Logistics excellence: creating a harmonious performance
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Logistics excellence involves harmonizing supply chain partners akin to a conductor leading an orchestra, achieved through short lead-times, low variation, and minimal waste. The process includes mapping the current supply chain, designing a future state, and implementing improvements through strategic alignment and effective management. The four key steps to achieve logistics excellence are current state analysis, future design, organizational fitness improvement, and robust implementation.
Logistics excellence: creating a harmonious performance
- 1. Logistics Excellence: Creating a harmonious performance Dr. Marco Tieman (CEO LBB International & Adjunct Professor Universiti Tun Abdul Razak) Kuala Lumpur, 26 August 2014
- 2. www.lbbinternational.com 2 Agenda Introduction Organising your supply chain How to get started Conclusion
- 4. A harmonious performance ... www.lbbinternational.com
- 5. Logistics Excellence is the art of a conductor in front of the orchestra, recognising the specific qualities of the players in the orchestra (read: supply chain partners) and knowing how to weld these together into a harmonious performance. www.lbbinternational.com
- 6. Using the specific qualities of the various players, the conductor composes and implements best practice solutions to form a balanced symphony. www.lbbinternational.com
- 7. Logistics excellence is reached when the company has (1) short supply chain lead-times, (2) low variation in the supply chain, and (3) low waste in the supply chain. www.lbbinternational.com
- 8. How fit is your supply chain? www.lbbinternational.com
- 9. Organising your supply chain www.lbbinternational.com
- 10. www.lbbinternational.com © 2012 LBB International Supply chain model
- 11. Supply chain strategy Sourcing/Purchasing Strategy www.lbbinternational.com Brand Brand Production & Distribution Value/Commercial Value/Commercial Strategy Strategy Production & Distribution Strategy Strategy Sourcing/Purchasing Strategy
- 12. Supply chain objectives Customer service objectives (order cycle time, inventory availability, order fill rate) Logistics objectives (reduce lead-times, improve deliver reliability & flexibility, and reduce integral supply chain costs) www.lbbinternational.com
- 13. Product characteristics Inventory Transporta-tion & Storage 1 10 100 10,000 1,000 www.lbbinternational.com Handling Value density Packing density 100 Source: Goor et al. (1999)
- 14. Market requirements What 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) & labelling www.lbbinternational.com
- 15. Logistics control = Planning, coordinating and conducting processes and activities within a chain. www.lbbinternational.com
- 16. www.lbbinternational.com Where is my Customer Order Decoupling Point (CODP)? Logistics control
- 17. Logistics control Customisation -> CODP upstream -> need for fast, frequent and order driven delivery Floating stock -> CODP downstream -> pipeline becomes virtual distribution centre www.lbbinternational.com CODP
- 18. Supply chain resources Culture Organisation structure & interdependencies ICT = qualifier! www.lbbinternational.com
- 19. Supply chain business processes www.lbbinternational.com Source: Lambert et al. (1998) 19
- 20. Supply chain network structure www.lbbinternational.com
- 21. Supply chain peformance Efficiency (cost, profit, ROI) Effectiveness (brand, complaints, waste) Flexibility (mix flexibility, volume flexibility) Responsiveness (lead-time) Robust (rejects, availability of assets) www.lbbinternational.com
- 22. Organising your supply chain www.lbbinternational.com STRATEGIC FIT! © 2012 LBB International ALIGNMENT! ALIGNMENT!
- 23. www.lbbinternational.com How to get started
- 24. The FIRST STEP is to map the current supply chain (AS-IS) for the organisation and measure its performance, strategic fit and degree of alignment. www.lbbinternational.com
- 25. The SECOND STEP is to design the future supply chain (TO-BE) for the organisation with its targeted performance. www.lbbinternational.com
- 26. The THIRD STEP is to improve the ‘fitness’ 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 -> coordination www.lbbinternational.com
- 27. The FOURTH STEP is to implement improvement programs, in order to (1) shorten its supply chain lead-times, reduce its variation and waste; (2) establish strategic fit; and (3) ensure alignment with its markets. www.lbbinternational.com
- 29. Logistics excellence is the art of a conductor in front of the orchestra, recognising the specific qualities of the players in the orchestra and knowing how to weld these together into a harmonious performance. Logistics excellence can be achieved by four steps: (1) AS-IS analysis, (2) TO-BE design, (3) improving the fitness of the organisation, and (4) effective implementation. For more information on logistics excellence, please contact us! www.lbbinternational.com
- 30. Thank you LBB International B-5-8 Plaza Mont Kiara Mont Kiara 50480 Kuala Lumpur Malaysia Dr. Marco Tieman Chief Executive Officer marco@lbbinternational.com www.lbbinternational.com www.logisticsexcellence.blogspot.com
Editor's Notes
- #21: Managed process links: the focal company integrates and manages process links with first-tier customers and suppliers, although it may be actively involved in the management of other processes beyond the first tier. Monitored process links: the focal company monitors or audits as frequently as necessary how the process links are integrated and managed between other member companies. Not-managed process links: the focal company fully trusts other supply chain members to manage the process link appropriately or, because of limited resources, leaves it to them. Non-member process links: non-member process tasks are links between members of the focal company’s supply chain and non-members of the supply chain.