global supply chain & logistics solutions

GLOBAL SUPPLY CHAIN &

LOGISTICS SOLUTIONS

Somsak Wisetruangrot

AFFA Logistics Institute – Chairman

ASEAN Federation of Forwarders Associations

Train of Trainers Program 8-9th December, 2020

Copy right Somsak Wisetruangrot 2020 1

SUPPLY CHAIN

DESIGN

WHAT IS SUPPLY CHAIN, SUPPLY CHAIN CONFIGURATION AND WAYS TO DESIGN

FACTORS OF DECISIONS TO DESIGN SUPPLY CHAIN CONFIGURATION

PARIDIGM SHIFT IN EXECUTION OF SUPPLY CHAIN

CURRENT FACTORS OF CHANGES


Value Chain and Logistics of Cookie

Wheat

Coconut

Grind

Crush

Stove

Cookie CustomerRice Field

Farm

(Value Added Process)

Logistics Copy right Somsak Wisetruangrot 2020 3


Wheat

Coconut

Grind

Crush

Stove


Farm



Logistics Activity

Move of Raw material

Peeling

Move of the requirement

Roast Press & Sirup

Value added process or transform

Value Added of Raw Material Move (Right place,time,amount)Banana

BananaPeeled Banana

Peeled Banana

Roasted Banana

Finished Banana

Packed Banana & Deliver to Market

RM supplier Customer

truck

Packing

Shift to Shift to

Roasted Banana


Value Chain

Inbound Logistics

Operation OutboundLogistics

Marketing&

Sales

Service

ProcurementSystems and Technology

Organization, People and MethodsCompany Infrastructure

Primary Activities

SupportActivities

Competitive Strategy : Porter, 1980Copy right Somsak Wisetruangrot 2020 8

Supply Chain View of the World

• Integrated international networks of companies process, produce and distribute products.

Dr. Ron Tibben-LembkeCopy right Somsak Wisetruangrot 2020 9

Logistics Management Definition

“That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers’ requirements”


Key Logistics Activities

Customer service

Demand forecasting

Inventory management

Logistics communications

Material handling

Order processing

Packaging

• Parts and service support

• Plant and warehouse site selection

• Procurement

• Reverse logistics

• Traffic and transportation

• Warehousing and storage

James R. Stock & Douglas M. Lambert McGraw-Hill 2001 Copy right Somsak Wisetruangrot 2020 11

Relationship of Logistics Activities

Demand forecasting

Material handlingProcurement

Warehousing and storage

Plant and warehouse site selection

ProductionWarehousing and storage

Traffic and transportation

Customer service

Logistics communications

Order processing

Inventory management

Demand forecasting

Packaging

Reverse logistics

Parts and service support

Reverse logistics

Logistics Communication


Common Activities (Value Chain) & Supply Chain

SOURCING INBOUNDLOGISTICS

OPERATION OUTBOUND LOGISTICS

LINK

MATERIALS / INFORMATION

MATERIALS / INFORMATION

MATERIALS/INFORMATION

COMPANYPRODUCT/

SERVICE

PRODUCTSERVICES

&Sales/ MKTG


Traditional Image of External Supply Chain

InternalSUPPLY CHAIN

Internal SUPPLYCHAIN

InternalSUPPLYCHAIN

Internal SUPPLY CHAIN

CUSTOMER

CUSTOMER

CUSTOMER

COMPANY A

COMPANY B

COMPANY C

COMPANYD

CUSTOMER

SourceMove & StoreMakeStore & Distribute

Process approach


Many to One / One to Many

Suppliers Customers


Many to One / One to Many

Suppliers Customers

Supply Chain Configuration


Many to One / One to One

Suppliers Customers



One to One / One to ManySuppliers Customers



Suppliers

Customers



Supply Chain Push & Pull


Factors of Decision & Strategy in Execution Supply Chain

1. Make to Order

2. Make to Stock

3. Make to Stock for Order

(Build to Order)

4. Customer Service Level vs. Cost


Relationship of Logistics Activities to Logistics Costs

Customer service levels:

Transportation costs

Warehousing costs

Order processing

Information systems costs

Lot quantity costs

Inventory carrying costs


Cost Trade-offs in Marketing and Logistics


Why manage Supply Chain


Some facts in Supply Chain


Fragmented Order - Customized Order

Time Sensitive of Products

Current Factors of Change


PARADIGM SHIFT: Supply Chain Execution

Disperse Manufacturing

Break Down Component & Process

Execute Supply Chain Differently

Good IT and Logistics Solutions


QC & Shipping

[Hong Kong]

Product Design

[Hong Kong]

