Lecture supply chain management chapter 5 deliveringdistribution

Trang 2 Learning objectives §Gain the physical distribution aspect ofsupply chains§Apply the principles of physical distributioninto practice§Calculate distribution costs1.. 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

Reverse logistics

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

2 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.

WAREHOUSES AND DISTRIBUTION CENTRE

DISTINGUISH WAREHOUSE AND DC

Traditional

Warehouses

Distribution Centre

Focus on storage Focus on services and speed of

good movement through SC

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

The path of a customer’s order

Example

Total cost of Distribution

and cost

3 Delivery Scheduling

§ Direct deliveries

§ Milk - run deliveries

Direct Delivery

§ Single voyage

§ A à B: choosing the shortage route

§ Shipment: usually only 1 shipment

§ Big volume and thinly delivery frequency

§ Advantages: simple in operation and

moderation

§ Disadvantages: do not consolidate cargo in

different routes à wastes

Direct Delivery Application

§ Big volume cargo, take the advantage of

capacity’s mean of transport

§ Delivery positions is far away from each

other

§ Delivered to agents in each area of

company

Milk – run delivery from 1 point to many points

§ 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

Assume that the customer locations and order sizes

are as shown above Capacity is 200

Vehicle Scheduling Problem

5

Location of Warehouse and Customers

Vehicle Scheduling Problem

The customer locations shown on the previous

slide are plotted above

• Following are the steps of the Savings Matrix

Method:

1 Identify distance matrix

2 Identify savings Matrix

3 Rank savings

4 Assign customers to vehicles

5 Sequence customers within routes

Savings Matrix Method

-=

) , (

) , (

2 1

2 2

Dist

: Example

Location of Warehouse and Customers

Customer Order Size

Location

Sequence Customers

First, consider the problem of

sequencing customers 1, 3 and

4 who are assigned to the

same vehicle The relevant

distances are copied from the

distance matrix and shown

below

4 Members in Distribution channel

Flows in the Physical Distribution

System

(2) (1)

(3) (4) (5) (6) (7) (8) (9) (10)

5 Distribution channels system

A

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