1 / 50

P an American A lliance for S upply I mprovement: Beverly Kris Jaeger Alejandro MacCawley

Pan American Advanced Studies Institute Simulation and Optimization of Globalized Physical Distribution Systems Santiago, Chile August, 2013. PASI Project: Case #2. P an American A lliance for S upply I mprovement: Beverly Kris Jaeger Alejandro MacCawley Marie-Eve Rancourt

elmo
Télécharger la présentation

P an American A lliance for S upply I mprovement: Beverly Kris Jaeger Alejandro MacCawley

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Pan American Advanced Studies InstituteSimulation and Optimization of Globalized Physical Distribution SystemsSantiago, Chile August, 2013 PASI Project: Case #2 Pan American Alliance for Supply Improvement: Beverly Kris Jaeger Alejandro MacCawley Marie-Eve Rancourt Carlos Solorio-Magana ShanthiMuthuswamy

  2. There’s a challenge to be met … • Agenda • Introduction • Current State • The Mission • Methods • Models & Paths • Calculations & Computations • Solution Options • Implications • Further considerations • PASI Objectives Interpretations & Assumptions

  3. Problem Overview: Case 2  • What do we ‘know’? • Introduction

  4. Problem Overview • 6 Manufacturing Plants • Newark NJ, St Louis MO, Springfield MO Memphis TN, Fort Worth TX , & Mexicali • 5 Current Distribution Centers • Canada: Toronto • USA: Salt Lake, Tulsa OK Allentown PA, Atlantic City, NJ • 2 Candidate DCs • Oakland CA • Los Angeles DC ? • Introduction

  5. Problem Overview • DC Leases Expiring in 18 months: • Toronto • Salt Lake City • Customers • Retailers across US and Canada • US Customers must be serviced by a US-based Distribution Center DC • Introduction

  6. CC CU To O SL AL NW MP LA SL Tu MC AT SP FW Mfg DC ? C • Introduction

  7. Problem Formulation Decisions Objective • Introduction • Active/open DC (yj) • Size of new DC (S) • Outbound flows (xjk) • Inbound flows given (% from each plant) Minimize: • Fixed & variables costs for the active DC(s) • The fixed cost of new DC is a function of S • Transportation costs • Inbound and outbound

  8. What is our mission? • Measurable challenges • Reduce total supply chain costs • Reduce delivery times • Solution(s) • Solution(s) • Introduction

  9. The Challenges, Q1 & Q2 • Q1: ID optimal location in Western NA • Salt Lake City (SL) • Los Angeles (LA) • Oakland (O) • Q2: ID optimal location serving Western CAN • Salt Lake City • Toronto (T) • LA or O • Introduction

  10. Q1 & Q2: Global Approach • Salt Lake City USA (as is currently) CAN • Oakland USA (candidate) CAN • Los Angeles USA (candidate) CAN SL O LA • Introduction

  11. Q1 & Q2: Global Approach • Salt Lake City USA Toronto CAN • Oakland USA Toronto CAN • Los Angeles USA Toronto CAN T SL O T T LA • Introduction

  12. The Challenges, Specific • For location serving Western North America: • Sizing of DC for peak inventory • Impact to inventory, freight, transit time, & DC costs • For locationserving Western CAN: • Sizing of DC to support customer demand • Associated costs for DC • Introduction

  13. Our Approach as a Team • Method

  14. Fundamental Phases • Plant to DC • Within DC • DC to Customer DC DC DC • Method

  15. Fundamental Phases • Plant to DC • Within DC • DC to Customer DC • Method

  16. Plant to DC DC • Method

  17. Plant to DC DC • Shipping distance & rates/mile • Method

  18. Plant to DC DC • Given factors: • Truck can drive 500 miles/day • Average of 40K lbs/shipment • Ship combination of TL & LTL • 100% of freight paid by Plant • Assumptions: • Only ground freight used • Method

  19. Plant to DC: Inbound Trans. • Method & Model

  20. Fundamental Phases • Plant to DC • Within DC • DC to Customer DC DC DC • Method

  21. Fundamental Phases • Plant to DC • Within DC DC to Customer DC • Method

  22. DC to Customer DC • Method

  23. DC to Customer DC • Method

  24. DC to Customer DC • Given factors: • Truck can drive 500 miles/day • Average of 25,000 lbs/shipment • Ship combination of LTL &TL • 100% OB freight paid by Plant • US DC serves US customer • Assumptions • No stop charges • Pallet weight includes tare & product • Method & Model

