Supply chain network design considering customer service level. Increasingly, supply chain management is being recognized as the management of key business processes across the network of organizations that comprise the supply chain. It is easy to follow with clear examples and useful exercises. Models for optimization of supply chain network design. Operational costs include those associated with production, handling of material at warehouses and distribution centres, and transportation. For the purposes of this note, we shall conform to common usage by using the term supply. In a closedloop supply chain, it combines both forward and reverse flows. Supply chain network design educational information and. Network design navigator is a supply chain network design application built to help you meet your strategic needs. Network design tools major components mapping mapping allows you to visualize your supply chain and solutions mapping the solutions allows you to better understand different scenarios color coding, sizing, and utilization indicators allow for further analysis data analysis data specifies the costs of your supply chain. Unresolved issues in supply chain network design 419 mathematical programming, such as linear programming or mixed integer programming. The necessity of having a supply chain strategy to help frame the network design is becoming understood and executed by a growing number of cpg companies.
In a supply chain context, this means not maximizing margins, availability and service levels. Customerserviceinfacilitylocaunresolved issues in supply chain network design. A variety of factors, ranging from outsourcing, short productlife cycles. The 3 steps your company will need to take to be in the best possible mindset for taking on network optimization. Optimization of a global distribution network for semiconductors that reduced the supply chain costs by 20%. Supply chain network design is a powerful modeling approach proven to deliver significant reduction in supply chain costs and improvements in service levels by better aligning supply chain strategies. Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Smart supply chain network design embraces a holistic view of the supply chain, taking into account the opportunities and potential shortfalls of every node, every package handoff, and every waiting period before making decisions. Designing the right global supply chain network 2019. Design of supply chain networks ss satya gopalpgdm iii unit 2 2. Network design in supply chain management using excel om dr. Supply chain management scm is the process of planning, implementing. Using strategic supply chain network design, companies can achieve dramatic savings from their supply chains. Pdf network design decisions in supply chain planning.
Supply chain network design for competitive advantage. For a more detailed discussion of the impact of the price of oil on the supply chain see this post. Feb 05, 20 network design in supply chain management using excel om dr. Understand the impact of entering and exiting new markets by developing a comprehensive plan to ensure the right capacity and capabilities to deliver effective support. Network design is important because a good design helps a firm execute its strategy. The model introduced a linear program network representation of the supply chain, with multiple levels for the product and valueadding locations, i. Designing distribution networks and applications to ebusiness the role of distribution in the supply chain factors influencing distribution network design design options for a distribution network ebusiness and the distribution network. This is a brief introductory tutorial that explains the methodologies applied in the rapidly.
By whatever name it is the sinuous, gritty, and cumbersome process by. While many have recognized the benefits of a process approach to managing the business and the supply chain, most are vague about what. Few other supply chain initiatives offer the kind of improvement potential that a network effort can bring. Subsection 2 major steps in network design donglei du unb scm 11 67. Applying optimization and analytics to the global supply chain by michael watson in djvu, fb3, rtf download ebook. Read online network design in supply chain management pdf book pdf free download link book now. And, when firms do it right, they can reduce supply chain costs by 515% which can translate into tens of millions of dollars of savings for the firm. Supply chain network design for critical needs with outsourcing, a. How much capacity should an operation plan to have. It incorporates endtoend supply chain cost, including purchase, production, warehousing, inventory and transportation. Network design in supply chain management pdf pdf book. A supply chain network can be strategically designed in such a way as to reduce the cost of the supply chain. As the figure shows, every stop that a product makes between raw materials and a customer is a node of the network. Critical role of transportation in global economy 4 introduction 5 global supply chain flows 5 the economic basis and logic of improved global trade 11 absolute and comparative advantage 11 contributing factors for global flows and trade 12.
What are the factors influencing supply chain network design decisions. What you need is a technology that has a powerful analytics engine, but is nimble enough to adapt when it needs to. Supply chain management supply chain management managing complex and dynamic supply and demand networks. Supply chain network theory supply chain network theory is an integrated theory that includes. Use features like bookmarks, note taking and highlighting while reading supply chain network design. Here is the raw transportation rate file from the end of chapter questions. Supply chain strategy network design case study challenge background au.
The logistica spreadsheet shows you the calculations from the book. Designing global supply chain networks decision tree and. Network design in supply chain management using excel om. To logistics network design in organizing their inventory, ware house, and. All books are in clear copy here, and all files are secure so dont worry about it. Introduction why should an organization take a total network perspective.
