global supply chain & logistics solutions
TRANSCRIPT
GLOBAL SUPPLY CHAIN &
LOGISTICS SOLUTIONS
Somsak Wisetruangrot
AFFA Logistics Institute – Chairman
ASEAN Federation of Forwarders Associations
Train of Trainers Program 8-9th December, 2020
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SUPPLY CHAIN
DESIGN
WHAT IS SUPPLY CHAIN, SUPPLY CHAIN CONFIGURATION AND WAYS TO DESIGN
FACTORS OF DECISIONS TO DESIGN SUPPLY CHAIN CONFIGURATION
PARIDIGM SHIFT IN EXECUTION OF SUPPLY CHAIN
CURRENT FACTORS OF CHANGES
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Value Chain and Logistics of Cookie
Wheat
Coconut
Grind
Crush
Stove
Cookie CustomerRice Field
Farm
(Value Added Process)
Logistics Copy right Somsak Wisetruangrot 2020 3
Value Chain and Logistics of Cookie
Wheat
Coconut
Grind
Crush
Stove
Cookie CustomerRice Field
Farm
(Value Added Process)
Logistics Copy right Somsak Wisetruangrot 2020 4
Value Chain and Logistics of Cookie
Wheat
Coconut
Grind
Crush
Stove
Cookie CustomerRice Field
Farm
(Value Added Process)
Logistics Copy right Somsak Wisetruangrot 2020 5
Value Chain and Logistics of Cookie
Wheat
Coconut
Grind
Crush
Stove
Cookie CustomerRice Field
Farm
(Value Added Process)
Logistics Copy right Somsak Wisetruangrot 2020 6
Logistics Activity
Move of Raw material
Peeling
Move of the requirement
Roast Press & Sirup
Value added process or transform
Value Added of Raw Material Move (Right place,time,amount)Banana
BananaPeeled Banana
Peeled Banana
Roasted Banana
Finished Banana
Packed Banana & Deliver to Market
RM supplier Customer
truck
Packing
Shift to Shift to
Roasted Banana
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Value Chain
Inbound Logistics
Operation OutboundLogistics
Marketing&
Sales
Service
ProcurementSystems and Technology
Organization, People and MethodsCompany Infrastructure
Primary Activities
SupportActivities
Competitive Strategy : Porter, 1980Copy right Somsak Wisetruangrot 2020 8
Supply Chain View of the World
• Integrated international networks of companies process, produce and distribute products.
Dr. Ron Tibben-LembkeCopy right Somsak Wisetruangrot 2020 9
Logistics Management Definition
“That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers’ requirements”
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Key Logistics Activities
Customer service
Demand forecasting
Inventory management
Logistics communications
Material handling
Order processing
Packaging
• Parts and service support
• Plant and warehouse site selection
• Procurement
• Reverse logistics
• Traffic and transportation
• Warehousing and storage
James R. Stock & Douglas M. Lambert McGraw-Hill 2001 Copy right Somsak Wisetruangrot 2020 11
Relationship of Logistics Activities
Demand forecasting
Material handlingProcurement
Warehousing and storage
Plant and warehouse site selection
ProductionWarehousing and storage
Traffic and transportation
Customer service
Logistics communications
Order processing
Inventory management
Demand forecasting
Packaging
Reverse logistics
Parts and service support
Reverse logistics
Logistics Communication
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Common Activities (Value Chain) & Supply Chain
SOURCING INBOUNDLOGISTICS
OPERATION OUTBOUND LOGISTICS
LINK
MATERIALS / INFORMATION
MATERIALS / INFORMATION
MATERIALS/INFORMATION
COMPANYPRODUCT/
SERVICE
PRODUCTSERVICES
&Sales/ MKTG
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Traditional Image of External Supply Chain
InternalSUPPLY CHAIN
Internal SUPPLYCHAIN
InternalSUPPLYCHAIN
Internal SUPPLY CHAIN
CUSTOMER
CUSTOMER
CUSTOMER
COMPANY A
COMPANY B
COMPANY C
COMPANYD
CUSTOMER
SourceMove & StoreMakeStore & Distribute
Process approach
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Many to One / One to Many
Suppliers Customers
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Many to One / One to Many
Suppliers Customers
Supply Chain Configuration
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Many to One / One to One
Suppliers Customers
Supply Chain Configuration
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One to One / One to ManySuppliers Customers
Supply Chain Configuration
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Suppliers
Customers
Supply Chain Configuration
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Supply Chain Push & Pull
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Factors of Decision & Strategy in Execution Supply Chain
1. Make to Order
2. Make to Stock
3. Make to Stock for Order
(Build to Order)
4. Customer Service Level vs. Cost
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Relationship of Logistics Activities to Logistics Costs
Customer service levels:
Transportation costs
Warehousing costs
Order processing
Information systems costs
Lot quantity costs
Inventory carrying costs
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Cost Trade-offs in Marketing and Logistics
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Why manage Supply Chain
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Some facts in Supply Chain
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Fragmented Order - Customized Order
Time Sensitive of Products
Current Factors of Change
