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Supply Chain ManagementPertemuan 4 network design in the supply chainPresented By: Anggriani Profita, S.T., M.T.Learning ObjectivesAfter following this class, you will be able to:Understand the role of network design in a supply chainIdentify factors influencing supply chain network design decisionsDevelop a framework for making network decisionsUse optimization for facility location and capacity allocation decisions

The Role of Network Design in the SC

Where should facilities be located?What role should each facility play?What processes are performed at each facility?What markets should each facility serve?Which supply sources should feed each facility?How much capacity should be allocated to each facility?SC Network Design DecisionsFacilityRoleCapacity AllocationMarket & Supply AllocationFacility LocationKeputusan mengenai peranan setiap fasilitas adalah signifikan karena hal ini menentukan level fleksibilitas rantai pasok dalam menghadapi perubahan demand.Keputusan mengenai lokasi fasilitas memiliki dampak jangka panjang terhadap kinerja SC mengingat nahalnya biaya untuk menutup fasilitas atau memindahkan suatu fasilitas ke lokasi yang berbeda. Lokasi yang tepat akan membantu responsivitas rantai pasok namun tetap mampu menekan biaya.Mengalokasikan terlalu banyak kapasitas pada suatu lokasi berdampak pada rendahnya utilitas serta menaikkan biaya. Mengalokasikan kapasitas yang terlalu kecil berdampak pada lambannya respon jika demand tidak terpenuhi atau tingginya biaya apabila demand dipenuhi dari fasilitas yang jauh.Alokasi pasar dan pasokan berpengaruh terhadap biaya produksi, inventory, dan transportasi yang terjadi dalam rantai pasok guna memenuhi demand konsumen. 3The Role of Network Design in the SCNetwork design decisions include identifying facility roles, locations, and capacities as well as allocating markets to be served by different facilities.These decisions define the physical constraints within which the network must be operated as market conditions change.Good network design decisions increase supply chain profits, whereas poor network design hurts profits.

Tradeoff in SC Network DesignTradeoff in SC Network DesignAspek TinjauanNetwork 1Network 2Biaya transportasi pabrik gudangLebih besarLebih kecilSkala ekonomi pengirimanLebih sulitLebih mudahKebutuhan sumber daya pengirimanLebih banyakLebih sedikitBiaya transportasi gudang toko/pelangganLebih kecilLebih besarRata-rata jarak pengiriman gudang toko/pelangganLebih dekatLebih jauhFixed costLebih besarLebih kecilWaktu responLebih cepatLebih lambatBiaya inventoryLebih tinggiLebih rendah

Risk Pooling

Dasar pemikiran: apabila demand suatu produk antar wilayah bersifat independen maka agregasi kebutuhan dari sejumlah wilayah akan mengakibatkan penurunan tingkat ketidakpastian.Apabila ketidakpastian permintaan tinggi maka sentralisasi inventory akan mampu mengurangi tingkat persediaan (terutama safety stock) yang dibutuhkan untuk mencapai service level yang sama.Risk Pooling PolicyPolicySentralisasi inventory terpusat di satu tempat untuk melayani semua wilayah permintaanSentralisasiDesentralisasi inventory ada di masing-masing wilayah permintaanDesentralisasiSentralisasi menciptakan penurunan risiko sehingga akan mengurangi kebutuhan safety stock (dibandingkan dengan desentralisasi).Factor Influencing Network Design DecisionsStrategic factors1Technological factors2Macroeconomic factors3Political factors4Infrastructure factors5Competitive factors6Customer response7Logistic & Facility costs8

Strategic Factors

Cost leadership tend to find the lowest-cost location, even if that means locating very far from the markets they serve.

Responsiveness tend to locate facilities closer to the market and may select a high-cost location if this choice allows the firm to react quickly to changing market needs.

Competitive Strategy

Network Design Decisions14Technological FactorsHigh Fixed CostTechnology fixed cost; if production technology displays significant economies of scale, a few high-capacity locations are most effective.Low Fixed CostIf facilities have lower fixed costs, many local facilities are preferred because this helps to achieve lower transportation costs.FlexibilityFlexibility degree of consolidation; if technology is flexible, it becomes easier to consolidate manufacturing in few large facilities vice versa.

Low fixed cost, contohnya pabrik bottling Coca Cola15Macroeconomic Factors

Refer to any duties that must be paid when products and/or equipment are moved accross international, state/province, or city boundaries.Tariffs

01Tax Incentives

02Tax incentives are a reduction in tariffs or taxes that countries, states, and cities often provide to encourage firms to locate their facilities in specific areas.When designing SC networks, companies must build appropriate flexibility to help counter fluctuations in exchange rates and demand accross different countries.Exchange Rate

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Tarif (contoh bea cukai) jika suatu negara memiliki tarif yang tinggi, maka perusahaan akan mempertimbangkan mengenai perlu tidaknya melayani demand negara tersebut atau justru mendirikan fasilitas produksi di negara bersangkutan. Kesepakatan mengenai tarif dapat dilakukan pada level regional, seperti di Eropa (European Union), Amerika Selatan (MERCOSUR), America Utara (NAFTA).Insentif pajak diberikan sebagai upaya untuk menarik para investor untuk berinvestasi di suatu daerah tertentu. Besarnya insentif daerah-daerah dalam suatu negara berbeda, tergantung kepada perkembangan perekonomian daerah tersebut.Risiko perubahan nilai tukar mata uang dapat ditanggulangi dengan membangun kapasitas produksi lebih yang sifatnya fleksibel sehingga dapat digunakan untuk memasok pasar yang berbeda-beda.

