lesson 3 logistic efficiency through cost management
TRANSCRIPT
© Alan Harrison and Remko van Hoek 2008
Slide 3.1
Value and logistics costs
© Alan Harrison and Remko van Hoek 2008
Slide 3.2
Agenda
• Roi what is Return on Investments?– And how is it maked-up?
• Fixed/variable costs – and contribution margin• Breakeven chart• Cost-time profile
• Supply Chain management and the Balanced Scorecard• Supply Chain financial model• SCOR model
© Alan Harrison and Remko van Hoek 2008
Slide 3.3
Figure 3.1 The make-up of return on capital employed (investment)Source: Courtesy of Sri Srikanthan
© Alan Harrison and Remko van Hoek 2008
Slide 3.4
ROi
• Sales/costs
• Working capital– Inventory
– Cash and debtors
– Creditors
• Fixed assets
Two main drivers: 1. Increased profitablity
2. Increased utilisation
© Alan Harrison and Remko van Hoek 2008
Slide 3.5
Figure 3.2 Three ways to cut the ‘total cost cube’Source: Courtesy of Sri Srikanthan
© Alan Harrison and Remko van Hoek 2008
Slide 3.6
Figure 3.6 Break-even chart ASource: Courtesy of Sri Srikanthan
© Alan Harrison and Remko van Hoek 2008
Slide 3.7
Figure 3.7 Break-even chart BSource: Courtesy of Sri Srikanthan
© Alan Harrison and Remko van Hoek 2008
Slide 3.8
Figure 3.8 Cost–time profile for poultry productSource: After Bernon et al., 2003, reprinted by permission of EIASM
© Alan Harrison and Remko van Hoek 2008
Slide 3.9
Figure 3.9 Cost–time gridSource: Whicker et al., 2006
© Alan Harrison and Remko van Hoek 2008
Slide 3.10
Figure 3.11 Linking supply chain management to the balanced scoreboardSource: After Brewer and Speh, 2000
© Alan Harrison and Remko van Hoek 2008
Slide 3.11
Figure 3.13 Five distinct management processesSource: After Supply Chain Council, www.supply-chain.org
© Alan Harrison and Remko van Hoek 2008
Slide 3.12
Based upon 5 distinct management processes
1. Plan
2. Source
3. Make
4. Deliver
5. Return
Level 1: Broad definition of plan, source, make, deliver and return
Level 2: Defines core process categories that are possible scenarios
Level 3: Provides the process breakdown needed to describe each element that comprises the level 2 categories
© Alan Harrison and Remko van Hoek 2008
Slide 3.13
Table 3.6 Supply chain performance is tied to measurements that can be BenchmarkedSource: www.supply-chain.org
© Alan Harrison and Remko van Hoek 2008
Slide 3.14
Table 3.7 Supply chain performance evaluated within the context of the competitive environment
© Alan Harrison and Remko van Hoek 2008
Slide 3.15
Table 3.7 Supply chain performance evaluated within the context of the competitive environment (Continued)
© Alan Harrison and Remko van Hoek 2008
Slide 3.16
Cost types:
• Value creation or cost?
• Product development• Purchasing• Stocks• Risk costs i.e. durability• Capital costs• Production costs• Distribution• Customers service
• Information and ordre processing• After-sales service and service