Logistics network opportunities

The opportunities for reducing costs and improving throughput efficiency by a reappraisal of the global logistics network, and in particular manufacturing and inventory locations, can be substantial. By their very nature, decisions on location in a global network can only be taken centrally. 

Figure 2 Supply Chain Network Structure. (From D. M. Lambert, M. C. Cooper, and J. D. Pagh, Supply Chain Management Implementation Issues and Research Opportunities, IntemationalJour-nal of Logistics Management, Vol. 9, No. 2, 1998, pp. 1-19. Reprinted with permission)...

As a third category production-related performance measures reflect the monetary cashflow resulting from production operations. This includes costs for raw and auxiliary material consumption, labour costs of operators, opportunity costs for tied capital, and revenues due to sales of final and intermediate chemicals. A configuration of the network s logistical system affects the production system by providing prerequisites for normal production operations. I.e. a configuration assures that raw materials are available and that final and intermediate chemicals can be stored and delivered to customers. In this simulation study, these effects result in the availability or storability of intermediate chemicals. If material is unavailable or not storable (e.g. due to fully utilized. stock capacities), a disturbance of the production processes results such that plants have to reduce their production outcome or shut down. An appropriate measure to account for production disturbances is to measure the gap between planned and realized production for all plants associated to the considered... 

You will discover new opportunities to increase your returns, to be part of a performance network - a supply chain - as a partner valued for schedule effectiveness and to offer your customers excellent logistics services. A new world of methods will open up to you how you plan, schedule, and control your customer orders as well as your material flow, engineering, production, suppliers and key competence partners. 

In Level 4, the network view causes those in logistics to consider who is the best constituent for providing transportation for the pieces that go into the final product. The best constituent provider means a part of the transportation function could be outsourced to let a supplier deliver and pick up finished product. Now a global view of warehousing, transportation, and delivery comes into play, as the nucleus firm drives an effort to seek lowest-landed cost with the right products being at the point of need. With inbound and outbound freight on either side of each constituent, the question becomes how to make the best use of all available equipment and resources. Tmck utilization on a nationwide basis, for example, is estimated to be no better than 60 to 70%, because of all the less-than-full outbound loads and empty backhauls. That becomes an opportunity to better utilize assets. 

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