16Political FactorsCompanies prefer to locate facilities in politically stablecountries where the rule of commerce and ownershipare well defined.Countries with indpendent and clear legal systems allowfirms to feel that they have recourse in the courtsshould they need it.

Mengingat faktor politik sukar untuk dikuantifikasi, perusahan cenderung menggunakan evaluasi subjektif dalam merancang jaringan rantai pasoknya.17Infrastructure FactorsKeberadaan infrastruktur yang memadai merupakan prasyarat penting dalam menempatkan fasilitas produksi di suatu daerah tertentu. Di Cina, perusahaan global menempatkan pabriknya di dekat Shanghai, Tianjin, dan Guangzhou meskipun ketiga tempat ini bukanlah daerah yang memiliki biaya tenaga kerja yang termurah. Hal ini dilakukan karena ketiga lokasi tersebut memiliki infrastruktur yang baik.18Competitive FactorsCompanies must consider competitors strategy, size, and location when designing their supply chain networks.A fundamental decision firms make is whether to locate their facilities close to competitors or far from them.The form of competition and factors such as raw material or labor availability influence this decision.

Customer Response Time and Local Presence01Firms that target customers who value a short response time must locate close to them.02If a firm is delivering its product to customers, use of a rapid means of transportation allows it to build fewer facilities and still provide a short response time.

Logistics and Facility CostsTransportation costs decrease as the number of facilities is increased.Inventory and facility costs increase as the number of facilities in a supply chain increase.Logistics and facility costs incurred within a supply chain change as the number of facilities, their location, and capacity allocation is changed.

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3If the number of facilities increases to a point where inbound economies of scale are lost, then transportation cost increases.

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Perusahaan harus mempertimbangkan biaya inventory, transportasi, dan fasilitas dalam merancang jaringan rantai pasoknya. Perancangan jaringan rantai pasok dipengaruhi oleh transformasi yang terjadi di setiap fasilitas. Apabila terjadi perubahan yang signifikan pada ukuran maupun berat material bahan baku, maka akan lebih baik jika fasilitas produksi didirikan mendekati sumber.21

PHASE I Supply Chain Strategy

Define a firms broad supply chain design. This includes determining the stages in the supply chain, and whether each supply chain function will be performed in-house or outsourced.Framework for Network Design DecisionsPHASE II Regional Facility Configuration

Identify regions where facilities will be located, their potential roles, and their approximate capacity.PHASE III Desirable Sites

Select a set of desirable sites within each region where facilities are to be located. Sites should be selected based on an analysis of infrastructure availability to support the desired production methodologies.PHASE IV Location Choice

Select a precise location and capacity allocation for each facility. The designed network objective is to maximize total profits taking into account the expected margin and demand in each market, and costs.Models for Location ProblemsSingle Facility Location: Center of Gravity, Grid, Centroid.Multi Facility Location: Multiple gravity, Mixed integer programming, Simulation, Heuristics.Capacitated Plant Location ModelGravity Location ModelIs used to find the location that minimizes the cost of transporting raw materials from the points of supply and transporting finished goods to the customers.Let:Xn, Yn: coordinate location of either a market or a supply pointCn: cost of shipping one unit for one km from or to location n the facility to be locatedDn: Quantity to be shipped from or to location n to the facilitydn: the distance to or from facility n to the facilityThe distance dn is approximated as follows: (If (x,y) is the coordinate of the location of the facility)

Type of Distance ManhattanEuclideanMinkowskiChebyshevMahalanobisDistance

Gravity Location ModelIf there are k supply and market points then total cost of transportation to and from the facility is:

The location that minimizes the TC can be obtained with the following steps:1. For each supply or market position n, calculate dn as above2. Obtain a new location (x,y) where:

3. If the new location is almost the same as (x,y) then stop, otherwise set (x,y) = (x,y) and go to step 1.

Gravity Location Model - ExampleThere are six existing facilities. The new one ( a warehouse) will serve all six facilities.

