Prof. Dr.-Ing. Bernd Noche - uni-due.de · Prof. Dr.-Ing. Bernd Noche Fakultät für...

Prof. Dr.-Ing. Bernd Noche

Fakultät für Ingenieurwissenschaften Abteilung Maschinenbau

Transportsysteme und -logistik Keetmanstr. 3-9 47058 Duisburg

Telefon: 0203 379-2785 Telefax: 0203 379-3048 E-Mail: [email protected]

Knowledge module logistic strategies

Knowledge module logistic strategies 2

Definitions of logistics Historical development of logistics Logistics performance and logistics costs Logistic guiding principles Logistic questionnaire Competition strategies Strategic logistic projects Examples for the strategic logistics planning

• Food industry

• Textile industry

• Production plant

• Wholesale

Summary

Inhaltsverzeichnis

If you stand in front of an empty supermarket shelf…

If the book you have ordered doesn’t come…

If the delivery of your compact car is delaying…

If important medicine for your therapy is missing…

…then logistics has failed

Quelle: Prof. Straube

Terms and definitions • What is logistics? • What do you think of when you hear the word logistics?

Shipping company

Ware- house

Turnover

Logistics service providers

Congestion

Forwarding

Master plan logistic

Globalization

Environment

Material flow technologies

Means of transport

Means of transport


Terms and definitions

Definitions of logistics

o The term logistics means the total material flow of an enterprise including external logistics partners and the appropriate information flow (VDI 2520) o Logistics deals with the optimal planning, management and control of all material and goods movements from the source to the sink including the information flows releasing the physical movements cross-companies (Baumgarten, 1988) o Logistics is the process of planning, realization and control of the efficient, cost effective flowing of raw materials, semi-finished goods and finished goods and the information related to that of the point of delivery and receipt corresponding to the requirements of the customer (Pfohl, 1994) o Logistics is a special leading approach for the development, design, control and realizsation of effective and efficient flows of objects (goods, information, persons) in company-wide and cross- company value added systems (Göpfert, 1999).

6


Quelle: In Anlehnung an Christof Schulte: Logistik; Prof. Fortmann

Terms and definitions Definitions of logistics

Logistics is the integrated planning, desing, processing and control of

all transport and storing processes as well as the corresponding information flows:

Material flow

Informa- tion flow

• from the company to the customer, • from the supplier to the company,

T Sup-plier

Ware-house

Fabri-cation

Ware-house

Cus-tomer

T=Transport

T T T

I=Information

Order Demand planning

Production planning

Volume planning Order I I I I

• within the company, • as well as along the disposal procedure

7

Challenge: Customized products

Quelle: Prof. Straube

Yesterday Today

Online configurator

Online configurator

Calcuative: 32.000 variants of door linings (Audi A8) 35.000 variants of center arm rests (BMW 5er) 1032 variants of the vehicle



Roots and development of the term „logistics“

Are on the one hand in the Greek word logos (mind, numeration) and on the other hand in the French-Germanic root word loger (to provide, to support). Was first affected by military.

The French general Jomini (1779 – 1869) created with the „marechal de logis“ a position of essential meaning within the Napoleonic army system. At the beginning: Sufficient supply of troups (baggage) Later: Planning of the transport and traffic system of the military units 1956 in Stanford: Logistics becomes a subject -> Similarity between „military logistics“ and „logistical problems in business“

For about 40 years the term „logistics“ is used to describe complex goods and information flows.

9



Historical development of „civil“ logistics

Source: Gudehus

10

AGV (1970) High bay racking (1962) DP (1950) Forklift (1940) Air transport (1920)

Boats

Road building Sailers Caravans Bikes, trolleys Rollers, lifting tools

Long- distance trading Seafaring

Trade centers Trade channels Conveyor technique Canalization

Postal services World trade Discoveries Hansa (from 1100)

Vehicles (1890) Electric motor (1870) Rail (1825) Steamboats (1800)

Local transports

Coastal shipping

Continental transports

Continental trading

networks

Global transports

Logistic networks

Time




Approx. 2700 before Christ: Material transport

techniques in pyramid construction.

