Logistics & Distribution Management

in
Supply Chain

Jamil Chowdhury, BBA, MBA, CSCM

Operations Planning Manager- Leaf
PGDSCM British American Tobacco Bangladesh
Jamil.u.a.chowdhury@gmail.com
 Superior Education is not
learning of many facts but the
Training of the Mind to THINK.
Discussion Flow

Customer Customer
Supply
SupplyChain Logistics Towards Zero
Initiatives
Market & Demand Service Service
KPI –
– The Big Inventory
Chain Operation
Overview Distributors
Picture Model (TZIM)
Group (CSOG) (GT)
 Discussion Flow

Customer Customer
Supply
SupplyChain Logistics Towards Zero
Initiatives
Market & Demand Service Service
KPI –
– The Big Inventory
Chain Operation
Overview Distributors
Picture Model (TZIM)
Group (CSOG) (GT)
 Market & Demand
Sulawesi % of CAGR (%)
Kalimantan % of CAGR Total
Total (%) 2010
2010
•Populatio 7% 1.25%
•Populatio 6% 1.79%
n
n 4% 14%
8% 11%
•GRDP
•GRDP
(current
(current
Rp) 11.9 13.0%
Rp) 28.9 8.9%
•GRDP/Ca
•GRDP/Ca
p (Rp mn)
p (Rp mn)

East Indo % of CAGR (%)

Total
2010
•Populatio 2% 1.62%
% of CAGR (%) n
Sumatra 2% 19%
Total •GRDP
2010
(current
•Populatio 21% 1.46% Rp) 22.2 17.3%
n
23% 14% •GRDP/Ca
•GRDP p (Rp mn)
(current
Rp) 22.0 12.8%
Java 2010 % of CAGR (%) Bali & NT % of CAGR (%)
•GRDP/Ca Total Total
2010
p (Rp mn)
•Populatio 59% 1.32% •Populatio 5% 1.50%
n n
60% 14% 3% 15%
•GRDP •GRDP
(current (current Note: GRDP in Current Rp (including inflation
Rp) 20.9 12.6% Rp) 11.8 13.3%
7%)
•GRDP/Ca •GRDP/Ca Source: LPEM University of Indonesia
p (Rp mn) p (Rp mn)
 Market & Demand priority ranking
Demand Potential Ranking among regions 2004 – 2014
based on growth, income per capita, population & distribution of income (1)
Expenditur
GDP per e per Distribution of
Region Population capita capita income Ranking

• Jakarta 1

• Riau 2

• North Sumatra 3

• Nanggroe-Aceh D 4

• West Sumatra 5

• East Kalimantan 6

• West Java 7

• East Java 8

• Central Kalimantan 9

= Good = Not Good Source: LPEM University of Indonesi

Discussion Flow

Customer Customer
Supply
SupplyChain Logistics Towards Zero
Initiatives
Market & Demand Service Service
KPI –
– The Big Inventory
Chain Operation
Overview Distributors
Picture Model (TZIM)
Group (CSOG) (GT)
Supply Chain

SUPPLY Reconcile? DEMAND

(Internal company) (external company)

$$$$$

Supplier

PRODUCTION LOGISTICS COSTUMER

Information Flow
Product Flow
 SUPPLY VS DEMAND : RECONCILE?
Who is right ? They both are

“If Sales gave me “I don’t know what

an accurate forecast, my customers will
we would provide want in 3 months”
excellent service”

“We can only be “If manufacturing

so flexible at were more flexible, we’ll
reasonable cost able to meet customer
requirements

Manufacturing Sales &

& distribution Marketing
Supply Chain
Demand
Planning
Marketing SUPPLY Reconcile? DEMAND
(Internal company) (external company)

MPS

Supplier

PRODUCTION LOGISTICS
COSTUMER

Information Flow
Product Flow
 DEMAND PLANNING / FORECASTING

Business Decision Model

Baseline
Strategic Plan Forecast

Annual Plan
Event Forecast Forecast

Business Management
Forecast New
Product

Demand drivers
Supply
35
Demand Plan Demand Series Baseline
Demonstrated capability Event
30

Demand Supply Planning 25

Innovation

Volume
20 Event

Demand - Supply Reconciliation Innovation

15

10
Cash-up (Turnover & Costs)
5
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
Sell Source / Make
Accurate forecast means higher turnover & lower cost History Future

Demand Tracking Supply Tracking

Discussion Flow

Customer Customer
Supply
SupplyChain Logistics Towards Zero
Initiatives
Market & Demand Service Service
KPI –
– The Big Inventory
Chain Operation
Overview Distributors
Picture Model (TZIM)
Group (CSOG) (GT)
Logistics Overview

Supplier

PRODUCTION LOGISTICS
COSTUMER

Information Flow
Product Flow
 Typical Distribution Network
Area Demand
COSTUMER 1 Area Demand
COSTUMER 3

COSTUMER 2

Distribution
Centre 1 Distribution COSTUMER 4
Centre 2
Area Supply

Central Distribution
Centre
COSTUMER 5

Distribution
Centre 3
Manufacturing Site
(A)