Gravity Location Model The Relevant DataXnYndnDnCn515.11001.5467.27001.881214.42002.512513.01501.95910.34001.715315.32002.1Gravity Location Model - CalculationFirst iteration using (x,y) = (0,0), Result (6.0, 6.4)XnYndnDnCnDnCnXn/dnDnCnYn/dnDnCn/dn515.11001.5147.129.429.4467.27001.8698.91048.4174.781214.42002.5277.4416.034.712513.01501.9263.1109.621.95910.34001.7330.2594.466.015315.32002.1411.882.427.5Total2128.52280.2354.2X=2128.5/354.2=6.0Y=2280.2/354.2=6.4Gravity Location Model - CalculationSecond Iteration: Result (5.4, 6.9)X=5710.8/1063.2=5.4Y=7302.1/1032.2=6.9XnYndnDnCnDnCnXn/dnDnCnYn/dnDnCn/dn515.51001.5136.627.327.3462.07001.82471.13706.6617.88125.92002.5672.71009.084.11256.21501.9555.1231.346.3592.84001.71220.52197.0244.11539.62002.1654.8131.043.7Total5710.87302.11063.2Gravity Location Model - CalculationThird Iteration: Result (5.1, 6.9)X=6550.2/1269.9=5.1Y=8807.8/1269.9=6.9XnYndnDnCnDnCnXn/dnDnCnYn/dnDnCn/dn515.91001.5126.825.425.4461.77001.83028.24542.4757.18125.72002.5698.71048.187.31256.91501.9498.0207.541.5592.14001.71590.52862.8318.115310.42002.1608.0121.640.5Total6550.28807.81269.9Gravity Location Model - CalculationFourth Iteration: Result (5.1, 6.9)X=6868.0/1353.9=5.1Y=6868.0/1353.9=6.9XnYndnDnCnDnCnXn/dnDnCnYn/dnDnCn/dn515.91001.5127.025.425.4461.57001.83360.05040.0840.08125.82002.5687.51031.385.91257.11501.9484.4201.840.4592.14001.71611.82901.2322.415310.52002.1597.3119.539.8Total6868.09319.11353.9Gravity Location Model - CalculationFinal Position: Warehouse in (5.1, 6.9)

WarehouseCapacitated Location ProblemSuppose there are n factories in different locations to be selected to satisfy demand in m market areas. Each factory location is associated with a fixed cost. The production and delivery costs to from each factory to each demand point is known.The problem to solve is: Which factory to open and from which factory each market demand is fulfilled?

Capacitated Location ProblemSuppose:i= factory location (1, 2, n)j= demand point (1, 2, m)Dj= demand of market area jKi= capacity of factory ifi= annualized fixed cost for factory icij= cost of producing and delivering one unit of product from factory i to demand area jyi= 1 if factory i is selected, 0 otherwisexij= the amount shipped from factory i to market j

Capacitated Location Problem

Capacitated Location Problem- Example

SunOil merupakan penghasil produk petrochemical yang mendunia. Direktur supply chain ingin melakukan tinjauan terhadap beberapa opsi berbeda untuk memenuhi permintaan. Salah satunya adalah mendirikan pabrik di setiap lokasi. Alternatif lainnya adalah mengkonsolidasikan pabrik hanya di beberapa daerah.

Biaya variabel yang tercantum meliputi biaya produksi, inventory, dan transportasi (dalam ribu dolar, sudah mencakup tarif) untuk berproduksi di satu wilayah untuk memenuhi permintaan di wilayah tersebut maupun wilayah lainnya.

SunOil mempertimbangkan dua ukuran pabrik yang berbeda, dimana low-capacity mampu memproduksi 10 juta unit per tahun, sementara high-capacity mampu menghasilkan 20 juta unit per tahun.37Capacitated Location Problem- ExampleCellCell FormulaEquationCopied ToB28=B9-SUM(B14:B18)5.1B28:F28B22=G14*H4+H14*J4-SUM(B14:F14)5.2B22:B26B31=SUMPRODUCT(B14:F18;B4:F8)+SUMPRODUCT(G14:G18;G4:G8)+SUMPRODUCT(H14:H18;I4:I8)Objective FunctionCapacitated Location Problem- Example

Capacitated Location Problem- Example

Capacitated Location Problem- ExampleThe lowest-cost network will have facilities located in South America, Asia, and Africa high capacity.The plant in South America should meets the North America and South America demand. Asia Europe + Asia, Africa Africa.All demand met, excess capacity in Africa plant.

Chart31612593

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Sheet1XnYndnDnCnDnCnxn/dnDnCnyn/dnDnCn/dn515.51001.5136.627.327.3462.07001.82471.13706.6617.88125.92002.5672.71009.084.11256.21501.9555.1231.346.3592.84001.71220.52197.0244.11539.62002.1654.8131.043.75710.87302.11063.25.37137794996.8681782611XnYndnDnCnDnCnxn/dnDnCnyn/dnDnCn/dn515.91001.5126.825.425.4461.77001.83028.24542.4757.18125.72002.5698.71048.187.31256.91501.9498.0207.541.5592.14001.71590.52862.8318.115310.42002.1608.0121.640.56550.28807.81269.95.15810466856.9358381351XnYndnDnCnDnCnxn/dnDnCnyn/dnDnCn/dn515.91001.5127.025.425.4461.57001.83360.05040.0840.08125.82002.5687.51031.385.91257.11501.9484.4201.840.4592.14001.71611.82901.2322.415310.52002.1597.3119.539.85.16.90.16868.09319.11353.95.07280913896.8832483642

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