1. MARIUS M. SOLOMON CRT, University of Montreal March, 2000 Tighter Supply Chains through Operations Research

2. Logistics Evolution National Regional Local Global

3. Progression of Competitive Advantage Low Wage Rates Scale Facilities Focused Production Increased Variety Fast Response Time Quality Cost Based Management Time Based Management ‘ 50s ‘ 60s ‘ 70s ‘ 80s ‘ 80s ‘ 90s E-Business Technology Enabled Management 2000 Source: Adapted from Stalk and Hout , Competing Against Time, 1991

4. Competitive Advantage Source: Adapted from Gunn, Manufacturing for Competitve Advantage , Ballinger, 1987 Global Markets Global Competitors World-Class Manufacturing Technology Quality People Planning Strategic Vision Management Resources Distribution Production Process Planning and Control Product and Process Design Aftersale Service and Support Suppliers TQC JIT Integration Customers CIM/CIL Speed

6. Logistics Integration Demand Forecasting Purchasing Requirements Planning Production Planning Manufacturing Inventory Warehousing Materials Handling Industrial Packaging Inventory Distribution Planning Order Processing Transportation Customer Service Information Technology

7. The physical, financial, and information networks that move the materials, funds, and related information through the full logistics process ... from acquisition of raw materials to delivery of finished products to the end user. So what exactly is this Supply Chain? Jim Kelly, Chairman and CEO of United Parcel Service, American Chamber of Commerce, Beijing, China, May 4, 1999

9. Nodes and Links in a Logistics System Retailer Plant Warehouse Retailer Warehouse Node Node Node Node Node Link Link Link Link Link

10. Typical Supply Chain Network Suppliers Plants Distribution Centers Customers

11. Throughput levels Employment levels Distribution routes Vehicle scheduling Order tracking Inventory replenishment Hierarchy of Logistics Management Decisions STRATEGIC TACTICAL OPERATIONAL Location Choice Transport Mode Selection Vendor Choice Uncertainty Scope Time frame

12. Logistics Environments External -Macro Intrafirm-Micro Value-added Role Time Utility Place Utility Economic Impacts Economic Importance Interfirm - Distribution Channels Channel Structure Relationships Competitive Advantage Value Chain Logistics Interfaces with Value Activities Source: Adapted from Coyle, Bardi, and Langley, The Management of Business Logistics , West , 1992.

13. Production Form Utility Logistics Place Utility Marketing Possession Utility Fundamental Utility Creation in the Economy Time Utility Source: Adapted from Coyle, Bardi, and Langley, The Management of Business Logistics , West, 1992.

14. Human Resource Management The Generic Value Chain Source: Michael E. Porter, Competitive Advantage , Free Press, 1985. Support Activities Inbound Logistics Operations Outbound Logistics Marketing and Sales Service Procurement Technology Development Firm Infrastructure Primary Activities Margin Margin Cost leadership Differentiation Focus

15. Conflicting Objectives Fewer Objectives High revenues through: High levels of product availability Sales and Marketing Cost-effective production through: High, capacity utilization Long production runs Production Reduce investments and costs through: Fewer facilities Lower inventory levels Finance and accounting Implications Customer Service Disrupting factors in production Inventories Higher Higher Lower Lower More Source: Magee, Copacino, Rosenfield, Modern Logistics Management , Wiley, 1985. Few set-ups Logistics

16. Cost Trade-offs in Logistics Product Price Promotion Place / Customer Service Levels Total Cost =Transportation costs + Inventory carrying costs +... Source: Lambert and Stock , Strategic Logistics Management, Irwin, 1993 . Inventory carrying costs Lot quantity cost Order processing and information costs Warehousing costs (throughput cost not storage) Transportation costs Logistics Marketing

17. Distribution Channels Retailers Farm and Raw Materials Wholesalers Consumers and Government Manufacturers and Industrial Users Inventory Repositioning

18. Distribution Channel -- Loose Links, Independent Businesses Source: Adapted from Bowersox and Closs, Logistical Management McGraw-Hill , 1996. Inventory management by each channel participant Distributor Retailer Company Truck Common Carrier Local Delivery Manufacturer Manufacturer

19. The Supply Chain Textile Production Apparel Retail Raw Materials Customers Apparel Pipeline Information sharing Joint planning Pipeline inventory management

20. Organization of Production-Distribution System 3 2 2 6 Inventory Inventory Inventory 1 1 1 1 1 0.5 0.5 Factory Factory Warehouse Distributors Retailers Orders From Customers Delivery of Goods To Customers Weeks Forrester, J.W. (1958) Industrial Dynamics: A Major Breakthrough for Decision Makers. Harvard Business Review.

21. The Apparel Pipeline Material Customer Raw Source: Blackburn, Time Based Competition, 1991 Average Time: 66 Weeks Pipeline inventory management Information sharing Joint planning Textile Production Apparel Retail

22. Effect of Lead Time on Retailer’s Stocking Decision FORECAST ERROR (%) TIME +40 -40 +20 -20 0 -26 Weeks -16 Weeks Start of Season Source: Blackburn, Time Based Competition, 1991 +/-20% +/-40% +/-10%

23. Two-Way Flows in Apparel Chain Textiles Apparel Retail Point of Sale Product Orders and Capacity Commitments Inventory and Order Information Sales Information Source: Blackburn, Time Based Competition, 1991

24. Keys to Fast-Cycle Logistics Information Sharing Cultural Change From Top Down Information Technology Partnerships Shorter Manufacturing Cycles Fast Cycle Logistics Source: Blackburn, Time Based Competition, 1991

36. Extended-Enterprise Supply-Chain Management at IBM Personal Systems Group and Other Divisions Source: G. Lin et al., ITERFACES 30: 1 January–February 2000 (pp. 7–25)

37. Cooperative Multiobjective Decision Support for the Paper Industry Source: S. Murthyet al., I TERFACES 29: 5 September–October 1999 (pp. 5–30) The A-team architecture