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PARADIGM SHIFT: Supply Chain Execution
Disperse Manufacturing
Break Down Component & Process
Execute Supply Chain Differently
Good IT and Logistics Solutions
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QC & Shipping
[Hong Kong]
Product Design
[Hong Kong]
Zippers+…
[Singapore]
Stitching
[Cambodia]
Weaving
[Indonesia]
Yarn Spinning
[Thailand]
Li & Fung Supply Chain Style to Make GarmentsGlobally Dispersed
Manufacturing
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QC & Shipping
[Hong Kong]
Product Design
[Hong Kong]
Zippers+…
[Japan+…]
Cut & Trim
Stitching
[Indonesia]
Textile
[Taiwan]
Thread
Korea
Sourcing
[Hong Kong]
Li & Fung Supply Chain Paradigm Shift to Make GarmentsGlobally Dispersed
Manufacturing
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Suppliers CustomerFactory
Supply Chain Alternatives
Alternative Supply Chain
Challenge of Quality
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Suppliers Company
Order to supply
Order to supply
Supplier Customer
Supply Chain Alternatives
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CASE STUDY China VS HKG
Front end Back end
-Labor Incentive - Value Added
-Production - Management
- Logistics
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Key Issues in Global Supply Chain Management(Inbound)
SOURCEING SYSTEMS & USAGE OF INCOTERM
LOCATION OF SUPPLIERS
RULES AND REGULATION & PRIVILLEGE
TRANSPORT CORRIDOR AND MODAL
TRANSPORT LOGISTICS DESIGN
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Sourcing System and INCOTERMS ❖DECISION on:
❖Local Sourcing Mixed with Overseas Sourcing
❖Purely Overseas Sourcing
❖Capability & Skill of Outsourcing Company
❖Customer Service Level of Outsourcing Company
❖INCOTERMS fixes the Rights of Shipment Delivery
“ EXW, FCA, FAS, FOB ”
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FCA - FREE CARRIER (insert named place of delivery)
Buyer Risk
Seller Cost
Buyer Cost
Seller’s risk ends at unloading point
Seller pays Stevedore for loading,
trucking from factory to CFS, CFS
gate charge, FCR fee, Document
fee. + customs clearance and duty& taxes
Buyer nominated CFS
Buyer fixes Transport & Insurance
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Location of Suppliers ❖ Where in the World – Geography wise
❖ Land Locked or Land Link Country
❖ Local Infrastructure
❖ Where is Window of the Country
❖ Accessibility of Transport
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Rules and Regulation ❖ Customs Facilitation: Free Zone,
Bonded Warehouse
❖ Duty & Taxes refundable
❖ FTA
❖ Quota / Restriction of Import & Export
❖ Culture
❖ Availability of MTO and Capability
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Transport Corridors and Modes
❖ Routing
❖ Availability of Mode of Transport
❖ Possibility of Mode Shift
❖ Alternative Transport
❖ Cost/Time of Transport
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Transport Logistics Design
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Ideas of Supply Chain and Logistics Solutions
SUPPLY CHAIN & LOGISTICS SOLUTIONS:
CPFR
CONSOLIDATION / MILK RUN / C MOVE BACK HUAL
VMI
HUB & SPOKE – DOMESTICS/INTERNATIONAL DC
REGIONAL ASSEMBLY
POSTPONEMENT or DELAY DIFFERENTIATION
MULTIMODAL TRANSPORT
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SUPPLY CHAIN & LOGISTICS SOLUTIONS:
END to END VISIBILITY
RELATED TECHNOLOGY IN SUPPLY CHAIN
ABC
LEAN MANUFACTURING vs LOGISTICS
TRIPLE “A”
LAST MILE DELIVERY
REVERSE LOGISTICS
JUST IN TIME
Ideas of Supply Chain and Logistics Solutions
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CPFR Collaborative planning, forecasting, and replenishment (CPFR) - a concept that encourages and facilitates collaborative processes between supply chain partners
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Distribution Center
Purchasing Dept.
Suppliers
Purchase Order
Inventory Report& Delivery Report
DistributionInformation
Daily Delivery Order
CPFR
Convenient Store
Convenient Store
Convenient Store
Convenient Store
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Distribution Center
Inventory ReportReceive & Delivery Report
Sales Information
Sales Information
Sales Information
CPFR
Convenient Store
Convenient Store
Convenient Store
Convenient Store
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CPFR
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Buyer Consolidation
vs.Cross Dock
Cross Dock
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Consolidation and Cross Docking using 24 Truck Terminals / 18 Companies Operating in Japan
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Milk Run
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Before
Samparn LardKrabang
Saraburi
Continuous MoveMinimize Deadhead & Combine transport
Empty load
SamparnLard
Krabang
Saraburi
C-Move
Full load
Dead head
Source: SCG Logistics
C- MOVE
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BACK HUAL
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Vendor Managed Inventory -VMI
Overseas
Supplier
Logistics
Provider
Warehouse
Delivery as
Demand Forecast
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International Hub & Spoke
Case Study
Company A of Thailand is the leader in supplying Mosquito Net in Pakistan.