Bricks weighting tons were transported to the

construction site and erected there

Approx. 300 before Christ:

Revolutionary Greek rowing boats - the

newly created basis for intercontinental

commercial activities.

Quelle: DHL

11




Approx. 700: Procurement logistics in

the construction of the Mezquita

Mosque.

Colums were transported to Spain from

the whole islamic world empire.

Approx. 1200: The international company

networt „the Hanseatics“ - the cooperation for

bundeling of transports and international

maritime traffic.

Quelle: DHL

12




Approx. 1500: Progressive postal operations in

Europe - the first postage with an exactly

defined runtime .

Approx. 1800: Invention of vehicles and

rail – Expansion of logistic tasks by

new technologies and means of

transport.

Quelle: DHL

13




Approx. 1940: Militariy logistics in the

world wars – Transfer of military

logistics concepts to economy.

1956: Invention of the maritime

container - structural change in world

trade and boom of the international

flows of goods.

Source: DHL

14




Approx. 1970 - 1980: Kanban and Just-

in-time concepts – Logistic conceptions

with particular consideration of

procurement.

Approx. 1990: QR and ECR

technologies - Logistic conceptions

with particular consideration of

distribution.

Quelle: DHL

15




Present: Supply Chain Management -

the consideration of the total logistics

chain from the presupplier to the end

customer.

Presence: Advancing globalization -

efficient logistics as competitive

advantage in globalization.

Source: DHL

16



Logistic objects

Real assets (material) Trading goods, food, consumer goods, Raw materials, pre- or semi-finished goods, finished goods Production and operating materials Waste materials

Persons (material) Passengers

Information (Immaterial)

Orders, information

Depending on the logistic objects one distinguishes (Material)goods logistics Passenger transportation logistics I&K logistics

17



Logistic processes

Logistic processes or performances in the narrower sense Transport (internal and external) Turnover (storing and removal, loading and unloading) Storage (chaotic or fixed location storage) Order picking (combination of orders)

cCan be characterized as Distance bridging (transport) Time bridging (storage) Change of arrangement (picking) of objects.

Logistic processes or performances in the broader sense

Production (often also in the narrower sense), procurement, service.

18


Quelle: In Anlehnung an Arnold: Beschaffungsmanagement; Prof. Fortmann

Bridging of distance and

time

Warehouse Transport Traffic Material flow Information systems Order processing

Supply system

Relation to object

functional, relation to market

Provision management as a summing up element for the systems of logistics, materials handling and procurement

Materials handling

Logistics Procure-

ment

Information Real assets Rights Personnel Capital Energy

Material planning Inventory control Material provision Material disposal Recycling


19


Quelle: In Anlehnung an H.-Chr.Pfohl, Marketinglogistik, Berlin Heidelberg 1972, S.28;H.-Chr.Pfohl, Logistiksysteme, Berlin Heidelberg 1996, S.19; Prof. Fortmann

Main objective of logistics: Optimization of logistics efficiency

• the right product at • the right location in • the right quantity at • the right time in • the right quality at • the right costs

The 6 "R‘s" of Logistics

System output:

Logistics efficiency = Relation of system output to system input

• Carrying costs • Storage cost • Handling costs • Costs of control • System costs • Transport costs

System input: Evaluated use of factors

Logistics system: Enterprise logistics

• Procurement logistics • Production logistics • Distribution logistics • Disposal logistics

Personnel and facilities in the areas of


Objectives of logistics

20


Quelle: In Anlehnung an Christof Schulte: Logistik, S.6; Prof. Fortmann

Definition of the Logistics performance Logistics efficiency

Logistics costs Logistics service

Delivery reliability Anz. Lief.

Zeit

S C

Flexibility Anz. Lief.

Zeit

Solltermin Isttermin

S C

Coverage Anz. Artik.

Zeit

S C

Handling/Transport Umsatz Kosten

Zeit

S C

U

Storage costs Umsatz Kosten

Zeit

S C

U

Elements of the Logistics service

• Delivery time • Delivery reliability • Delivery flexibility • Delivery character • Readiness for delivery

Legend: S = Own company C = Competition

Delivery time

Zeit

S C Anz. Artik.

