time based competition in logistics management

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Time Based Competition in Logistics Management By SYAM BABU .B.S 0925556/1 MSc International Logistics

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Page 1: Time Based Competition in Logistics Management

Time Based Competition in Logistics Management

By SYAM BABU .B.S 0925556/1 MSc International Logistics

Page 2: Time Based Competition in Logistics Management

Content

The role of time in competitive advantage

P:D ratios and differences

Time-based process mapping

A method for implementing time-based practices

Page 3: Time Based Competition in Logistics Management

Key issues

The role of time in competitive advantage

What is time-based competition?

How does time-based competition link to other initiatives?

What is the purpose of time-based competition?

Page 4: Time Based Competition in Logistics Management

Definition and concepts

The role of time in competitive advantage

business advantage

quality cost

time

Page 5: Time Based Competition in Logistics Management

“The timely response to customer needs”

(This definition is on ‘timely ‘this means responding to customers need on time –neither early nor late)

The implication of this definition is that the organization must focus its capabilities on being responsive to the customer

Page 6: Time Based Competition in Logistics Management

Supplier

Supplier

Transport

Delivery

Consolidation Warehouse

Manufacturing Stage I

Manufacturing

Stage N

Manufacturing Stage II

Finished Goods

Local delivery

Finished Goods Storage

Raw Materials Source

Wholesaler

Retailer

Retailer

TransportRaw Materials Source

Local delivery

Material Handling

Raw materials or Parts Storage

N Stages

Customers

Warehouse

Manufcaturing

Material Handling

Delivery

INBOUND LOGISTICS

INTERNAL LOGISTICS

OUTBOUND LOGISTICS

Material Flow Information FlowNote:

Transport

Transport

MaterialHandling

Time based competition in Different Logistics functions

Page 7: Time Based Competition in Logistics Management

Time-based initiatives

The role of time in competitive advantage

Finding sources and causes of breakdowns

Finding sources and causes of delays

Time reduction Cost reduction Quality improving

Page 8: Time Based Competition in Logistics Management

Increased responsiveness to customer needs

Managing increased variety Increased product innovation Improved return on new products Reducing risk by relying less on forecasts

Time based opportunities to add value

Page 9: Time Based Competition in Logistics Management

Increased responsiveness to customer needs

deliver a product or

service on time

deal with customer

queries and complaints on

time

High level of responsiveness

to customer(Ladder of

loyalty)

Customer loyalty

Time based opportunities to add value

Page 10: Time Based Competition in Logistics Management

Improved return on new products

Putting new product earlier to market can

Extend the sales life of the product

Charge a higher price

Won new customers

Build a high market share through building on the initial leader

Page 11: Time Based Competition in Logistics Management

Managing increased variety

Reducing overall lead-time

Reducing product complexity

Reducing process set-up time

Production with more frequency

and smaller batches

Increased variety of products

Page 12: Time Based Competition in Logistics Management

Shortening product development lead time -helps Innovations can be capitalised on to maximum effect.

faster Innovation - competitive edge over competitors

(If competitors are innovative then reducing the time to develop imitations will keep a fast follower strategy)

Increased product innovation

Page 13: Time Based Competition in Logistics Management

The sale of the product is extended

A higher price can be charged

New customers can be won

A high market share can be won through building upon the initial lead

Improved return on new products

Page 14: Time Based Competition in Logistics Management

Time based initiatives- minimize how much forecasting is needed

Reducing production lead time – uncertain demand periods becomes shorter

Forecasting over a shorter time period- reliable forecast, less stockouts,obsolete stock

Reducing risk by relying less on forecasts

Page 15: Time Based Competition in Logistics Management

Reducing the need for working capital Reducing the need for plant and Reducing the devolvement cost Reducing the quality cost

Time based opportunities to reduce cost

Page 16: Time Based Competition in Logistics Management

Increasing the speed of flow

(Manufacturing lead time is inversely proportional to work in progress levels.)

Focusing on time

(decreases raw material, work in progress and finished good stocks.)

Lowered Inventory levels

(results in reduced working capital)

Reducing the working capital

Page 17: Time Based Competition in Logistics Management

Removal of un necessary equipments This may include pallets, rack.. office ,stores ,production ..equipments

Avoiding sunk cost (replacing outdated machinery-saving space)

Reducing plant and equipment capital

Page 18: Time Based Competition in Logistics Management

Effective use of development resource

Elimination of rework Reduction of superfluous projects

Reducing development costs

Page 19: Time Based Competition in Logistics Management

Faster error detection and problem solving(reduce the time between an error being

made and the problem being detected)

Reducing lead times

speed of feed back

Reducing quality cost

Page 20: Time Based Competition in Logistics Management

What are P- and D-times?

Why are P- and D-times important to logistics strategy?

P:D ratios and differences

Page 21: Time Based Competition in Logistics Management

P-time (Production time)

The time it takes to pass a product or service through supply chain

including the time needed to procure the longest lead time parts and the total manufacturing time

P-time = customer raises order deliver product to customer

Page 22: Time Based Competition in Logistics Management

D-time (Demand time)

The time for which a customer is willing to wait to have their demand fulfilled

Manufacturers with short D-times face increased supply chain challenges compared with those who have long D-times.

Page 23: Time Based Competition in Logistics Management

P:D ratios and differences Consequences when P-time is greater

than D-time

Source Make Deliver

Customer’s order cycle

Order fulfillment: D-time

Logistics lead time: P-time

P-time - D-time

Page 24: Time Based Competition in Logistics Management

A method for implementing time-based practices

Understand need to change

importance of supply responsiveness to customer D-time target that customer setTotal P-time

Understand process

Map whole process

Compare the P-time and D-time

Identify unnecessary process steps and large amounts of wasted time

Understand the causes of

waste

Identify the causes of unnecessary process steps and wasted time

Change the process

Choose solutions that will make the process more responsive

Review changesEvaluation

Adjustment

Feedback

Page 25: Time Based Competition in Logistics Management

Time based competition in logistics management focus on competitive advantage of speed ,which helps a network to cope with variety of products, innovation ,speed of delivery and capitalizing the growth and volume of markets.

conclusion

Page 26: Time Based Competition in Logistics Management

Harrison, A and Vanhoek,R .3rd (2008)logistics management and strategy :Competing through the supply chain FT Prentice Hall.

Bicheno,J. (2004) The New Toolbox.buckingham.Picsie Books

Stalk,G.and Hout,T.(1990) Competing Against Time. New York: Free Press

Reference

Page 27: Time Based Competition in Logistics Management

questions?

Thank you