Company B in Thailand is competitor of Company A and wish to extend its business to Pakistan, however, they do not have knowhow to approach to this market.
Company A and Company B cost of Mosquito Net is very similar, it different in 0.5% at EXW cost. Company B is cheaper!!!
Company A is able to speedy supply Mosquito Net to Pakistan within 4 days after receiving order with a very reasonable price.
Company B is trying to consider mode of transport and cost, and it was found out that Sea Transport transit time is too long whilst Air Transport is costly and when add on Air Transport cost, the selling price will never be able to even match the selling price of Company A. It is too high.
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InternationalHub & Spoke
Case Study
A lot of disaster cases happened in Pakistan, and the Pakistan victims require 4 basic needs, however, in many cases, the houses were destroyed and the victims need to stay in camp and they badly need Mosquito Net.
International organizations provide the help to supply and Company A always gets the order.
Company B wonders how Company A could supply agilely, even to use Multimodal Transport from Thailand to Pakistan, the time and cost is still not competitive.
How is Company A doing with this supply chain and logistics.
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Case Study Solution
There are two proper solutions of this case study.
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International Hub & Spoke
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International Hub & Spoke
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Yusen Logistics Case
International Hub and Domestics Hubs
Source: Yusen Logistics Advertisement Copy right Somsak Wisetruangrot 2020 57
Domestic Hub and Distribution
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Regional Assembly
DELL’s CASE
There are a lot of suppliers around the world who produce each part of Laptop Computer and supply to DELL.
All semi-finished products from all suppliers are the part of Laptop Computer which will be delivered to the countries after DELL make final assembly and ship out the computer to such countries within the Region where the “Build to Order Factory” is located.
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Select Suitable Country to performFinal assembly
Various SuppliersAround the world
Customers in various countriesWithin the region
Regional Assembly
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Postponement or Delay Differentiation
Dye Knit Distribute
Dye Knit
Distribute
Knit
Dye
Dye
Distribute
Distribute
Red Sweater
Blue Sweater
Red Sweater
Blue Sweater
BENETTON CASE
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Multimodal Transport and Activity Based Costing and Time line
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Multimodal Transport vs. Time & Cost Module
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Multimodal Transport vs. Unimodal Transport
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End to End Visibility in Supply Chain
NOT all Industries could perform End-to-End Visibility in Supply Chain. Some can do. But most of Logisticians and Supply Chain Directors wish to seek for this solution.
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End to End Visibility in Supply Chain
Big Data Management
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Distribution Center
Inventory ReportReceive & Delivery Report
Sales Information
Sales Information
Sales Information
Can this refer to End-to-EndVisibility
Product Owners
Suppliers of Product owners
Convenient Store
Convenient Store
Convenient Store
Convenient Store
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Related Technology for logistics
Technology for Service Providers:
E-Seal
RFID for warehouse management
Port Community System (PCS)
Enterprise Resource Planning
EDI/ ebXLM for communication
Small application for communication
Drone Delivery
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E-Seal
GPSGPRSRFID
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RFID for warehouse management
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We help to build the electronic community of tomorrow
With Today’s Internet and all the “e”s available
Every action works separately therefore it’s difficult to track end 2 end status.
