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9 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is network planning? |
The process by which the firm structures and manages the supply chain in order to:
- Find the right balance between Inventory -, Transport -, Manufacturing cost - Match supply& demand - Effectively utilize resources by smart sourcing(where do get what) |
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How to design a network - 3 Steps |
1. Network design (infrastructure): years - Number, locations and size of manufacturing plants and warehouses: infrastructure of the supply chain - Assignment of retail outlets to warehouses - Typical planning horizon = few years 2. Inventory positioning: monthly / weekly review - Identifying stocking points, safety stock, push or pull 3. Resource allocation: monthly / weekly review - Determine whether production and packaging of different products is done at the right facility: planning, Supply chain master plan:coordinating and allocating production and distribution strategies |
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Design question More or less warehouses? (5)
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Increasing # warehouses:
- An improvement in service level reduction in average lead time to customers - An increase in inventory costs increased safety stocks required to protect each warehouse against uncertainties in customer demands (centralized / local inventory) - An increase in overhead and setup costs - A reduction in outbound transportation costs: transportation costs from the warehouses to the customers - An increase in inbound transportation costs: transportation costs from the suppliers and/or manufacturers to the warehouses |
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Number of Warehouses (graph) |
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Step 1: Networking design Key strategic decisions (6) |
- Determine appropriate number of facilities such as plants and warehouses. - Determine the location of each facility - Determine the size as of each facility - Allocate space for products in each facility - Sourcing requirements: where are our suppliers / where is it produced? - Determine distribution strategy: allocation of customers to each warehouse |
SNDSLS |
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Step 1: Networking design Incorporate following features in optimization model: (6)
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- Customer-specific service level requirement - Existing warehouses - Expansion of existing warehouses - Specific flow patterns - Warehouse-to-warehouse flow - Production and bill of materials |
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Step 2: Inventory Positioning |
- Manage inventory to reduce system wide cost(and increase customer service level) - Decisions: - customer order decoupling point (were push and pull meet) or CODP: e.g. make-to-order facility - where to keep safety stock? - Where to put the CODP (from order to stock focus)? |
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Step 3: Resource allocation - Supply Chain Master planning - How to use the resources you have |
Supply chain master planning: The process of coordinating and allocating production, and distribution strategies and resources to maximize profit or minimize system-wide cost How to use the resources you have: - Sourcing strategy Where should each product be produced during the planning horizen - Supply chain master plan What are the production quantities, shipment size, and storage requirements by product, location, and time period |
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Network planning characteristics (picture)
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