Logistics performance

21


Quelle: In Anlehnung an Christof Schulte: Logistik, 2.Aufl., München 1995, S. 6; Prof. Fortmann

Definition of the logistics service components

Delivery time = Time between placing of orders and availability at the customer

Delivery reliability (supplier‘s reliability, adherence to schedules) = Probability that the promised delivery time is kept

Delivery flexiblity = Ability to respond to particular customer wishes

Delivery character = Correctness of delivery according to type and quantity and condition of delivery

Willingness to supply = Percentage of articles deliverable from stock

22


Quelle: In Anlehnung an Christof Schulte: Logistik; Prof. Fortmann

Carrying costs = Interest on tied capital, insurance, devaluation, loss due to shrinkage

Logistics cost are on average 15-20% of the total costs. So they take a considerable influence on the company's results!

System costs = Design, planning and control of the material flow

Costs of control = Production program planning, scheduling, order processing, manufacturing control etc.

Costs of transport = Costs of the internal and external goods traffic

Handling costs = Order picking, handling, packing

Storage costs = Fixed costs of facility, storing and removal effort, provision of storing capacity

Important types of logistics costs

23


loingb06.ppt

Recycling industry

Pur-chasing

Manu-factu-ring

Selling

Selling

Purcha-sing

Sto-ring

Selling

Logistik- Kreislauf

Basic material industry

Processing industry

Trade

End consumer Basic

materials

For-ming

Selling

Produ-cing

Recyc-ling

Collec-ting

Areas of influence of logistics

Quelle: Prof. Fortmann

24


The path from the manufacturer to the end customer is connected by interfaces.

Those represent limits, which hinder the logistic flow.

Objective of the logistic chains is:

to transform interfaces in junctions, to adjust them continuously and

to control processes cross-system!

The logistics chain has the following advanteges:

o The combination of the main process chains avoids the repetition of logistic processes

o Transport units are coordinated, thereby, the turnover and

packing efforts are reduced.

o Logistic guiding ideas are realized!

Logistics chain

25


Logistics chain

Procurement planninb

Supplier

Customers Sales market

Material requisition planning

Inventory and Production planning

Sales planning

Order processing and production

Production control

Procurement and storage

Goods distribution

Procurement market

Informationsfluß (P

lanung, Angebot, A

uftrag)

Materialfluß (physische W

ertschöpfung)


Logistic guiding ideas:

Holism Customer orientation Quality Flow principle

Logistic guiding ideas

27

Production Procurement

Knowledge module logistic strategies Holistic consideration of logistics

Source: Andreas Beck

28

Logistics system

Objective: Optimization of the total system

Systems thinking

Competing objecitves

optimal, trans-sectoral decisions

Organizational structuring of interface tasks Cross-section thinking

Cross-section thinking

Flow thinking

Assembly, packing

Supplier

Raw material store

Production of parts

Storage

Obj

ectiv

e: c

ontin

uous

flow

of g

oods

: C

onsi

sten

cy, c

oher

ence

, spe

ed, l

ittle

tu

bule

nces

(in

terru

ptio

n =>

inve

ntor

y)

Finished goods store

Dispatch/Distribution store

End customer

Knowledge module logistic strategies Magic objective-square of logistics

Quelle: Prof. Ullmann

29

High adherence to delivery dates

Short lead time

High utilization

Low inventories

Former weighting

Today‘s weighting Low inventories

Knowledge module logistic strategies Conflict of objectives in logistics

Logistic measure

Reductions of costs in a logistics area

by

Increases of costs in another Logistics

area by

Reduction of stock levels

Reduction of inventories Increase of transport roadways

Use of thinner wrappings

Reduction of packing material demands

Increase of damages in transit

Reduction of batch sizes Reduction of inventories Increase of the number of set up times

