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Unformatted text preview: Network Design the Supply Chain in the Supply Chain Conventional Network Materials Materials DC DC Vendor Vendor DC DC Finished Finished Goods DC Goods DC Customer Customer DC DC Customer Customer Store Store Component Component Customer Customer Store Store Manufacturing Manufacturing Vendor Vendor DC DC Plant Plant Warehouse Warehouse Customer Customer DC DC Customer Customer Store Store Components Components DC DC Customer Customer tore tore Vendor Vendor Customer Customer Final Final ssembly ssembly Finished Finished Goods DC Goods DC Customer Customer DC DC Store Store DC DC 2 Store Store Assembly Assembly Tailored Network: Multi-Echelon Finished Goods Network Regional Regional Customer Customer 1 Store Store 1 Local DC Local DC Cross Cross-Dock Dock Finished Finished Goods DC Goods DC DC DC Local DC Local DC ross ross- ock ock Store Store 1 National National Finished Finished Goods DC Goods DC Cross Cross Dock Dock l DC l DC Customer Customer 2 DC DC Store Store 2 Regional Regional Finished Finished Local DC Local DC Cross Cross-Dock Dock Store Store 2 tore tore Finished Finished Goods DC Goods DC Store Store 3 Store Store 3 3 Where inventory needs to be for a same day / next day order Where inventory needs to be for a same day / next day order response time response time - typical results typical results ----> > 26 26 DCs DCs Customer DC The number of facilities are too many and the 4 inbound economies of scale are lost and the transportation cost increases. 1. A strategic framework for facility location (continued) A Framework for Global Site Location Phase I: Define a supply chain strategy/design (Define a firms broad supply chain design) Phase II: Define the regional facility configuration (Identify regions where facilities will be located, their potential roles, and their approximate capacity) Phase III: Select a set of desirable potential sites (Select a set of potential sites within each region where facilities are to be located) Phase IV: Location options (Select a precise location and capacity p ( p p y allocation of each facilities) acility location (production & storage) Facility location (production & storage) Capacity allocation 5 2. Models for Facility Location and Capacity Allocation Information ideally is available in making design decision Location of supply sources and markets Location of potential facility sites p y Demand forecast by market Facility, labor, and material costs by site ransportation costs between each pair of sites Transportation costs between each pair of sites Inventory costs by site and as a function of quantity Sale price of product in different regions Taxes and tariffs Desired response time and other service factors 6 2. Models for Facility Location and Capacity Allocation (continued) Phase II: Network optimization models:...
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- Spring '09