Download network design in supply chain management pdf book pdf free download link or read online here in pdf. Supply chain network design with preferential tariff under. Youll learn how to use supply chain network design to select the right number, location, territory, and size of warehouses, plants, and. Supply chain network design with excel supply chain modeler. Pdf reliable supply chain network design bill chan. Designing supply chain network for each industry involves arriving at a satisfactory design framework taking into all elements like product, market, process, technology, costs, external environment and factors and their impact on the business. Supply chain network and technology free training guide. It would not be an exaggeration to say that two of the planets most successful companies amazon and walmart built their businesses around supply chain network design. Network design decisions in supply chain planning semantic scholar. Pdf structuring global supply chain networks is a complex decisionmaking process. The future of supply chain network design most leading companies perform supply chain network design scnd analysis to define the structure of their supply chain as well as the key operations that will be performed at each location in the resulting network.
Optimal steadystate design of supply chain networks 33 the establishment of warehouses and distribution centres incurs a. Network design decisions in supply chain planning 11 the last two categories of decision variables inventory and routing have re ceived increasing attention in the last decade. For example, the supply chain for a restaurant will not be the same as a clothing retailer or a management consultancy. Supply chain network design scnd decisions, as the most important strategic level decisions in supply chain management, are concerned with complex interrelationships between various tiers, such as suppliers, plants, distribution centers, and customer zones as well as determining the number, location. Chapter 5 network design in the supply chain truefalse 1. Supply chain management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. Download it once and read it on your kindle device, pc, phones or tablets. To do it right, it requires analytics and optimization. A strategic framework for logistics network decisions 3.
Multi process network, sharing knowledge, information, and enabling transactions can be managed only with an electronically enabled technology solutions. Establish has a long trackrecord within supply chain design. Supply chain network analysis makes use of a big picture thinking approach to the supply chain network design from the conceptualization to the implementation. Here the major decisions to be made are on the number, locations and size of manufacturing plants and warehouses and the assignment of retail outlets to warehouses, etc. Heuristics are still employed to aid these methods in the search for. Designing the right global supply chain network wharton faculty. It would be no exaggeration to state that two of the planets largest companies, walmart and amazon, have built their successful businesses around. Network design navigator is a supply chain network design application built to. All content included on our site, such as text, images, digital downloads and other, is the property of its content suppliers and protected by us and international. The focus of this paper is on how these forces could guide the research on the design and management of global supply chains, given the past three decades of. Supply chain network design for critical needs with outsourcing.
Optimal steadystate design of supply chain networks. The forward supply chain includes the activities of procurement, design, manufacture and distribution to consumer while reverse supply chain is related to process of inspecting, sorting, disassembly for the purposes of reuse, reprocessing and redesign. The supply chain management scm profession has continued to change and evolve to fit the needs of the growing global supply chain. The supply chain network consists of suppliers, warehouses, distribution centers, and retail outlets which provide the flow of material and products. Maximizing value with network design and transportation. The analysis is focused on determining the distribution nodes based on factors such as demand concentration, customer locations, and service requirements. Solution techniques for network design 1 optimizing facility location models 2 heuristic approaches 3 simulation technique 3 1. They told us what elements of supply chain security they believe will be most critical in the future. This shows 300 shipments from atlanta to chicago with different modes. Understanding the optimization behind supply chain design projects kindle edition by watson, michael, hoormann, sara, cacioppi, peter, jayaraman, jay. A supply chain consists of manufacturers, retailers and others involved in filling a customer order. I network theory in order to identify the structure of the supply chain and relationships i optimization theory in order to capture the decisionmakers criteria in the form of objective functions, the decision. Its often useful to think about your supply chain as a network.
Operations management and supply chain network theory. A conceptual framework february 7, 2012 this paper is a first step in our research to understand the role of innovation in supply chain management, and it is intended to serve as a starting point for understanding and examining the concept. Describe a strategic framework for facility location. The capacities of both have to be determined as part of the design of the distribution network. A firms supply chain consists of three major parts. The chain stable network formed in the constructive proof of the existence theorem is upstreamoptimal. The role of network design in the supply chain united.
