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ISQA 479

ISQA 479. Network Configuration Facilities Planning. Warehouse Requirements. Forecast Customer Demand Dollar Value Number of SKUs Individual SKU Volume Variability Service Level Requirements Replenishment Lead Time To the Customer (Outbound) To the Warehouse (Inbound).

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ISQA 479

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  1. ISQA 479 Network Configuration Facilities Planning

  2. Warehouse Requirements • Forecast Customer Demand • Dollar Value • Number of SKUs • Individual SKU • Volume • Variability • Service Level Requirements • Replenishment Lead Time • To the Customer (Outbound) • To the Warehouse (Inbound)

  3. Logistics Network Configuration • Network Planning • Total Demand • Forecasts of Future Demand • Location of Customers • Location of Suppliers • Number of Facilities • Locations of Facilities • Logistics Requirements

  4. U.S. Population Distribution

  5. Oregon Population Distribution

  6. National Highway System

  7. Rail Lines

  8. Demand and Inventory Forecasting • If No Variability • No Inventory • Sequence Production to Demand • Variability • Customer Demand • Product Life Cycle • Supply Lead Times • Competition • Scale Economies • Production • Transportation • Forecasting Model

  9. Logistics Modeling • Demand Data • Volumes • Customer Locations • Supply Data • Volumes • Supplier Locations • Comparative Freight Rates, Facility Costs, Labor Costs, Tax Considerations

  10. Logistics Modeling • Customer Focused Locations (Market-Positioned) • Supplier Focused Locations (Production-Positioned) • Intermediate Locations (Intermediate-Positioned)

  11. Facility Location Decisions • Center of Gravity Method • Create a Grid for Operating Area • Volume X Horiz Grid Number for Each Location • Volume X Vert Grid Number for Each Location • Sum Horiz • Sum Vert • Sum Total Volume • Vert Total / Total Volume • Horiz Total / Total Volume

  12. Design for Logistics Concepts • Postponement / Delayed Differentiation • Localization (Euro Printer HP) • Transportation (IKEA) • Inventory (MediSupply) • Customer Requirements (Benetton)

  13. Center of Gravity Case

  14. Risk Pooling • Demand Variability Reduces as Demand Aggregated Across Locations • Impacts on Safety Stock • Square Root Rule • GM – Florida Example

  15. Logistics Facility Planning Goals • Customer Service at Specified Levels • Defines Inventory Levels • Minimum Total System Cost • Inventory Investment • Inbound Logistics • Outbound Logistics • Facility Costs • Facility Operation Costs • Potential for Growth • Buy or Lease • Incentives

  16. Logistics Facility Requirements • Ceiling Height • Space: Size and Shape • Numbers of Dock Doors • Degree of Automation • Utilities • Material Handling • Office Space Requirements • Other Special Requirements

  17. Logistics Facility Planning • Transportation Characteristics • Miles to Freeway, Airport, etc. • Congestion • Rail or Other Access • Labor Force Availability • Support Services

  18. Logistics Facility Planning • Taxation • Union Activity • Zoning • Environmental Impacts • Incentives • Facility Modifications

  19. Warehouse Operating Considerations • Minimize Picking Costs & Errors • Issue In Standard Quantities (Minimizes Counting) • Separate Similar Products • Minimize Picker Travel • Take Inventory to Picker • Order Batching

  20. Warehouse Operating Costs • Shipping 15% • Receiving 15% • Storage 20% • Order Picking 50%

  21. Global Logistics and Risk

  22. Risk and Sustainability Supply Chain Risk Sustainability Environmental Non-Renewable Resource Energy Consumption Emissions Hazardous Materials Social Responsibility Ethics Gender Equity Living Wage Labor and Relationships Organizational Profitability, LT Viability Customer Perceptions Customer Relationships • External • Governmental • Infrastructure • Supplier • Logistical • Terrorism • Natural Disasters • Accidents • Internal • Policies • Administrative • Operational • Organizational • Ethics

  23. Global Logistics and Risk • Toyota / Aisin Problem • A Regional Bakery Problem • Belgium • Russia • Singapore • Argentina • Nigeria • Canada

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