are adequate to accommodate the operating cycle must do three things :

1) CHECK THE DISTRIBUTION NETWORK;

THE INFRASTRUCTURES

2) CHECK THE FUNCTIONAL REQUIREMENT:

- minimum, medium and maximum annual pallets stock

per warehouse;- supply frequency;- structure and number of orders to evade;- type of product to manage.

To verify that the logistics infrastructures of the company are adequate to accommodate the operating cycle must do three things :

THE INFRASTRUCTURES

3) CHECK THE TECHNICAL SPECIFICATIONS:

- number of loading and unloading doors;- lay-out;- storage and handling system.

To verify that the logistics infrastructures of the company are adequate to accommodate the operating cycle must do three things :

THE INFRASTRUCTURES

The analisys of the logistics system:

How should be the organizational structure?

Modern

Efficient

The analisys of the logistics system:

When the organizational structure is the right one?

There’s a process responsible

The organization chart in defined

The job descriptions and the procedures are formalized and applied

Working to target

Inventory management

Calculating turnover rate

IR = Dt / St

Calculating duration index

ID = 1 / IR

Calculating weighted average stock

S average=(s n + s n + .. s n ) /T1 1 2 2 n n

Customer service: What is it?

Large assortment

Minimum order

Delivery frequency

Efficiency information system

After sales support

Suitable packing

Adequate transportation

Fast and reliable delivery

Ho do you get?

Speed

Product availability

Flexible production system

Customer service: Ho do you measure?

Speed

Punctuality

Satisfied demand

Average delay

Readiness

Design of a new logistc system

We start measuring…

The service level indicators …

… analyzed from customer perspective

Choice of strategy

Innovation strategy:

Flexible logistics

Economic logistics

Cost strategy:

Service strategy:

Rapid logistics

The main components of the logistics system are 4:

• Distribution network

• Transport

• Stocks

• Supply

Lean distribution network

Flexible Logistics:

Branched distribution network

Rapid logistics:

Centralized distribution network

Economic logistic:

Rapid transport

Flexible logistics:

Rapid logistic:

Urgent transport

Economic Logistics:

Economics transport

The product life cycle

The 4 stages:

1. Introduction2. Growth3. Maturity4. Decline

What is the right logistics for each?

Introduction: low sales

Availability

Growth: increase sales

Punctuality and quality

Maturity: constant sales

Customization

Decline: reduced sales

Low service

Choice of service level

… to be competitive

Ensure integration

Formalize the design of the logistics system

Processes and methods

Promote change

Forecast

Are made to:

Are made to:

allocate resources better

What are the main business forecast?

Human resources requirements

Raw materials

Energy

Technological system

Financial resources

Finished products selling

Forecasting horizon

• very short (less 1 month)• short ( from 1 to 6 months)• medium (less two years)• long (more than two years)

Forecast details

• item• product family• filial• etc. etc.

Supply logistics service in house contract: example

Under contract services

• bundling

• picking and handling

• external storage

Loading and unloading

Handling - a

Handling - b

Storage

Picking

Product bundling

Palletizing

… thanks for your attention

Dott. Vincenzo Presuttoinfo@studiopresutto.itwww.studiopresutto.it