eCommerce, ePaperless, eManifest, eTax Incentive, eTransit, eExpress, the list goes on
Shipper FF/Customs Broker
OA
RTC
Royal Thai Customs
Airline
DC
Destination Customs
Consignee
LinerDestination
Terminal
Transporter
Export Declaration Permission
Cargo Manifest
Cargo Cargo Ship to destination
Ship to destination
Deliver to Consignee
Deliver to Consignee
Import Declaration Permission
Deliver to Consignee
Terminal
Cargo
Carrier
Booking
FF/Customs Broker
RTC
Royal Thai Customs
Export Declaration Permission
Shipper FF/Customs Broker
Cargo
FF/Customs Broker
Airline
Cargo
AirlineOA
Ship to destination
LinerDestination
Terminal
Ship to destinatio
n
OAConsignee
Deliver to Consignee
FF/Customs Broker
Booking
Carrier Terminal Liner
Cargo
Carrier
Cargo Manifest
We help to build the electronic community of tomorrow
Port Community System - What’s 1Trade?360° Logistics
CustomsBroker
Freight Forwarder Liner
Prime Mover
Container Depot
ICD Port Vessel
Exporter/Importer
ประเทศตน้ทาง/ปลายทาง
Everything become nested…
We help to build the electronic community of tomorrow
Traditional
CustomsBroker
Freight Forwarder
Liner
Prime Mover
ICD
Port
1Trade Platform for eDocument and Cargo trackingCentralize Logistics Information
CustomsBroker
Freight Forwarder
Liner Prime Mover ICD Port
1Trade
Small ApplicationCan Dofor SMART Communication
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Enterprise Resource Planning -ERP
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EDI & ebXML
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Drone Delivery
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ACTIVITY BASED COSTING
ABC
ACTIVITY COSTS:
Fixed cost Variable
Cost Other indirect
costs
Time BasedPerformance
BasedTime &
Performance Based
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ABC CLASSIFICATION
CLASS Value or Order Quantity
A 75-80% of Value
15-20%
B 10-15% of Value
30-40%
C 3-5% of Value 50-60%
How to control Inventory at the factory
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ABCCLASSIFICATION
CLASS FAST Moving Quantity
A 1 50-60%
B 2 30-40%
C 3 15-20%
Another idea for Warehouse Operator
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LEAN Manufacturing
vs. LEAN Logistics
TATK TIME & CYCLE TIME Copy right Somsak Wisetruangrot 2020 82
Identify Customer
Needs
Identify Own
Process
Create Work Flow
Response What
Customer Need
Identify and eliminate Waste of Handling, Time of each Activity
Waste
Waste Waste
Waste
Lean Logistics can be described as a way to recognise and eliminate wasteful activities from the supply chain in order to increase product flow and speed
LEAN Manufacturing
vs. LEAN Logistics
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The End of Lean:Automobile Manufacturers
Case Study: Lean Manufacturing Mantra
Minimize Inventory
Consolidated Suppliers and minimal Suppliers to reduce complexity in supply chain management and cost.
Just in Time production
Japan Tsunami in 2011 made all suppliers in Japan could not produce automobile parts for many months, led to the lack of major automobile parts around the world. + special plastics for fuel pipe German factory was exploded.
Supply Chain Director may have to consider how to do in the future with their too lean manufacturing.
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Adapt and Building up TRIPLE “A” in Supply Chain with your customers
AGILITYRespond to short-term changes in demand or supply quickly; handle external disruptions smoothly and quick response to your customers’ requirement
ADAPTATION
Adjust supply chain’s design to meet with customers’ supply chain
ALIGNMENT
Create incentives for better performance in customers’ interests, equitably share risk, costs and gain of improvement.
Do as what customer’s requirement
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Consolidation and Terminals for Domestics Distribution &Last Mile Delivery
Terminal inYangon
Terminal in Mandalay
Local Suppliers
Overseas Suppliers
Cargo from MUSE
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e-CommerceLast Mile Delivery
Yangon Hub
e-Commerce Supplier
Mandalay Hub
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Reversed Logistics
CASE STUDY: Sony Recalls Vaio Battery Packs Due to Fire Hazard
Sony recalled the lithium-ion battery packs installed in 18 different models of its Vaio Series laptops from 2013. The battery packs, made by Panasonic, may overheat, risking burns and fire.
Example only:
Expecting 60,000 Battery Pack to be replaced over USA.
What should SONY do?
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Reversed Logistics
Deconsolidation and Consolidation
Concept ONLY
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Just In Time Toyota Way
JIT is an inventory supply system that operates with very low inventories and requires fast, on-time delivery.
When parts are needed for production, they arrive from supplier just in time, which means neither before or after they are needed.
IT is used in situations where demand forecasting is reliable. It is NOT appropriate for inventories that are to be stored over a significant period of time.
CAN ONE FACTORY PERFORM JIT SYSTEM?
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CASE STUDY Shipment from Danang to Bangkok by Sea Transport was not on
board the ship at last minute on the last day before the ship departure Danang. and the buyer wish to receive the goods on the fifth day counting from the vessel departure date.
Actually sea transport transit time from Danang to Bangkok is 3 days.
What should buyer do?
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Keep in Mind
One single logistics solution could not solve all of Supply Chain Problem.
Can Marks & Spencer use VMI technique?
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Way back into Success in performing Supply Chain
A Shared Vision:
1. Create a Shared Vision
2. Establish clear Communication
Mechanisms
3. Develop clear Contingency plan and
Strategy
4. Set up KPI
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Supply Chain Risk
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Source: Dr. Hermione Parsons
Suppliers and Distribution Channels
External Environment/Regulatory Frameworks
Communications, Interpretation and
Relationships
Internal/ Enterprise Frameworks
Characteristics of Supply Chain Risk
RISK
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Supply Chain Risk Management
Australia Case
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Source: Dr. Hermione Parsons
THE END
QUESTIONS & ANSWERS
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