Distribution network desing
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Transcript of Distribution network desing
Welcome to the
Presentation session
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Team No.
08
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List of the team membersSerial
No.Name Roll No. Mail Leader
1. Sohag Hossain 10107478 [email protected]
2. Md. Zulfikar Haider 10087408
3. Md. Ashraful Islam
10047428
4. Tania khatun
10217438
5. Tusar Ahamed
10117468 [email protected]
6. Md. Delwar hossain
10087488
7. Md. Atikur Rahman
10087498
8. Md Abdul Alim
10027508
9. Hossen Soharawordi
10097518
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Chapter
2.Designing Distribution Networks
4.Demand Forecasting in a Supply Chain
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Designing Distribution
Networks
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Distribution : the steps taken to move and store a product from the supplier stage to the customer stage in a supply chain
Distribution directly affects cost and the customer experience and therefore drives profitability
Choice of distribution network can achieve supply chain objectives from low cost to high responsiveness
Examples: Wal-Mart, Dell, Proctor & Gamble, Grainger 6 of 33
The Role of Distributionin the Supply Chain
Distribution network performance evaluated along two dimensions at the highest level:• Customer needs that are met• Cost of meeting customer
needs Distribution network design options
must therefore be compared according to their impact on customer service and the cost to provide this level of service 7 of 33
Factors InfluencingDistribution Network Design
Elements of customer service influenced by network structure:
Response time Product variety Product availability Customer experience Time to market Order visibility Return ability
Supply chain costs affected by network structure: Inventories
Transportation Facilities and handling
Information8 of 33
Response time and Number of Facilities
Number of Facilities
Response Time
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Inventory Costs and Numberof Facilities
Inventory Costs
Number of facilities
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Transportation Costs and Number of Facilities
TransportationCosts
Number of facilities
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Facility Costs and Number of Facilities
FacilityCosts
Number of facilities
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Response Time
Variation in Logistics Costs and Response Time with Number of Facilities
Number of Facilities
Total Logistics Costs
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• Manager make two key decisions when designing a distribution network.1. Will
the product
be delivered
to the customer location
or picked up from
a preordained site.
2. Will product
flow through
an intermediary ( or intermed
iate location)
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Design Options for a Distribution Network
Manufacturer Storage with Direct Shipping
Manufacturer Storage with Direct Shipping and In-Transit Merge
Distributor Storage with Carrier Delivery
Distributor Storage with Last Mile Delivery
Manufacturer or Distributor Storage with Consumer Pickup
Retail Storage with Consumer Pickup
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Manufacturer Storage withDirect Shipping
Manufacturer
Retailer
Customers
Product Flow
Information Flow
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Distributor Storage with Carrier DeliveryFactories
Customers
Product FlowInformation Flow
Warehouse Storage by Distributor/Retailer
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Manufacturer Storage with Direct Shipping and In-Transit Merge Network
Factories
Retailer
Product Flow
Information Flow
In-Transit Merge by Carrier
Customers
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Distributor Storage with Last Mile DeliveryFactories
Customers
Product Flow
Information Flow
Distributor/Retailer Warehouse
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Manufacturer or Distributor Storage with Customer Pickup
Factories
Retailer
Pickup Sites
Product FlowInformation Flow
Cross Dock DC
Customer Flow
Customers
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Retail Storage with customer pickup
Retailer
Consumers
RetailerRetailer
DistributorWarehouse
Manufacturers
DistributorWarehouse
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Distribution Networks in Practice
1. The ownership structure of the distribution network can have as big as an impact as the type of distribution network
2. The choice of a distribution network has very long-term consequences
3. Consider whether an exclusive distribution strategy is advantageous
4. Product, price, commoditization, and criticality have an impact on the type of distribution system preferred by customers
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Demand
Forecasting in a Supply Chain
Janu
ary
Febru
ary
Mar
ch
April
05
1015
?
The basis for all strategic and planning decisions in a supply chain
Used for both push and pull processesExamples:
Production: scheduling, inventory, aggregate planning
Marketing: sales force allocation, promotions, new production introduction
Finance: plant/equipment investment, budgetary planning
Personnel: workforce planning, hiring, layoffs
All of these decisions are interrelated
ROLE OF FORECASTING IN A SUPPLY CHAIN
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Hypothetical example of forecasting
Demand for Mercedes E Class
TimeJan
Feb
Mar
Apr May
Jun Jul Aug
Actual demand (past sales)
Predicted demand
We try to predict the future by
looking back at the past
Predicted
demand looking back six months
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Characteristics of Forecasts
1.Forecasts are always
wrong. Should include expected value and measure of
error
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2.Long-term
forecasts are less accurate than short-term forecasts (forecast horizon is important)
3.Aggregate forecasts
are more accurate than disaggregate forecasts
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A company must be knowledgeable about numerous factors that are to the demand forecast. These are-
Past demand
Lead time of product replenishment
Planned advertising or marketing effort
State of the economy
Planned price discounts
Action that competitors have taken
Components of Forecasts
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Understand the objectives of forecasting
Integrate demand planning and forecasting
Identify major factors that influence the demand forecast
Understand and identify customer segments
Determine the appropriate forecasting technique
Establish performance and error measures for the forecast
Basic Approach to Demand Forecasting
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Qualitative: primarily subjective; rely on judgment and opinion
Time Series: use historical demand onlyStatic Adaptive
Causal: use the relationship between demand and some other factor to develop forecast
Simulation:Imitate consumer choices that give rise to
demandCan combine time series and causal
methods
Forecasting Methods
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• Collaborate in building forecasts
1
• The value of data depends on where you are in the supply chain
2
• Be sure to distinguish between demand and sales3
Forecasting in Practice
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