Zippers+…

[Singapore]

Stitching

[Cambodia]

Weaving

[Indonesia]

Yarn Spinning

[Thailand]

Li & Fung Supply Chain Style to Make GarmentsGlobally Dispersed

Manufacturing


QC & Shipping

[Hong Kong]

Product Design

[Hong Kong]

Zippers+…

[Japan+…]

Cut & Trim

Stitching

[Indonesia]

Textile

[Taiwan]

Thread

Korea

Sourcing

[Hong Kong]

Li & Fung Supply Chain Paradigm Shift to Make GarmentsGlobally Dispersed

Manufacturing


Suppliers CustomerFactory

Supply Chain Alternatives

Alternative Supply Chain

Challenge of Quality


Suppliers Company

Order to supply

Order to supply

Supplier Customer

Supply Chain Alternatives


CASE STUDY China VS HKG

Front end Back end

-Labor Incentive - Value Added

-Production - Management

- Logistics


Key Issues in Global Supply Chain Management(Inbound)

SOURCEING SYSTEMS & USAGE OF INCOTERM

LOCATION OF SUPPLIERS

RULES AND REGULATION & PRIVILLEGE

TRANSPORT CORRIDOR AND MODAL

TRANSPORT LOGISTICS DESIGN


Sourcing System and INCOTERMS ❖DECISION on:

❖Local Sourcing Mixed with Overseas Sourcing

❖Purely Overseas Sourcing

❖Capability & Skill of Outsourcing Company

❖Customer Service Level of Outsourcing Company

❖INCOTERMS fixes the Rights of Shipment Delivery

“ EXW, FCA, FAS, FOB ”


FCA - FREE CARRIER (insert named place of delivery)

Buyer Risk

Seller Cost

Buyer Cost

Seller’s risk ends at unloading point

Seller pays Stevedore for loading,

trucking from factory to CFS, CFS

gate charge, FCR fee, Document

fee. + customs clearance and duty& taxes

Buyer nominated CFS

Buyer fixes Transport & Insurance

Cop

y rig

ht S

om

sa

k W

ise

trua

ngro

t 20

20

35

Location of Suppliers ❖ Where in the World – Geography wise

❖ Land Locked or Land Link Country

❖ Local Infrastructure

❖ Where is Window of the Country

❖ Accessibility of Transport


Rules and Regulation ❖ Customs Facilitation: Free Zone,

Bonded Warehouse

❖ Duty & Taxes refundable

❖ FTA

❖ Quota / Restriction of Import & Export

❖ Culture

❖ Availability of MTO and Capability


Transport Corridors and Modes

❖ Routing

❖ Availability of Mode of Transport

❖ Possibility of Mode Shift

❖ Alternative Transport

❖ Cost/Time of Transport


Transport Logistics Design


Ideas of Supply Chain and Logistics Solutions

SUPPLY CHAIN & LOGISTICS SOLUTIONS:

CPFR

CONSOLIDATION / MILK RUN / C MOVE BACK HUAL

VMI

HUB & SPOKE – DOMESTICS/INTERNATIONAL DC

REGIONAL ASSEMBLY

POSTPONEMENT or DELAY DIFFERENTIATION

MULTIMODAL TRANSPORT


SUPPLY CHAIN & LOGISTICS SOLUTIONS:

END to END VISIBILITY

RELATED TECHNOLOGY IN SUPPLY CHAIN

ABC

LEAN MANUFACTURING vs LOGISTICS

TRIPLE “A”

LAST MILE DELIVERY

REVERSE LOGISTICS

JUST IN TIME

Ideas of Supply Chain and Logistics Solutions


CPFR Collaborative planning, forecasting, and replenishment (CPFR) - a concept that encourages and facilitates collaborative processes between supply chain partners


Distribution Center

Purchasing Dept.

Suppliers

Purchase Order

Inventory Report& Delivery Report

DistributionInformation

Daily Delivery Order

CPFR

Convenient Store

Convenient Store

Convenient Store

Convenient Store


Distribution Center

Inventory ReportReceive & Delivery Report

Sales Information

Sales Information

Sales Information

CPFR

Convenient Store

Convenient Store

Convenient Store

Convenient Store


CPFR


Buyer Consolidation

vs.Cross Dock

Cross Dock


Consolidation and Cross Docking using 24 Truck Terminals / 18 Companies Operating in Japan


Milk Run


Before

Samparn LardKrabang

Saraburi

Continuous MoveMinimize Deadhead & Combine transport

Empty load

SamparnLard

Krabang

Saraburi

C-Move

Full load

Dead head

Source: SCG Logistics

C- MOVE


BACK HUAL


Vendor Managed Inventory -VMI

Overseas

Supplier

Logistics

Provider

Warehouse

Delivery as

Demand Forecast


International Hub & Spoke

Case Study

Company A of Thailand is the leader in supplying Mosquito Net in Pakistan.

