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SUPPLY CHAIN MANAGEMENT: 101

SUPPLY CHAIN MANAGEMENT: 101. Optimisation. Damian Milicich GM Ocean Freight 16/04/2013. Introduction. D efinition D ata and Product What is important? batch vs sequence vs prioritisation exercise Housekeeping – casual, interactive, questions, acronyms. Definition: Optimisation.

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SUPPLY CHAIN MANAGEMENT: 101

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  1. SUPPLY CHAIN MANAGEMENT: 101

  2. Optimisation Damian Milicich GM Ocean Freight 16/04/2013

  3. Introduction • Definition • Data and Product • What is important? • batch vs sequence vsprioritisation exercise • Housekeeping – casual, interactive, questions, acronyms

  4. Definition: Optimisation A series of conscious comprises resulting in the overall best solution for the total demand.

  5. The Kotahi Problem! • Forecast accuracy • Supply and demand imbalance • Demand visibility = Surprises • When and where to start • Cost dissatisfaction • Quality dissatisfaction • Frustration • Inconsistent results

  6. The Kotahi Solution “If you define the problem correctly, you almost have the solution” Steve Jobs

  7. Boring stuff • Data – Data – Data • What • When • Where • How Much • Product – allocation etc.

  8. What matters to the customer? What matters to Kotahi? What is hard to solve? What is easy to solve? What is mandatory?

  9. Visibility Exercise: Line up in a row BATCH Exercise: Line up in a row by tallest to shortest Exercise: Line up in a row, tallest to shortest, facing alternative ways Exercise: Line up in a row by tallest to shortest – one by one SEQUENCE Exercise: Line up in a row, tallest to shortest, facing alternative ways – one by one Exercise: Line up in a row, tallest to shortest, facing alternative ways – one by one PRIORITISATION

  10. Start Point! Data and Product Importance Visibility Where do we start and how do we then satisfy demand with supply? Weighted Scorecard COST GEEK TREAT: TOTALTEU]*(IF([BESTCOST]>10,SQRT([BESTCOST]),10000)+([AVGDIFFCOST]*[AVGDIFFCOST]/IF([STDDEVCOST]<1,1,[STDDEVCOST])))/IF([POSSIBLEOCEANSCHEDULES]<1,0.1,IF([POSSIBLEOCEANSCHEDULES]>12,12, [POSSIBLEOCEANSCHEDULES])) SIZE OF BOOKING NUMBER OF SCHEDULES

  11. What: 2 x 40 DRY of Whole Milk Powder When: eta 01/05/2013 to 11/05/2013 Where: Crawford Street to Singapore Product and Cost: MAEU / NZTRG-SGSIN / eta 08/05/2013 – USD2000 per 40 DRY MOLU / NZTRG-SGSIN / eta 03/05/2013 – USD1800 per 40 DRY MSCU / NZTRG-SGSIN / eta 10/05/2013 – USD1500 per 40 DRY CRAWFORD STREET to NZTRG / RAIL / USD300 per 40 DRY Lowest Score Highest Score ASSIGNMENT

  12. Conclusion Optimisation is a word often used that is not scary – actually it is pretty simple and logical! • We have agreed on a definition • We have taken care of our data and product • We know what is important • We have the necessary visibility – batch vs sequence vs prioritisation • We have a start point

  13. Conclusion Kotahi success = order satisfaction, happy customer, repeat business and word of mouth = profits, satisfaction, growth and opportunity THANK YOU

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