Trang 2 Learning objectives §Gain the physical distribution aspect ofsupply chains§Apply the principles of physical distributioninto practice§Calculate distribution costs1.. Introduction
1/14/20 Chapter 5: DELIVERY/DISTRIBUTION MsC Bui Thi Bich Lien LOGO Contents §Introduction §Physical distribution activities §Delivery Scheduling §Members in distribution channel §Distribution channels system 1/14/20 Learning objectives § Gain the physical distribution aspect of supply chains § Apply the principles of physical distribution into practice § Calculate distribution costs Introduction § Physical supply vs Physical distribution § Physical supply: is the movement and storage of goods from suppliers to manufacturing § Physical distribution: Physical distribution, on the other hand, is the movement and storage of finished goods from the end of production to the customer 1/14/20 1/14/20 Reverse logistics 1/14/20 1/14/20 CLASSIFY DELIVERY METHOD According to the nature of delivery relations According to locations of delivery Delivery to customer’s location Delivery to the “Hub” of network Physical distribution activities § WHAT: § Physical distribution is responsible for delivering to the customer what is wanted on time and at minimum cost § HOW: § The objective of distribution management is to design and operate a distribution system that attains the required level of customer service and does so at least cost To reach this objective, all activities involved in the movement and storage of goods must be organized into an integrated system 1/14/20 WAREHOUSES AND DISTRIBUTION CENTRE DISTINGUISH WAREHOUSE AND DC Traditional Warehouses Focus on storage Distribution Centre Focus on services and speed of good movement through SC 1/14/20 Order management § Order management is the process of passing order information from customers back through the supply chain from retailers to distributors to service providers and producers § This process also includes passing information about order delivery dates, product substitutions, and back orders forward through the supply chain to customers § This process has long relied on the use of the telephone and paper documents such as purchase orders, sales orders, change orders, pick tickets, packing lists, and invoices 1/14/20 1/14/20 The path of a customer’s order Example 10 1/14/20 Milk – run delivery from point to many points 16 1/14/20 Milk-run Delivery § Methods used: • Saving matrix • Methods of general assignment Vehicle Scheduling Problem § The objectives of the vehicle scheduling problem can be many § Following are some examples: § Minimize number of vehicles required § Minimize total distance traveled § Minimize total travel time § Minimize cost § We shall consider the problem with the objective of minimizing total distance 34 17 1/14/20 Vehicle Scheduling Problem X Coordinate Y Coordinate Order Size W 0 12 48 60 15 43 12 92 15 80 Assume that the customer locations and order sizes are as shown above Capacity is 200 35 Vehicle Scheduling Problem W Location of Warehouse and Customers The customer locations shown on the previous slide are plotted above 36 18 1/14/20 Savings Matrix Method • Following are the steps of the Savings Matrix Method: Identify distance matrix Identify savings Matrix Rank savings Assign customers to vehicles Sequence customers within routes 37 Identify Distance Matrix Warehouse Customer Customer Customer Customer Customer Distance Matrix W Cust Cust Cust Cust Cust 12.0 7.8 16.6 15.0 15.3 9.2 7.6 9.0 17.5 10.0 7.6 9.2 3.6 14.4 10.8 Dist ( A, B ) = Example : Dist (1,2) = (x A - xB ) + ( y A - y B ) 2 38 19 1/14/20 Rank Savings Savings Matrix Cust Cust Cust Cust Cust Customer 10.6 20.9 18.0 9.8 Customer 14.3 15.2 13.9 Customer 27.9 17.4 Customer 19.5 Customer Rank (3,4) (2,4) (1,3) (2,3) (4,5) (2,5) (1,4) (1,2) (3,5) (1,5) 39 Assign Customers to Vehicles Customer 2 Order Size 48 60 43 92 80 W Location of Warehouse and Customers Rank (3,4) (2,4) (1,3) (2,3) (4,5) (2,5) (1,4) (1,2) (3,5) (1,5) 40 20