Supply Chain Design and Analysis Course Outline PDF

LECTURER’S INFO DR. LÊ PHƯỚC LUÔNG INTRODUCTION TO THE COURSE SUPPLY CHAIN DESIGN AND ANALYSIS Email: [email protected] Department of Production & Operations Management, School of Industrial Management 106 B10, Monday & Tuesday from 10am -12am EDUCATION BACKGROUND  2007 Bachelor of Arts – Indust...

LECTURER’S INFO DR. LÊ PHƯỚC LUÔNG INTRODUCTION TO THE COURSE SUPPLY CHAIN DESIGN AND ANALYSIS Email: [email protected] Department of Production & Operations Management, School of Industrial Management 106 B10, Monday & Tuesday from 10am -12am EDUCATION BACKGROUND  2007 Bachelor of Arts – Industrial Management (HCMUT)  2012 Master of Business Administration (Umea University, Sweden)  2020 Doctor of Applied Engineering in Supply chain management (Quebec University, Canada) INDUSTRIAL EXPERIENCES INSTRUCTOR: DR. LE PHUOC LUONG COURSE ASSESSMENT Group assignment 1: 20% Learning Outcomes Group assignment 2: 30% 1. Analyze values of supply chain network design Final Exam: 50% - Written exam 2. Develop solutions for facility location, service level improvement, supply chain capacity and transportation 3. Communicate and work supply chain design team effectively in 4. Design quantitative models and use appropriate tools for solving supply chain problems  2007 Sales supervisor at Kimberly – Clark  2014 Process improver at Thien Tu call center  2020 Purchasing & inventory manager at Innocar Canada TEXT BOOKS COURSE OBJECTIVE This course helps students understand important aspects of supply chain design and analytics: selecting the right number, location, and size of warehouse and production facilities. At the same time, students are required to determine the territories of each facility, which product should be made where, and how product should flow through the supply chain. Research Interests: Supply chain management, Lean production, Operations management. Allowed to bring 1 cheat sheet (2-sided handwriting A4 paper) SCHEDULE Week GROUP ASSIGNMENT 1: 20% Lesson By Each group (6-7 students) prepares the report (word file) and presentation (powerpoint file - 1 hour) for one of the below topics. Your group is required to read carefully the book chapter related to the topic. You can use the slides of this course for your presentation, but you have to modify the contents with your innovations in presenting the chapter (for example: a play, or a game, or a case discussion with all students in class, or any other innovative approach). Your report may focus on a case analysis with the relevant theories mentioned in the chapter. You must submit the report and the presentation files in BKEL at least 1 day before the presentation. 02 Introduction & Chapter 1 (session 1) Dr. Le Phuoc Luong 03 Chapter 1 (session 2) Dr. Le Phuoc Luong 04 Chapter 2 Dr. Le Phuoc Luong 05 Chapter 3 Dr. Le Phuoc Luong 08 Chapter 3 exercise Dr. Le Phuoc Luong 09 Chapter 4 Team 1 10 Chapter 5 Team 2 12 Chapter 4, 5 exercise Dr. Le Phuoc Luong 13 Chapter 6 session 1 Dr. Le Phuoc Luong Team 3: Chapter 6 session 2, present in week 14. 14 Chapter 6 session 2 Team 3 Team 4: Chapter 7, present in week 15. 15 Chapter 7 Team 4 16 Chapter 6&7 exercise Dr. Le Phuoc Luong 17 Chapter 8 Team 5 18 Chapter 8 exercise & Revision Dr. Le Phuoc Luong 19 Presentation of Group assignment 2 All teams Team 1: Chapter 4, present in week 9. Team 2: Chapter 5, present in week 10. Team 5: Chapter 8, present in week 17. Note: The chapter numbers in this course differ from the books. You have to see the chapter titles to find the right chapter numbers in the book for your reading. You will get 0 if you are absent on the presentation date. Note: Final exam is scheduled by the university GROUP ASSIGNMENT 2: 30% Each group (6-7 students) prepares a report (word) and presentation (PowerPoint) for: Choosing any supply chain network of any product (or any company) Based on theories of chapters: 2, 3, 4, 5, 6, and 7, your group is required to design a supply chain network for the chosen product or company. For the data collection: For the parameters that you cannot have the real data, you can estimate the data through your group discussions. Giving your managerial implications through the supply chain design. Submit your documents (Word and Powerpoint) on BKEL at least 1 day before the presentation date of week 19. Each team has 15 minutes for the presentation. RULES 1. YOU GET A BONUS OF 0.5 POINTS FOR YOUR GROUP ASSIGNMENTS IF YOU ARE PRESENT FOR ALL CLASSES AND JOIN THE DISCUSSIONS IN CLASS. 