Chapter 4 Tactical logistics management and supply chain

Chapter 4 Tactical logistics management and supply chain integration Chapter 11: Strategic Leadership

Tactical logistics management This chapter addresses the following four aspects: • Tactical logistics activities • Managing the goods flow • Product supply chain processes • Time management in supply chains Chapter 11: Strategic Leadership

Tactical logistics activities are those that are undertaken to implement and organise functional supply chain activities: • Buying • Making • Moving • Storing • Selling Chapter 11: Strategic Leadership

Tactical logistics activities (continued) The main tactical management objectives in a supply chain are: • Minimising time to convert orders into cash • Minimising the total WIP in the supply chain • Improving pipeline visibility • Improving visibility of demand by each partner • Improving quality • Reducing costs • Improving services Chapter 11: Strategic Leadership

Managing the goods flow Chapter 11: Strategic Leadership

Managing the goods flow (continued) Chapter 11: Strategic Leadership

Product supply chain processes • Push-based supply chain systems • Pull-based supply chain systems • Push-pull-based supply chain systems Chapter 11: Strategic Leadership

Identifying the appropriate supply chain approach Chapter 11: Strategic Leadership

Implementing a supply chain approach (Insert Table 4. 1) Characteristics of the push and pull portions of supply chains Chapter 11: Strategic Leadership

Product supply chain processes • Push-, pull- and push-pull-based supply chain systems: • Pick and ship to stock • Make to stock • Assemble to order • Make to order • Purchase and make to order • Engineer to order Chapter 11: Strategic Leadership

Product supply chain processes (continued) • See Figure 4. 4 for customer order decoupling points. • See Table 4. 2 for supply chain responses to customer demands. Chapter 11: Strategic Leadership

Customer order decoupling points Chapter 11: Strategic Leadership

Supply chain responses to customer demands Chapter 11: Strategic Leadership

Time management in supply chains • The importance of time: – Time-based competition – Reducing cycle lead time – Reliability or consistency of cycle lead time – Flexibility in order to restore reliability • Causes of long order lead times: – Ambiguous goals and objectives – Batching Chapter 11: Strategic Leadership

Time management in supply chains (continued) • Causes of long order lead times (continued): – Excessive controls – Lack of information – Lack of synchronisation in materials movement – Lack of proper training – Limited co-operation – Limited co-ordination Chapter 11: Strategic Leadership

Time management in supply chains (continued) Causes of long order lead times (continued): – Non-value-added activities – Outdated information technology – Poor communication – Poorly designed procedures and forms – Repeating process activities – Serial versus parallel operations – Waiting Chapter 11: Strategic Leadership

Time management in supply chains (continued) • Opportunities for production cycle and order lead-time reduction • Requires effective co-ordination between: – Selling – Moving – Manufacturing – Storing and – Buying activities Chapter 11: Strategic Leadership

Real-time supply chain scheduling Chapter 11: Strategic Leadership

Time management in supply chains (continued) Process time improvement approach proposed by Harrington: 1. Establish a time management team. 2. Understand given supply chain process and current cycle time and order lead time. 3. Identify opportunities for time reduction and on-time delivery improvement. 4. Develop and implement recommendations. 5. Measure performance. 6. Implement continuous improvement efforts. Chapter 11: Strategic Leadership