Anda di halaman 1dari 22

Supply Chain Management

(3rd Edition)
Chapter 5
Network Design in the Supply
Chain

2007 Pearson Education

5-1

Outline
A strategic framework for facility location
Multi-echelon networks
Gravity methods for location
Plant location models

2007 Pearson Education

5-2

Network Design Decisions


Facility role
Facility location
Capacity allocation
Market and supply allocation

2007 Pearson Education

5-3

Factors Influencing
Network Design Decisions
Strategic
Technological
Macroeconomic
Political
Infrastructure
Competitive
Logistics and facility costs

2007 Pearson Education

5-4

The Cost-Response Time Frontier


Hi

Local FG
Mix
Regional FG
Local WIP

Cost

Central FG
Central WIP
Central Raw Material and Custom production
Custom production with raw material at suppliers

Low
Low
2007 Pearson Education

Response Time

Hi
5-5

Service and Number of Facilities


Response
Time

Number of Facilities
2007 Pearson Education

5-6

Where inventory needs to be for a one week order


response time - typical results --> 1 DC

Customer
DC

2007 Pearson Education

Where inventory needs to be for a 5 day order


response time - typical results --> 2 DCs

Customer
DC

2007 Pearson Education

Where inventory needs to be for a 3 day order


response time - typical results --> 5 DCs

Customer
DC

2007 Pearson Education

Where inventory needs to be for a next day order


response time - typical results --> 13 DCs

Customer
DC

2007 Pearson Education

Where inventory needs to be for a same day / next


day order response time - typical results --> 26 DCs

Customer
DC

2007 Pearson Education

Costs and Number of Facilities


Inventory
Facility costs

Costs

Transportation

Number of facilities
2007 Pearson Education

5-12

Cost Buildup as a Function of Facilities


Cost of Operations

Total Costs

Percent Service
Level Within
Promised Time
Facilities
Inventory
Transportation
Labor

Number of Facilities
2007 Pearson Education

5-13

A Framework for
Global Site Location
Competitive STRATEGY
INTERNAL CONSTRAINTS
Capital, growth strategy,
existing network
PRODUCTION TECHNOLOGIES
Cost, Scale/Scope impact, support
required, flexibility
COMPETITIVE
ENVIRONMENT

GLOBAL COMPETITION

PHASE I
Supply Chain
Strategy

PHASE II
Regional Facility
Configuration

PRODUCTION METHODS
Skill needs, response time

2007 Pearson Education

REGIONAL DEMAND
Size, growth, homogeneity,
local specifications
POLITICAL, EXCHANGE
RATE AND DEMAND RISK

PHASE III
Desirable Sites

FACTOR COSTS
Labor, materials, site specific

TARIFFS AND TAX


INCENTIVES

PHASE IV
Location Choices

AVAILABLE
INFRASTRUCTURE

LOGISTICS COSTS
Transport, inventory, coordination

5-14

Conventional Network
Materials
DC

Vendor
DC

Vendor
DC

Vendor
DC

Finished
Goods DC

Customer
DC

Customer
Store

Component
Manufacturing
Customer
DC

Plant
Warehouse
Components
DC

Final
Assembly
2007 Pearson Education

Customer
Store

Finished
Goods DC

Customer
Store
Customer
Store

Customer
DC

Customer
Store
5-15

Tailored Network: Multi-Echelon


Finished Goods Network
Regional
Finished
Goods DC
National
Finished
Goods DC

Local DC
Cross-Dock

Store 1
Customer 1
DC

Local DC
Cross-Dock
Customer 2
DC

Regional
Finished
Goods DC

Local DC
Cross-Dock

Store 1
Store 2
Store 2
Store 3
Store 3

2007 Pearson Education

5-16

Gravity Methods for Location

Ton Mile-Center Solution


x,y: Warehouse Coordinates
xn, yn : Coordinates of delivery
location n

dn : Distance to delivery
location n

Fn : Annual tonnage to delivery


location n

( x x n) ( y y n)
D
nx F

d
x
D
nF

d
D
ny F

d
y
D
nF

n 1

n 1

n 1

Min

d n Dn F n

2007 Pearson Education

n 1

5-17

Network Optimization Models


Allocating demand to production facilities
Locating facilities and allocating capacity

Key Costs:
Fixed facility cost
Transportation cost
Production cost
Inventory cost
Coordination cost
Which plants to establish? How to configure the network?
2007 Pearson Education

5-18

Demand Allocation Model


Which market is served
by which plant?
Which supply sources
are used by a plant?
xij = Quantity shipped from
plant site i to customer j

Min cij xij


i 1 j 1

s.t.
n

x D
ij

, j 1,..., m

x K

, i 1,..., n

i 1
m

j 1

2007 Pearson Education

ij

ij

5-19

Plant Location with Multiple Sourcing

yi = 1 if plant is located
at site i, 0 otherwise
xij = Quantity shipped
from plant site i to
customer j

Min
i 1

f y c x
i

i 1 j 1

ij

ij

s.t.
n

x D , j 1,..., m
i 1

ij

x K y , i 1,..., n
j 1

ij

y k ; y {0,1}
i 1

2007 Pearson Education

5-20

Plant Location with Single Sourcing

yi = 1 if plant is located
at site i, 0 otherwise
xij = 1 if market j is
supplied by factory i, 0
otherwise

Min
i 1

f y D j c x
i

i 1 j 1

ij

ij

s.t.
n

x
i 1

ij

1, j 1,..., m

D j x K y , i 1,..., n
ij

j 1

xij , y {0,1}
i

2007 Pearson Education

5-21

Summary of Learning Objectives

What is the role of network design decisions in


the supply chain?
What are the factors influencing supply chain
network design decisions?
Describe a strategic framework for facility
location.
How are the following optimization methods used
for facility location and capacity allocation
decisions?
Gravity methods for location
Network optimization models

2007 Pearson Education

5-22