2. YOU ARE NOT ALLOWED TO TAKE THE FINAL EXAM IF YOU ARE ABSENT FOR MORE THAN 3 CLASSES (MAXIMUM ALLOWED ABSENCE IS 3 CLASSES) You will get 0 if you are absent on the presentation date. 3. NO MORE THAN 15 MINUTES BEING LATE 4. NO MOBILE PHONE 8 SUPPLY CHAIN DESIGN & ANALYSIS CHAPTER 1 What is supply chain network design? SESSION 1: THE VALUE OF SUPPLY CHAIN NETWORK DESIGN (READ EBOOK 1, CHAPTER 1) SUPPLY CHAIN NETWORK SUPPLY CHAIN NETWORK  The system of suppliers, manufacturers, distributors, and retailers that exists to transform raw materials to final products and supply those products to customers  That portion of supply chain which comes after the manufacturing process is sometimes known as the distribution network. High quality products, satisfactory services, attractive prices 1/10/2024 11 1/10/2024 12 SUPPLY CHAIN NETWORK DESIGN A supply chain consists of the suppliers, plants, warehouses, and flows of products from each product’s origin to the final customer. The number and locations of these facilities is a critical factor in the success of any supply chain. In fact, some experts suggest that 80% of the costs of the supply chain are locked in with the location of the facilities and the determination of optimal flows of product between them. The most successful companies recognize this and place significant emphasis on strategic planning by determining the best facility locations and product flows. The discipline used to determine the optimal location and size of facilities and the flow through the facilities is called supply chain network design or supply chain modeling. THE FOCUS OF SUPPLY CHAIN NETWORK DESIGN EXAMPLES: Firms acquiring or merging with another firm in the same industry to reduce the overall costs to operate both firms: Justify the new combined company by determining that they can deliver the same or more products to the market at an overall lower cost. In such mergers, the savings often come from closing the redundant plant and warehouse locations, opening new plants and warehouses, or deciding to use existing facilities to make or distribute different mixes of products. Supply chain savings from $40 million to $350 million over a period of a couple of years  the pressure placed on the supply chain team to determine the new optimal supply chain structure after an acquisition or merger is announced. THE FOCUS OF SUPPLY CHAIN NETWORK DESIGN How many warehouses should we have, where should they be, how large should they be, what products will they distribute and how will we serve our different types of customers? How many plants or manufacturing sites should we have, where should they be, how large should they be, how many production lines should we have and what products should they make, and which warehouses should they use? Which products should we make internally and which should we source from outside firms? If we source from outside firms, which suppliers should we use? What is the trade-off between the number of facilities and overall costs? THE FOCUS OF SUPPLY CHAIN NETWORK DESIGN QUANTITATIVE DATA FOR SUPPLY CHAIN NETWORK DESIGN What is the trade-off between the number of facilities and the service level? How much does it cost to improve the service level? WHICH DATA SHOULD YOU HAVE TO DESIGN A SUPPLY CHAIN? What is the impact of changes in demand, labor cost, and commodity pricing on the network? When should we make products to have the best management and plan for seasonality in the business? How do we ensure the proper capacity and flexibility within the network? To meet demand growth, do we need to expand our existing plants or build new plants? When do we need to add this capacity? If you have a plant in Vietnam and some of your customers are in New York, you need to physically get the product out of Vietnam, across the ocean, and to New York. If you make wood products (like paper or boards), you can locate plants either close to the raw materials (forest areas) or close to your customers (usually