National Demand
COSTUMER 6

Manufacturing Site National Supply

(B)
Inbounds to Depot/Distribution Centre
 Distribution Requirement Planning
 Distribution Network Management
 How much stock to keep at every stock point
Distribution
 Inventory level  working capital
Centre 2
 How much stock to replenish
 DRP calculation
 Warehouse Management
 Stock Priority Management Central Distribution
 Warehouse Management Centre
 Capacity planning
 Stock keeping methods
 Racking configuration
 Warehouse layout
 Throughput
 Docking capacity  unloading capacity
 Dispatch capacity  loading capacity
 Stock Flow Management Back Of
FIFO


 FEFO
Factory
 Shipment / Delivery Execution
 Transportation Management
 Transport Provider
Manufacturing Site
 Shipment / Delivery Execution (B)
 Distribution Cost Saving
 Contigency Route Management
Distribution Requirement Planning (push method)

Example: Forecast = 500

Safety Stock = 5000
Projected On Hand = 3000
Stock Transfer Order = 2500
STO = Forecast + SS – Proj OH

CDC DC
W0 W1 W2 W3
LT = 21 days
Out bounds- Customers drop points
 Customer Service
 Customer Order
 Purchase Order
 Replenishment Order
 Replenishment Model
 Inventory Level
 Order Fulfillment
 Shipment / Delivery Execution
 Billing Process
 Proof Of Delivery COSTUMER 2
 KPI  Service Quality?
 On Shelf Availability
 Casefill On Time
 Joint Initiatives
 Service Improvements
 Efficiency Improvements
 Warehouse Management Distribution
Centre 1
 Shipment / Delivery Execution Service Quality:
 Transportation Management • How much?
 Transport Provider •Is it On time?
•In Good Shape?
 Shipment / Delivery Execution
•Easy to Unload?
 Distribution Cost Savings
 Contigency Route Management
Purchase Order & Delivery
Order Send
Expeditio
Validatio Expedition
Synchronization ERP n Report
n Report
Data
PO interface:
• SKU/Desc
Electronic •-Barcode
• Price
•Total PO
• Completeness Order Processor
PO
Manual
Order Entry
PO Checking:
• SKU/Description
• Barcode
• Price WHS
Principal • Qty
• Total PO
Allocation
Load Planning

Delivery Monitoring / Daily Monitoring :

Send PO • Est. Arrived
• Delivery Qty
• Fulfilment
•Total PO

Assembling &
DELIVER Loading Picking
Customer Y
/
Store
REPLENISHMENT ORDER

Replenishment Order = Stock Norm – Stock On Hand – Stock IT

*Inventory model manages STOCK NORM level

REPLENISHMENT ORDER & DELIVERY
Information Flow
Intransit Data ERP System Product Flow

Custome
Order Product

In-transit Stock
Sourcing Whs
Order
Sch. Date & Req. Date
FACTORY ULI WHS Etc.
MARKET
Supply
• Generate Order
• Parameter Setup
• Database
Shipment PRINCIPAL

Daily Sales & Stock

KPI: Service Quality

CUSTOMER
Discussion Flow

Customer Customer
Supply
SupplyChain Logistics Towards Zero
Initiatives
Market & Demand Service Service
KPI –
– The Big Inventory
Chain Operation
Overview Distributors
Picture Model (TZIM)
Group (CSOG) (GT)
Key Performance Indicators
The ability to deliver goods as customer ordered = SERVICE

Arrival:
Delivery: •Is it On Time?
•Lead Time as Planned? •Qty as ordered?
•Broken Product? •In Good Shape?
•Theft? •Easy to unload?
•Return?
Distribution
Centre
Delivery

COSTUMER

Delivery:
•Stock available as ordered? Major KPIs:
•Dispatched On Time?
•Problem while stock picking? 1. Service Quality
•Transportation available? 2. Cost
•Any order revision?
Measurements

 CCFOT(%) provides the Loss tree framework for capturing Service,

Efficiency and On-time Losses together
 Internal Company reporting is consistent – CCFOT
 Reducing CCFOT loss areas would drive improvement of Customer
Service KPIs

Qty Delivered On Time

CCFOT =
Customer Order

Example Of CCFOT Loss:

4.30% 0.30% 0.30%

17.40% Stock Availability

Warehousing & Transport
46.10% Not Assigned
Customer Related
Commercial Issues
31.70%
Order Management

*Figures are not actual data

Discussion Flow

Customer Customer
Supply
SupplyChain Logistics Towards Zero
Initiatives
Market & Demand Service Service
KPI –
– The Big Inventory
Chain Operation
Overview Distributors
Picture Model (TZIM)
Group (CSOG) (GT)
Initiatives

Logistics is about
Cooperation
(Us…NOT you & i)
Initiatives
 Service Improvement
 Electronic Data Interchange
 Advance Shipment Notification
 Integrated Promotion Activity Planning
 VMI
 On Shelf Availability
 Efficiency
 Night Delivery – Holiday Delivery
 Palletized Delivery
 Distribution Bypass
 Backhauling
 Retailer Centralized Delivery
 Logistic Discount Agreement