Creating Efficient Distribution Strategies “10 Principles besides your normal ones” Kent Lumsden Division of Logistics and transportation Chalmers University of Technology

S-412 96 Göteborg Sweden [email protected]

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Creating Efficient Distribution Strategies “10 Principles besides your normal ones” Kent Lumsden Division of Logistics and transportation Chalmers University of Technology

S-412 96 Göteborg Sweden [email protected]

”First mile problem”

2

”Last mile problem”

2

3

”Princip 1” - Tillväxt

(EU, 2005)

1945

2030

2050

3

4

”Princip 2” - Förändringar Structural Changes Industry Share of Total Value Added GERMANY

JAPAN

SWEDEN

UNITED STATES

UNITED KINGDOM

45

40

30

25

20

Källa, IVA 2005

02 20

00 20

98 19

96 19

94 19

92 19

90 19

88 19

86 19

84 19

82 19

80 19

78 19

76 19

74 19

72

4 19

70

15

19

%

35

5

Inventory, Automotive industry

Industrial flow

(Hellveg, 2004)

5

6

”Princip 3” - Sändningar

(xxxx, 2011)

6

7

Fyllnadsgrad - Fjärrtrafik

7

8

Part loads 1 ton < X < 5 ton n, m ≤ 5

Consignment cargo 100 kg < X < 1 ton n, m > 5

A1

An

A1

An

A1

An

T

M1

T

T

alt.

T

T

i

n

An

Ai alt.

T

Mm

A1

Ai

T

T

T

An

Ai

T

Mm

A1

Ai

T

T

X < 1 kg n, m > A … . A … ...A 1000

T

Region II

An

Documents (Mailable goods)

1

Ai

Region I

Parcel 1 kg < X < 100 kg n, m > 50

T

Full loads >5 ton n=m= 1

Mj M1

Mm Mj

M1

Mm Mj

M1

Mm Mj

M1

Mm Mj M1… .. Mj…

Mn

Symbols (Explanation) Full container

Partly loaded container

Loaded Pallet

Package

Document

8

9

”Princip 4” - Godsflöden+ FLOW COMPANY A

COMPANY B

COMPANY C

CAPITAL INFORMATION (Horizontal)

MATERIAL (Customized) RETURNING MATERIAL (Bulked)

RESOURCES

= Reconditioned

= Flow of waste

9

Kund

Kund

CL

Kund

Kund

DL

CL

DL

Centrallager(CL) kontra decentraliserat lager (DL)

10

Value Opportunity Delivery Time - DT

Shorter distances or Faster transport

Value Opportunity Time - VOT

Longer distances

Increased PVT

Consumer

Producer Time

11

You need stocks!

Business Models and Return Percentages Industry Magazine Publishing Book Publishers Greeting Cards Catalog Retailers CD-ROMs Book Distributors Computer Manufacturers Electronic Distributors Mass Merchandisers Printers Auto Industry (Parts) Consumer Electronics Mail Order Computer Manufacturers Household Chemicals

Percentage %

Contribution Service Level Margin

50 20-30 20-30 18-35 18-25 10-20 10-20 10-12 4-15 4-8 4-6 4-5 2-5 2-3

Source: Rogers & Tibben-Lembke, Going Backwards: Reverse Logistics Trends and Practices, 1998, p. 7. 12

13

Material or Passenger

(COMPANY)

MICRO

”Princip 5” -Funktionsleveranser

TRANSPORT

Resources

(SOCIETY)

MACRO

TRAFFIC

Infrastructure

(Source in portion Wandel et al, 1989)

13

14

FREIGHT

COMPLEXITY

MARKET $

Money

Levels of OUTSOURCING $

$

Brand

$ $ $

$

$

Design

FUNCTION P

P

P P

Articles

P P

P

Production

Product

Subassembly Supply Chain

ACCESSIBILITY

Consignments

Warehouse Transport (3PL) TRANSPORT

Carrier Vehicles

Slot

Functional outsourcing

ACTOR

TRAFFIC

Infrastructure

14

15

No of employees 900 000

800 000

700 000

600 000

500 000

Industrial Services Other services Manufacturing Other industries

400 000

300 000 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Källa, IVA 2005

15

16

”Princip 6” - DC/SC = Company in focus

Customer (Front tiers)

Supplier (Back tiers)

End customer (User) 1st tier

3rd tier 4th tier

Distributors

2nd tier

Supply Chain - SC

Demand Chain - DC

16

17

Consequences on delivery set-ups = Company in focus

Customer (Front tiers)

Supplier (Back tiers)

Supplier order Power Plans

End customer Customer demand Service Adaptation Distributors

“DDP or DDU” -Supplier responsibility Supply Chain - SC

“What ever” -Customer adaptation Demand Chain - DC

17

18

Function Delivery + Supplier reduction = Company in focus

Customer (Front tiers)

Supplier (Back tiers)

End customer (User) 1st tier Distributors

2nd tier Supply Chain - SC

Demand Chain - DC

18

19

”Princip 7” - Värdeaddering Function Supplier

Function

End customer (User) Time

Supply Chain - SC

Demand Chain - DC

Function contracting

19

20

Product- vs Servicecost 100

Procent

80

60 92

89

88

88

Service Product

40

20

0

8

11

12

12

Aircraft

Truck

Machinery

Transport equipment (Accenture, 2005)

20

21

”Princip 8” - Noder - Terminaler There is a difference between Perceived service

Customer

Delivered service

Agent or LSP or …

Production of service

LSP

Production of articles

Manufacturer

Level of service

21

22

From Lead-time to Capacity Variation Asymptotic Factory

Capacity

Customer Lead-time

Fixed Capacity (FC)

Capacity

Customer Lead-time

Variation in Capacity (VC)

Delivered Lead-time

Time

CLT = DLT

Time

CLT = DLT

22

23

”Princip 9” - Variantbetydelse % ”80/20 regeln”

The Long Tail

80

50 •Large article number •Indirect article number (”linked”) •Connected business •E-business •Virtual inventory •Software •“Print on demand” •Make to order

”50/20-regeln”

20

50

%

50

50

The Long Tail 23

24

”Princip 10” - Standards Sizes and equipment

24

25

Information and Flexibility ”Adding information is a way to reduce the number of alternatives – is reducing the flexibility”

(Lofti, 2005)

25

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Frågor och tillrättalägganden!

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