  25. DC to Customer • Model: • Method & Model

  26. Fundamental Phases • Plant to DC • Within DC • DC to Customer DC DC DC • Method & Model

  27. Fundamental Phases • Plant to DC • Within DC • DC to Customer DC • Method & Model

  28. Existing DC Costs DC Size and costs for the two new candidates, LA and Oakland??? • Method

  29. DC “Costs” DC • Given factors: • Average 11 sqft/pallet stored • Averages 1,500 lbs of product per pallet in DC inventory • Average 9 turns/yearfor the network ~40 daysof Supply • Peak Inventory levels up to 12% over the average level • Toronto is 100% utilized now • Candidate DC space costs for LA & Oakland are given • { $6.25 per square foot for fixed • { $0.095 per lb for variable cost • Method & Model

  30. Size for the new DC inventory DC

  31. Modeling warehouse capacity

  32. Warehouse capacity (fast movers) Convert in squared feet: Sf = 11/1,500 qf

  33. Warehouse capacity (s l o w m o v e r s) Convert in squared feet: Ss = 11/1,500 qs

  34. DC Design & Justification • Unknowns, affecting stacking height: • Height of packed goods • Fragility of packed goods  Stack a max of 3 high with block stacking • Unknowns, affecting configuration • Perishable items • ABC Control Breakdown • Slow vs. fast mover profile Block stacking for fast, Pallet rack for slow • Method & Model

  35. DC Facility Sizing Convention • 40% Bulk/Reserve + Fast Pick • Fast movers – block stacking; Slow movers – pallet racks • 60% Other storage support • Clearance, Aisles, Shipping/Receiving,Pallet & Vehicle Stow Slow movers Fast movers 3 3 • Method & Model S* = 246,000

  36. Toronto Extra Capacity Calculation • Toronto is currently at full capacity • Extra DC size calculated in sqft: 44,554 • DC fixed and variable costs calculated using only the extra space added to serve West CAN • Method  Options

  37. Salt Lake City New Option • Current DC size at SLC in sqft: 500,000 • New DC size calculated in sqft: 246,000 • Lease expires in 18 months • SLC new option: Rent only ½ the current space • Advantages • No new hiring, training • No new scoping required • CODB known, unchanged • Laws and regulations known • Method  Options

  38. Outcomes: Total Landed Costs • Method & Model • Outcomes

  39. Outcomes: Total Landed Costs • Outcomes

  40. Outcomes: Total Landed Costs by number of DCs • Outcomes

  41. Outcomes for Service Time Computed Demand: 84% from US customers, 16% from Canadian customers • Outcomes

  42. Outcomes for ROI • Outcomes

  43. Summary • Computed Landed Costs • Computed Service Times • Two Options: • LA  US, Toronto  Canada • SLC New  US, Toronto  Canada • “Solutions”

  44. CC CU To O SL AL NW MP LA SL Tu MC AT SP FW Mfg DC ? C • Introduction

  45. CC CU To O SL SL AL NW MP LA SL Tu MC AT SP FW Mfg DC ? C • Introduction

  46. Considerations & Recommendations • Product life cycles and turnover • Safety stock and demand variability • Load consolidation opportunities • Other transportation alternatives • Opportunities for DCs in other locations • Investigation into additional landed cost factors • External factors: workforce, unions, government, political unrest, regulations, CODB …

  47. Considerations & Recommendations • Size and orientation of racks and shelving • Storage configuration profile: Selective racks, push-backs, drive-through, block stacks, combo • Number and width and orientation of aisles • Clearance height available within the building • Fast-pick areas, Storage and retrieval systems • Special support areas, regional consideration

  48. PASI & Project Objectives • Apply concepts practically • Real-world problem • With interpretations assumptions & considerations • Collaborate across: • Cultures & Universities • Backgrounds & Perspectives • Experience & Enjoy!

  49. PASI & Project Objectives • Apply concepts practically • Real-world problem • With interpretations assumptions & considerations • Collaborate across: • Cultures & Universities • Backgrounds & Perspectives • + Experience & Enjoy! Thank You Alice, Jorge & PASI!!

  50. PASI Case 2 Data by PASIs

More Related