Increase of purchase quantities

Reduction of the number of Anzahl order

transactions

Increase of inventories

Increase of availability Recution of shortages Increase of inventories

Quelle: Vermast

30


Source: In Anlehnung an Christof Schulte: Logistik, 1995, S. 10.; Prof. Fortmann

Strategy alternatives

Costs of delivery service

Shortage costs

Target As-is Total costs

Optimal delivery service

Costs

Delivery service 100 %

Required delivery service

As-is Target

Costs

Delivery service 100 %

31


Horizontal structure of business logistics

Procurement logistics Production logistics Distribution logistics

Supplier 1

Supplier 2

Supplier n

• • •

Procurement market

Customer 1

Customer 2

Customer

• • •

Sales market

Information flow Material flow


Organizatorial split-up of logistics tasks

Management

Production planning

Inventory management

Internal transport

Package

EDV

Operations Research

Vehicle fleet

Order processing

Inventory management

External transport

Sales department Production Administration


• Cost leadership Striving for the goal to become the cheapest producer of the branch Differentiation Differentiated products and services, which distinguish advantageously from the competitors

• Focus on priorities Focus on special market segments, i.e. production and sale of special delivery of specific products and markets

Basic types of competitive strategies (according to Porter)


Competition policies Cost leadership Differentiation

Focus on priorities

Procurement oriented Forwarding

agents Logistic service

providers Procurement

channel

Process oriented

Company

internal value chain

Distribution oriented Forwarding

agents Logistic service

providers Distribution

channel

Market oriented

Market

Sales activities

LOGISTICS STRATEGIES

Orientation of logistics strategies in the company


Logistic as a Productivity factor

Logistics strategy

Logistics as a decisive benefit

factor for the purchase decision

Logistics as a differentiation factor

Increase in throughputs

Reduction of material flow, transport and handling costs

Capital release by reduction of inventory or measures for the improvement of transparency

Structural, technical and organizatorial redesign of the logistics oriented value chain

Strategic relevance of logistics

Cost list Niche specialization Service differentiation

High Service level Flexibility Appropriate delivery speed


Crucial questions of strategical logistics projects

Which significance has logistic in the enterprise?

How can the logistic factors of success and targets be derived from the

business strategy?

How can an effective and efficient logistics strategy be expressed?

How can logistics strategy concepts be implemented and institutionalized?

How can these strategy concepts be operationalized and managed?

How is it possible to early identify developements which eventually effectuate

a correction or reorientation of the pursued logistics strategy?


Instruments for the strategic optimization of the logistics chain

Layout Production Marketing/ distribution

Quality

Product structure

Production structure

Technology

Vertical integration

Organisation

Logistics structure

Assortment structure

Strategy supporting principles

Logistics chain

Logistics strategy


Integrated market actors in a logistics chain

Suppliers Forwarding

agents/ logistic

Service providers

Forwarding agents/logistic Service providers

Purchasers Company

Depth of added value

Forward cooperation resepectively integration

Revers cooperation respectively integration

Added value

system as A basis

Distribution channel

Added value systems of

the purchasers

Added value systems of

the suppliers

Procure- ment channel

System partners

Lateral cooperation respectively. integration


Differentiation stages of the order generation in the logistics chain

Layout Partial production Assembly Marketing/ distribution

Production 1 Production 2

Plant engineering

Spare parts from consignment stock

• customer specific product design and manufactu-ring

• Production according to receipt of order

• Assembly of pre-assembled components and modules

• Sale of standard products

• Customer –oriented delivery service

Consumer goods Specific performance for gear drive, Car from European production Ship‘s and

diesel engines


Comparison of push and pull principle

Order

Order

Order control pulse

Material flow Direction of added value

Operation order control

Consumption control

Push principle

Pull principle

Pushing of Material flows"

„Pulling of Material flows" Information flow


Parts classification for the program and stock production

Type

A parts

Activation of production Characterization

deterministic • Date and batch size are fix • Low fluctiations in demand

B parts Order-driven • Date and batch sizes depend on current, deterministically identified demands

C parts Consumption-driven • Batch size is fix • Dates comply with parts consumption


Logistic oriented operation sector of a production system

Cycle time

Leistung

Limiting performance of the Production system

High productive capacity with reserve capacities for order flexibility

• low cycle times • low inventories

Logistic oriented operation sector of a production system

Pro

duct

ive

capa

city

Average inventory (work-in process)