Company B in Thailand is competitor of Company A and wish to extend its business to Pakistan, however, they do not have knowhow to approach to this market.

Company A and Company B cost of Mosquito Net is very similar, it different in 0.5% at EXW cost. Company B is cheaper!!!

Company A is able to speedy supply Mosquito Net to Pakistan within 4 days after receiving order with a very reasonable price.

Company B is trying to consider mode of transport and cost, and it was found out that Sea Transport transit time is too long whilst Air Transport is costly and when add on Air Transport cost, the selling price will never be able to even match the selling price of Company A. It is too high.


InternationalHub & Spoke

Case Study

A lot of disaster cases happened in Pakistan, and the Pakistan victims require 4 basic needs, however, in many cases, the houses were destroyed and the victims need to stay in camp and they badly need Mosquito Net.

International organizations provide the help to supply and Company A always gets the order.

Company B wonders how Company A could supply agilely, even to use Multimodal Transport from Thailand to Pakistan, the time and cost is still not competitive.

How is Company A doing with this supply chain and logistics.


Case Study Solution

There are two proper solutions of this case study.


Yusen Logistics Case

International Hub and Domestics Hubs

Source: Yusen Logistics Advertisement Copy right Somsak Wisetruangrot 2020 57

Domestic Hub and Distribution


Regional Assembly

DELL’s CASE

There are a lot of suppliers around the world who produce each part of Laptop Computer and supply to DELL.

All semi-finished products from all suppliers are the part of Laptop Computer which will be delivered to the countries after DELL make final assembly and ship out the computer to such countries within the Region where the “Build to Order Factory” is located.


Select Suitable Country to performFinal assembly

Various SuppliersAround the world

Customers in various countriesWithin the region

Regional Assembly


Postponement or Delay Differentiation

Dye Knit Distribute

Dye Knit

Distribute

Knit

Dye

Dye

Distribute

Distribute

Red Sweater

Blue Sweater

Red Sweater

Blue Sweater

BENETTON CASE


Multimodal Transport and Activity Based Costing and Time line


Multimodal Transport vs. Time & Cost Module


Multimodal Transport vs. Unimodal Transport


End to End Visibility in Supply Chain

NOT all Industries could perform End-to-End Visibility in Supply Chain. Some can do. But most of Logisticians and Supply Chain Directors wish to seek for this solution.


End to End Visibility in Supply Chain

Big Data Management


Distribution Center

Inventory ReportReceive & Delivery Report

Sales Information

Sales Information

Sales Information

Can this refer to End-to-EndVisibility

Product Owners

Suppliers of Product owners

Convenient Store

Convenient Store

Convenient Store

Convenient Store


Related Technology for logistics

Technology for Service Providers:

E-Seal

RFID for warehouse management

Port Community System (PCS)

Enterprise Resource Planning

EDI/ ebXLM for communication

Small application for communication

Drone Delivery


E-Seal

GPSGPRSRFID


RFID for warehouse management


We help to build the electronic community of tomorrow

With Today’s Internet and all the “e”s available

Every action works separately therefore it’s difficult to track end 2 end status.

eCommerce, ePaperless, eManifest, eTax Incentive, eTransit, eExpress, the list goes on

Shipper FF/Customs Broker

OA

RTC

Royal Thai Customs

Airline

DC

Destination Customs

Consignee

LinerDestination

Terminal

Transporter

Export Declaration Permission

Cargo Manifest

Cargo Cargo Ship to destination

Ship to destination

Deliver to Consignee


Import Declaration Permission


Terminal

Cargo

Carrier

Booking

FF/Customs Broker

RTC

Royal Thai Customs

Export Declaration Permission

Shipper FF/Customs Broker

Cargo

FF/Customs Broker

Airline

Cargo

AirlineOA

Ship to destination

LinerDestination

Terminal

Ship to destinatio

n

OAConsignee


FF/Customs Broker

Booking

Carrier Terminal Liner

Cargo

Carrier

Cargo Manifest


Port Community System - What’s 1Trade?360° Logistics

CustomsBroker

Freight Forwarder Liner

Prime Mover

Container Depot

ICD Port Vessel

Exporter/Importer

ประเทศตน้ทาง/ปลายทาง

Everything become nested…


Traditional

CustomsBroker

Freight Forwarder

Liner

Prime Mover

ICD

Port

1Trade Platform for eDocument and Cargo trackingCentralize Logistics Information

CustomsBroker

Freight Forwarder

Liner Prime Mover ICD Port

1Trade

Small ApplicationCan Dofor SMART Communication


Enterprise Resource Planning -ERP


EDI & ebXML


Drone Delivery


ACTIVITY BASED COSTING

ABC

ACTIVITY COSTS:

Fixed cost Variable

Cost Other indirect

costs

Time BasedPerformance

BasedTime &

Performance Based


ABC CLASSIFICATION

CLASS Value or Order Quantity

A 75-80% of Value

15-20%

B 10-15% of Value

30-40%

C 3-5% of Value 50-60%

How to control Inventory at the factory


ABCCLASSIFICATION

CLASS FAST Moving Quantity

A 1 50-60%

B 2 30-40%

C 3 15-20%

Another idea for Warehouse Operator


LEAN Manufacturing

vs. LEAN Logistics

TATK TIME & CYCLE TIME Copy right Somsak Wisetruangrot 2020 82

Identify Customer

Needs

Identify Own

Process

Create Work Flow

Response What

Customer Need

Identify and eliminate Waste of Handling, Time of each Activity

Waste

Waste Waste

Waste

Lean Logistics can be described as a way to recognise and eliminate wasteful activities from the supply chain in order to increase product flow and speed

LEAN Manufacturing

vs. LEAN Logistics


The End of Lean:Automobile Manufacturers

Case Study: Lean Manufacturing Mantra

Minimize Inventory

Consolidated Suppliers and minimal Suppliers to reduce complexity in supply chain management and cost.

Just in Time production

Japan Tsunami in 2011 made all suppliers in Japan could not produce automobile parts for many months, led to the lack of major automobile parts around the world. + special plastics for fuel pipe German factory was exploded.

Supply Chain Director may have to consider how to do in the future with their too lean manufacturing.


Adapt and Building up TRIPLE “A” in Supply Chain with your customers

AGILITYRespond to short-term changes in demand or supply quickly; handle external disruptions smoothly and quick response to your customers’ requirement

ADAPTATION

Adjust supply chain’s design to meet with customers’ supply chain

ALIGNMENT

Create incentives for better performance in customers’ interests, equitably share risk, costs and gain of improvement.

Do as what customer’s requirement


Consolidation and Terminals for Domestics Distribution &Last Mile Delivery

Terminal inYangon

Terminal in Mandalay

Local Suppliers

Overseas Suppliers

Cargo from MUSE


e-CommerceLast Mile Delivery

Yangon Hub

e-Commerce Supplier

Mandalay Hub


Reversed Logistics

CASE STUDY: Sony Recalls Vaio Battery Packs Due to Fire Hazard

Sony recalled the lithium-ion battery packs installed in 18 different models of its Vaio Series laptops from 2013. The battery packs, made by Panasonic, may overheat, risking burns and fire.

Example only:

Expecting 60,000 Battery Pack to be replaced over USA.

What should SONY do?


Reversed Logistics

Deconsolidation and Consolidation

Concept ONLY


Just In Time Toyota Way

JIT is an inventory supply system that operates with very low inventories and requires fast, on-time delivery.

When parts are needed for production, they arrive from supplier just in time, which means neither before or after they are needed.

IT is used in situations where demand forecasting is reliable. It is NOT appropriate for inventories that are to be stored over a significant period of time.

CAN ONE FACTORY PERFORM JIT SYSTEM?


CASE STUDY Shipment from Danang to Bangkok by Sea Transport was not on

board the ship at last minute on the last day before the ship departure Danang. and the buyer wish to receive the goods on the fifth day counting from the vessel departure date.

Actually sea transport transit time from Danang to Bangkok is 3 days.

What should buyer do?


Keep in Mind

One single logistics solution could not solve all of Supply Chain Problem.

Can Marks & Spencer use VMI technique?


Way back into Success in performing Supply Chain

A Shared Vision:

1. Create a Shared Vision

2. Establish clear Communication

Mechanisms

3. Develop clear Contingency plan and

Strategy

4. Set up KPI


Supply Chain Risk


Source: Dr. Hermione Parsons

Suppliers and Distribution Channels

External Environment/Regulatory Frameworks

Communications, Interpretation and

Relationships

Internal/ Enterprise Frameworks

Characteristics of Supply Chain Risk

RISK

Copy right Somsak Wisetruangrot 2020 95Source: Dr. Hermione Parsons

Supply Chain Risk Management

Australia Case


Source: Dr. Hermione Parsons

THE END

QUESTIONS & ANSWERS

[email protected]


mailto:[email protected]

global supply chain & logistics solutions

Documents