logistics excellence: creating a harmonious performance

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Creating a harmonious performance of a supply chain is an art. How fit is your supply chain? A balanced symphony can be achieved by a systematic approach towards supply chain design and control. A supply chain model is introduced to assess and design supply chains. A 4-step approach is proposed to effectively implement logistics excellence in the supply chain for an organisation.

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  • 1. Logistics Excellence:Creating a harmonious performanceDr. Marco Tieman(CEO LBB International & Adjunct Professor Universiti Tun Abdul Razak)Kuala Lumpur, 26 August 2014

2. www.lbbinternational.com2AgendaIntroductionOrganising your supply chainHow to get startedConclusion 3. www.lbbinternational.comIntroduction 4. A harmonious performance ...www.lbbinternational.com 5. Logistics Excellence is the art of aconductor in front of the orchestra,recognising the specific qualities of theplayers in the orchestra (read: supply chainpartners) and knowing how to weld thesetogether into a harmonious performance.www.lbbinternational.com 6. Using the specific qualities of the variousplayers, the conductor composes andimplements best practice solutions toform a balanced symphony.www.lbbinternational.com 7. Logistics excellence is reached when thecompany has (1) short supply chainlead-times, (2) low variation in thesupply chain, and (3) low waste in thesupply chain.www.lbbinternational.com 8. How fit is your supply chain?www.lbbinternational.com 9. Organising your supply chainwww.lbbinternational.com 10. www.lbbinternational.com 2012 LBB InternationalSupply chain model 11. Supply chain strategySourcing/PurchasingStrategywww.lbbinternational.comBrandBrandProduction & DistributionValue/CommercialValue/CommercialStrategyStrategyProduction & DistributionStrategyStrategySourcing/PurchasingStrategy 12. Supply chain objectives Customer service objectives (order cycletime, inventory availability, order fill rate) Logistics objectives (reduce lead-times,improve deliver reliability & flexibility, andreduce integral supply chain costs)www.lbbinternational.com 13. Product characteristicsInventoryTransporta-tion& Storage1 10 10010,0001,000www.lbbinternational.comHandlingValue densityPacking density100Source: Goor et al. (1999) 14. Market requirementsWhat value we offer in the eyes of the customer Taste Preferences (flowers): stalk/stem (short, long),flower bud (open, closed) Halal: Muslim vs. non-Muslim country Packaging (colour, materials, portions) & labellingwww.lbbinternational.com 15. Logistics control= Planning, coordinating andconducting processes and activitieswithin a chain.www.lbbinternational.com 16. www.lbbinternational.com Where is my Customer OrderDecoupling Point (CODP)?Logistics control 17. Logistics control Customisation -> CODP upstream -> need forfast, frequent and order driven delivery Floating stock -> CODP downstream -> pipelinebecomes virtual distribution centrewww.lbbinternational.comCODP 18. Supply chain resources Culture Organisation structure &interdependencies ICT = qualifier!www.lbbinternational.com 19. Supply chain business processeswww.lbbinternational.comSource: Lambert et al. (1998) 19 20. Supply chain network structurewww.lbbinternational.com 21. Supply chain peformance Efficiency (cost, profit, ROI) Effectiveness (brand, complaints,waste) Flexibility (mix flexibility, volumeflexibility) Responsiveness (lead-time) Robust (rejects, availabilityof assets)www.lbbinternational.com 22. Organising your supply chainwww.lbbinternational.comSTRATEGICFIT! 2012 LBB InternationalALIGNMENT! ALIGNMENT! 23. www.lbbinternational.comHow to get started 24. The FIRST STEP is to map the currentsupply chain (AS-IS) for the organisationand measure its performance, strategicfit and degree of alignment.www.lbbinternational.com 25. The SECOND STEP is to design thefuture supply chain (TO-BE) for theorganisation with its targetedperformance.www.lbbinternational.com 26. The THIRD STEP is to improve thefitness of the organisation:(1)identify quick wins -> motivation(2)training of staff -> capabilities(3)involve management -> endurance(4)establish project teams ->implementation power(5)establish a conductor ->coordinationwww.lbbinternational.com 27. The FOURTH STEP is to implementimprovement programs, in order to (1)shorten its supply chain lead-times, reduceits variation and waste; (2) establishstrategic fit; and (3) ensure alignment withits markets.www.lbbinternational.com 28. www.lbbinternational.comConclusion 29. Logistics excellence is the art of a conductorin front of the orchestra, recognising thespecific qualities of the players in theorchestra and knowing how to weld thesetogether into a harmonious performance.Logistics excellence can be achieved by foursteps: (1) AS-IS analysis, (2) TO-BE design,(3) improving the fitness of the organisation,and (4) effective implementation.For more information on logisticsexcellence, please contact us!www.lbbinternational.com 30. Thank youLBB InternationalB-5-8 Plaza Mont KiaraMont Kiara50480 Kuala LumpurMalaysiaDr. Marco TiemanChief Executive Officermarco@lbbinternational.comwww.lbbinternational.comwww.logisticsexcellence.blogspot.com

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