Basic tools of the strategic logistics planning

Productivity analysis Process analysis Structural analysis

Product analysis

Structural analysis Structural analysis

Value-added process Resources Process reliability

Resource needs Performances Costs

Logistics chain Organization Make-or-buy

Produktstrukur Komplexität

Service requirements Delivery times Distribution structure

Costs/achievement potentials of the competitors Differentiation factors Strengths/weaknesses

Logistic as Produktivity factor

Logistics strategy

Logistics as decisive benefit factor for the purchase decision

Logistics as Differentiation factor


Domino Pizza

Company data: • Biggest pizzeria chain with

customer supply • Market share of outside pizza:

approx. 53%

• Total revenue: $ 1,98 bn. • 4800 selling points for pizza in the

USA and 12 countries • Annually more than 200 Mio pizza • No restaurant operation in selling

points for pizza

Production spectrum: • 2 sizes of pizza in special keeping

fresh boxes • 10 variants for toppings • Coke, iced

Strategic targets: • Delivery time from order: 30 min • Service level: 98 % within 30 min

2 % within 40 min, $ 3 refund 100 % under 40 min

• Price for a pizza on average: $ 9,90

Strategic questions: • Location and number of pizza centers • Distribution technology • Structure of chains / Logistics structure • Information technology


Basic structure of logistics chain Domino Pizza

Customer request

Fulfillment of customer request

Logistics chain

Order acceptance

Distribution of oders

Baking Packing

Delivery

2 min 3 min 10 min 15 min

30 min


Structural variation of the logistics chain Domino pizza

Order acceptance

Order distribution

Baking Packing

Delivery

1. Complete local logistics chain

2. Combination of central order acceptance and local pizza production and delivery

Centrale order acceptance • • •

1

2

4.800

local selling point for pizza


Refining alternatives of the logistics chain

Order acceptance

Order distribution

Baking Packing

Delivery

10 min

Preparing dough

Rolling out dough

Topping pizza

Baking Packing

Toppings, ingredients

1 min 1 min 2 min 6 min

Baking Packing

Topped pizza (purchase)


Strategic differentiation of the logistics chain

Conventional Textile manufacturer

Designen Inking of wool

and fibers

Knitting and tailoring Selling

Designing Inking of wool

fibersFasern

Knitting and tailoring Selling

own Designer

generally complete In-house production

Sale via textile trade

Collaboration with industrial

designers

20% Vertical integration

Own outlets,

franchise

Competetive advantages: higher variety of products strategic flexibility with faster change of fashion integrated information system enables an efficient

coordination between production and stock movement Consideration of short-term trends of deman akceptable price level


Alternative provision structures

centrale storage in the plant

central storage outside the plant decentral storage in the plant

Direct delivery

Production Supplier

Production Supplier

Installation locations















Plant boundary Plant boundary

Plant bourndary Plant boundary

Production Supplier

Production Supplier



Check of plant structure

LF LF LH LH

R BF/R BG BF/R

QS PS AC KR R TAB Blatt TAB

Siliconizing 4 machines

Laminating 12 maschines

Reel equipment 20 machines

Dispatch Storage space

LF= Solvent-free LH=Contains solvent R= Reel BF=bend fine BG=bend rough QS=Cross cutting

• • • • • •

Bend equipment Reel equipment Labelling

Druck

R

Sort./Verp.


Strategical questions Product lines, articles, orders

• Fluctuations (day, week, month) • Flexibility (mixed configuration)

Control rules of the PPS system • Levels of the control center • Order sequences

Capacity of machined, Personnel, space • Bins, devices, tools • Means of transport • Inventories

Production concepts • Shift models • Disturbance strategies • Quality concepts

Priorities and starting curves of the investment decision

• Machines, space, menas of transport • Organisation, Quality, personnel • PPS, information


Tactical questions How large are the inventories in front of the single aggregates (aggregate groups)?

How does the utiliatzion of the machines look like (set-up rate, waiting time, production rate etc.)?

How does the load of the transport system look like?

Which limiting performance (maximum throughput reserve) does the plant configuaration have?

