Key Distribution Tradeoffs PDF
Document Details
Uploaded by InvincibleAllegory
Saskatchewan Polytechnic
Tags
Summary
This presentation discusses key tradeoffs in distribution, including balancing costs and customer service. It analyzes factors like transportation, warehousing, inventory, and facility resources to optimize performance. The presentation also highlights challenges like seasonal demand fluctuations and increasing customer requirements, suggesting solutions for effective distribution strategies.
Full Transcript
Key Distribution Tradeoffs Functional Tradeoffs How to best balance customer service and costs. Transportation COSTS Warehouse Customer Service Inventory No: of Warehouses Vs Costs Warehouse vs. Transportation...
Key Distribution Tradeoffs Functional Tradeoffs How to best balance customer service and costs. Transportation COSTS Warehouse Customer Service Inventory No: of Warehouses Vs Costs Warehouse vs. Transportation Warehouse vs. Inventory Logistics Cost Logistics Cost Inventory Warehousing cost cost Warehousing Transport cost cost Number of Warehouses Number of Warehouses Logistics Cost Warehouse vs. Customer Service Warehousing cost Cost of lost sales Number of Warehouses Source: Figure 10.3 2 Facility-Level Tradeoffs How to best balance financial resources and performance. Space Equipment People 3 Space vs. Equipment. The larger the facility and the more space used for distribution operations, the more equipment will be needed in the facility. Equipment vs. People vs. Space People. The (Throughput) Space greater the use of Equipment The larger the facility equipment to workforce, the larger automate materials the facility size and handling and throughput possible. distribution activity, the lower the labor People requirements of a facility. 4 Key Challenges in Distribution Labor Availability Demand Variation Issues Seasonal demand creates challenges in effectively utilizing the space and equipment resources and retaining labor throughout the year. Solution: Balancing the DC requirements of seasonal products with products that have alternate primary selling seasons and/or stable year-round demand products. 5 Increasing Customer Requirements Growth in additional capabilities and services. Lean strategies creating expectation of smaller, more frequent, and faster fulfillment of orders. Solution: Flexible fulfillment processes 6 Labor Availability Issues Nature of DC operations work creates ongoing turnover challenge Smaller labor pool due to aging demographic trend in Europe and the United States. Solution: DC automation 7