located a significant distance away from the large forest areas). How can we reduce the overall supply chain costs? QUANTITATIVE DATA QUANTITATIVE DATA WHICH DATA SHOULD YOU HAVE TO DESIGN A SUPPLY CHAIN? WHICH DATA SHOULD YOU HAVE TO DESIGN A SUPPLY CHAIN? Transportation cost: cost of moving products from original source to final destination. Production lot size: the number of units of product made during each run. Service level: The rate of customer satisfaction that you expect to achieve. The location and the number of warehouses: distribution center, Cross-dock, plant-attached warehouse, central/hub/consolidation warehouse. Lead time: The time from delivering an order to receiving the products. Customer demand The location and the number of suppliers, and third-party manufacturing sites. QUANTITATIVE DATA SOLVING PROBLEM USING OPTIMIZATION WHICH DATA SHOULD YOU HAVE TO DESIGN A SUPPLY CHAIN? Transportation modes: the types of transportation used for moving products. Inventory: Inventory level, safety stock, inventory model. Number of laborers and materials. Taxes Risks and uncertainties Carbon emissions … SOLVING PROBLEM USING OPTIMIZATION Because of the supply chain complexities and rich set of quantitative data we have discussed  Mathematical optimization is the best way: to sort through the various options, balance the trade-offs, determine the best locations for facilities, and support better decision-making. SOLVING PROBLEM USING OPTIMIZATION To formulate a logical supply chain network model, you need to think about the following four elements: Objective Constraints Decisions Mathematical optimization relies on linear and integer programming. Data SOLVING PROBLEM USING OPTIMIZATION SOLVING PROBLEM USING OPTIMIZATION The objective is the goal of the optimization and the criteria we’ll use to compare different solutions. An optimization problem needs to have quantifiable objectives The constraints define the rules of a legitimate solution.  For example, to minimize cost. If our objective is to minimize cost, we can now compare two solutions and judge which one is better based on the cost. When the mathematical optimization engine is running, it searches for the solution with the lowest cost. For example, there are some logical constraints we must include such as which products may be made, where, how much production capacity is available, how close your warehouses must be to customers, and a variety of other details. Supply chain managers say their objective is to “optimize their supply chain.”  Ask what exactly they want to optimize, or what criteria they will use to determine which of the two solutions is better. For example, is the key criteria transportation cost, is it service, is it facilities costs, or something else? SOLVING PROBLEM USING OPTIMIZATION The decisions (sometimes called decision variables) define what you allow the optimization to choose from. In the optimization of the physical supply chain, the main decisions include how much product moves from one location to another, how many sites are picked, where those sites are, and what product is made in which location. The allowable decisions cannot be separated from the constraints. For example, if you have existing warehouses, you may or may not be able to close some of these sites. In this step, you also want to be careful not to specify so many constraints that you prohibit the optimization from finding new and creative strategies. SOLVING PROBLEM USING OPTIMIZATION Finally, you must consider the data you have available to you. There may be factors you would like to consider in the optimization, but you do not have the data to support them.  In this case, you still need to figure out ways to make a good decision. This could include running multiple scenarios, considering approximate data, or adjusting the data you have. SOLVING PROBLEM USING OPTIMIZATION After you have thought about your problem in terms of the objective, constraints, decisions, and data, there are ways to translate this into a series of equations and then solve the problem using linear and integer programming techniques.  This is also sometimes referred to as mixed integer programming (MIP)—the “mix” refers to a mix of linear and integer variables. THANKS