Which are the dynamic weak points of the production site (bottlenecks)?

Which effect does the order mix have on the throughput?

Which service level (adherence to delivery dates, quantity) is achieved with the production strategies?

Which spectrum of cycle times (distributions) results from this?

Which effects do the campaign formings have on the utilization of downstream machines and on the cycle time?

Which effects does the shift model have on the interaction between production, transport and dispatch (buffer, warehouse)?

Which effects does the relocation of single machines have on the required hauling capacity and the demand on buffers?


Checking and design of customer delivery with the interaction central warehouse and department store

Aims: • Reduction of inventory all in all

• Increase of willingness to supply (within time frame) • More ecnomic execution of processes

Central warehouse

Department store

Services

Orders

Provision of department store Customer consignment

Remote transmission Mail/telephone

Remote transmission Follow-up movement

Express delivery

regular delivery

Telephone

Telephones, order sheets Customer Sales representative

Legend:


Questions Which article assortment should be represented in the department store?

How large ist the required bin location in the department stores and in the central warehouse?

How large becomes the rate of express deliveries?

How much is running o the provision of the follow-up movement of the department stores?

How can the replenishment of inventories for the department stores be organized?

Which rate of customers pickings is obtaines for the central warehouse?

Which service level (availability) can be achieved with the new concept respective how can the aspired nominal value be reached?

Which shipping volume results from the indicated boundary conditions (orders till 9.00 am, delivery within 24 hours ,etc.


Simulation supported system for the personnel assingment planning for the

SPAR Austrian Commodity Trading Corporation

Identification of the required number of employees per storage area

Assignment of the employees to the storage areas

Compilation of an operation schedule for each employee

Identifcation of the number of the pedestals having to be provided

Identification of the demand curve in the picking zones

Identification of the necessary number of persons for the provision of the pedestals

Identification of the necessary number of persons for the provision of the picking zones


Simulation supported system for the personnel assingment planning for the

SPAR Austrian Commodity Trading Corporation

Ambient food Frozen food

Frozen food Sausage/cheese

Fruits /vegetables

Fruits /vegetables SA A B C

WE-TS WE-OG WE-WK WE-TK

Gathering place for empty containers

Goods receipt

Reserve zone

Picking area

Goods issue


Functional range

Order acceptance

Order generation

Data processing

Times

Warehouse

Dispatching

Addition

Past

Process monitoring

Simulation

Long-term statistics

Surface

Daily statistics

Surface


Measurement for the increase of the logistic performance

Logistics appropriate Product design

Logistic information and control

system for an effective Logistics controlling

product and logistics oriented organizational

structure with a few Hierachy levels

Suitable Automation levels for production and

Material flow techniques

process and Material flow oriented Production structures


Control questions

1. What is your understanding of logistics, material flow and conveyor

technique?

2. What are the objectives of logistics?

3. What is your understanding of a logistics chain?

4. What is logistic performance?

5. Which logistic costs do you know?

6. Name 3 competetive strategies according to Porter?

7. Which logistic guiding ideas do you know?

8. Which conflicts of objective do exist in logistics?

9. Which logistic strategies do you know?


Literature on logistics

T. Gudehus, „Logistik: Grundlagen, Strategien, Anwendungen“, 4. Auflage, Springer Verlag, 2011. R. Koether, „Taschenbuch der Logistik“, Taschenbuch, 4. Auflage, Hanser Verlag, 2011. T. Gudehus, „Logistik 1: Grundlagen, Verfahren und Startegien“, 4. Auflage, Springer Verlag, 2012. T. Gudehus, „Logistik 2: Netzwerke, Systeme und Lieferketten“, 4. Auflage, Springer Verlag, 2012. D. Arnold, „Handbuch Logistik“, 3. Auflage, Springer Verlag, 2008. H.-C. Pfohl, „Logistiksysteme: Betriebswirtschaftliche Grundlagen“, 8. Auflage, 2009. R. Vahrenkamp, H. Kotzab, „Logistik: Management und Strategien“, 7. Auflage, Oldenbourg Wissenschaftsverlag, 2012.

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