The primary purpose of a supply chain network design is to assess company policies and programs and to meet targets to accomplish long. Logix is a fullfeatured supply chain optimization and distribution network design software application that helps you quickly solve even your most complex supply chain problems. Distribution network design supply chain network strategy product flow, inventory and capacity optimization. The model can treat both cases with and without preferential tariff uniformly upon given regional economic partnership scheme. The analysis includes suppliers, manufacturing, warehousing, and distribution. The chain is made up of nodes or links, which can include multiple manufacturers for parts, then the completed product, then the warehouse where it is stored, then its distribution centers, and finally, the store where a consumer can purchase it. The case studies below are just a few examples of achievements from establish supply chain consultants together with clients. Cscmp supply chain management definitions and glossary. Supply chain network design is necessary to implement a supply chain that can quickly and efficiently distribute the products. A supplychain network can be strategically designed in such a way as to reduce the cost of the supply chain. Network design in supply chain management emerald insight. With the supply chain covering a broad range of disciplines, the definition of what is a supply chain can be unclear. Every single decision made in your supply chain will ultimately impact service levels, profitability and competitive advantage. The network design in supply chain determines its physical arrangement, design, structural layout and infrastructure of the supply chain.
Applying optimization and analytics to the global supply chain ft press operations management watson, michael, lewis, sara, cacioppi, peter, jayaraman, jay on. Qiang, papers in regional science 2011, 90, 123142, where additional background as well as references can be found. Optimal steadystate design of supply chain networks 40 each product is stored twice before reaching the customer. Wielandwallenburg, 2011 supply chain management scm is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. The typical inputs to such a process consist of a set of customer. Now, experts at ibm and northwestern university have brought together both the rigorous principles and the practical applications you need to master. Sc consulting, a supply chain consulting firm, must decide on the location of its home offices. The role of network design in the supply chain free download as powerpoint presentation. Savings of 15% to 35% with improved customer service and lower carbon emissions often. Network design decisions in supply chain planning kluedo. The model seeks to determine the optimal location and types of distribution centers. The role and importance of transportation 3 transportation profile. What is the role of network design decisions in the supply chain. Network design in the supply chain exercise solutions 1.
Mar 15, 2016 supply chain network design is one of the most critical disciplines of supply chain management. Supply chain network design decisions include the location of manufacturing, storage, or transportationrelated facilities and the allocation of capacity and roles to each facility. The elements of a supply chain will vary with business and product type. What is supply chain network design and how does it work. More supply chain leaders in cpg companies are intent on optimizing their network. A supply chain is a collection of suppliers required to create one specific product for a company. Its clients are located primarily in the 16 states listed in table 55. Distribution refers to the steps taken to move and store a product from the supplier stage to a customer stage in the supply chain. Also, some insights on the impact of various factors on network. Jun 30, 2018 designing global supply chain networks. Supply chain network design considering customer service.
Supply chain network design due to the significant impact that supply chain design has on the cost and service provided by a company, it is critical that managers be knowledgeable about how to optimize the flow of products and goods within their supply chain. As in previous studies, weve surveyed a global group of experts using the realtime delphi method. A systemoptimization perspective for supply chain network design for critical needs with outsourcing, as we demonstrate, captures, in a graphical manner, the options available, and provides. Supply chain management i about the tutorial supply chain management can be defined as the management of flow of products and services, which begins from the origin of products and ends with the products consumption at the enduser. How are the following optimization methods used for facilityypy location and. The terms network design and supply chain network design scnd are often. A slightly modified algorithm produces the downstreamoptimal chain stable network.
Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. Use network optimization tools to determine use cases for existing or new infrastructure and develop strategies to launch new products and position inventory in the supply chain. It is an important driver for growth and expansion of businesses. In essence, the firm must balance the costs of opening new warehouses with the advantages of being close to the customer. Stanford supply chain forum call it distribution or logistics or supply chain management. Supply chain network design and location intelligence supply chain network design is the process of building and modeling a supply chain to better understand the costs and time associated with bringing goods to market with the resources and locations available.
Often times scm can be confused with the term logistics management. Supply chain network design for competitive advantage the future of supply chain network design most leading companies perform supply chain network design scnd analysis to define the structure of their supply chain as well as the key operations that will be performed at each location in the resulting network. Supply chain management scm is the process of planning, implementing and controlling the. At profit point, we apply our advanced practical knowledge and optimization technology to your companys data to deliver numerous scenarios that optimize your supply chain network design.