quiz #3

network design big themes

• build the network with the consumer-in-mind and how to win market share

  • develop the right network E2E/cross-functionally based on lead time, availability/volumes, TCO, sustainability, etc.

network design watch-out

hardest design element = triggers to re-eval decisions

• AI and machine learning will likely have the #1 impact on SC resiliency in the future

macro factors influencing network design

• intellectual property theft (IP)

• reputation risk: human rights and sustainability

• economic growth opportunities

• political risk

• raising tariffs and costs

• other corporation commitments (credibility)

drives where to have factories or warehouses, how many, type of capabilities (auto/manual)

• nature of product

• business requirements

• external influences (+add macro factors)

• SC capabilities (factories, FC/DC)

nature of product

• high/low unit $

• impact of RM proximity

• regulations/laws (if int’l)

business requirements

• service levels/lead times

• customer order size (TL, LTL) & where shipping to

• portfolio — temp, weight, size

• packaging design/size

external factors

• carrier and labor availability

• customer network constraints

• competitor/cust. capabilities

• sustainability/CO2 footprint

supply chain capabilities (factory, FC/DC)

• location/proximity

• flexibility (order size or packaging)

• labor availability

• capacity (as-is and optionality)

• cross-business or regional synergies

decision criteria for flow of finished goods

• # of touches/moves

• replenishment lead time from production to consumer

• labor/space impacts

• packaging waste due to dunnage/repackaging

• new product design lead time

• network complexity risks to manage inventory/hand-offs

• additional capex/investment costs to enable new packs

VUCA

volatile, uncertain, complex, and ambiguous

make production themes

• identify capacity options internally and externally; how it fits w/ business needs

• balance need for flexibility vs scale at times aligned and others at odds

• how work gets done —> include ‘hard’ (TCO) and ‘soft’ benefits (sustainability and flexibility)

make design clusters

• influence product design (E2E)

• operational design

• make vs buy/location design

• other

influencing product design

• idea-2-launch

• innovation/renovation

product design process

1. business building the right portfolio

2. identify what product/svc the consumer wants (online, offline, omni)

3. refine the product options with MFG feedback

4. develop workplan to execute

5. deliver product and service (action plan KPIs)

operation design

• factory & process layout

• methods (manual, auto)

operation process strategies

• make-to-stock (continuous flow)

• assemble to order (intermittent batch

• make to order (discrete batch)

• engineering to order - ‘job shop’ (project)

make vs buy/location design

global, regional, and local

internal vs external

methods (manual, auto)

make vs buy process layout

where to make —> how to make (factory, 3PL) —> method to make (manual ops., hybrid, auto)

other

• HR/ppl: skills and legal

• IT: ERP and info flow needs

• procurement: raw/pack/SFG

D2C/DTC

direct 2 consumer

SFG

semi-finished goods

critical fulfillment considerations

• location impacts

• functionality design options

• other

critical fulfillment consideration: location

lead time, responsiveness, $$

critical fulfillment consideration: functionality design options

• consolidating inventory from production

• adds value… create new packs/repack

• capacity and throughput

• complexity

• auto vs manual

critical fulfillment consideration: other

• HR/Ppl: skills, # FTEs

• IT: ERP (WMS), pick/pack/ship software

manufacturer ships thru customer network

customer fulfillment and selling through marketplace

manufacturer does the direct ship or fulfill

direct fulfillment (dropship) and direct to consumer (D2C)

key steps to design and maintain to meet business needs

1. consider channel (customer type, consumer) differences for fulfillment

2. leverage scale that already exists (internally/externally)

3. identify the right fulfillment solution/approach

4. design your E2E fulfillment service (internal/external)

5. consider if or where automation is needed or adds value

6. determine where and how to operate your fulfillment network (whs + carriers)

7. build your fulfillment budget and investment plans linked to KPIs

8. review and optimize E2E value chain