Systems influencing logistics and what about the data

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Systems influencing logistics
…course of events in logistics is planned elsewhere and
what about the data…

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But we are not FMCG…
Food for thought…
2

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Sustainable logistics…
3
 P&G significantly lowered the amount of trucks on the road and saved
significant costs while making positive impact on the environment.
 “People have seen investing in sustainable technologies and innovating to reduce
their environmental impact as a hit on their bottom line. This isn't the case.
Sustainability drives efficiency – and this is particularly true in supply chain
logistics. You don't have to sacrifice profitability to achieve sustainable logistics;
the two go hand-in-hand.”
Source: https://www.theguardian.com/sustainable-business/supply-chain-future-sustainable-logistics-profit

Idle stock…
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 „Based on our estimate the total value of the excess stock in Czech Republic is
between 70 to 100 billion CZK.“
 „It is very common, that companies have bigger stocks by 25% more than
necessary and keep items on stock that have no demand on the market. The
solution lies within simple understanding. The data needed is being already
collected, they just don’t know how to read it.“
Source: Tomáš Formánek, Logio, 2015
https://byznys.ihned.cz/podnikani/provoz-firmy-it-a-software/c1-63989370-ceske-firmy-skladuji-lezaky-za-miliardy-v-logistice-pokulhavaji-a-trati

Cost Cutting
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 There are many ways… …but they should not be executed at the expense of
the customer…
 Every box in the warehouse without demand costs money…
…every box that has demand but is not in the warehouse costs money as well…
 Understand individual elements within the process and their impact up- and
down-stream the supply chain – within your organization and beyond…
 Remove root cause of problems – not just impacts…
 Eliminate silos…
 Learn from your mistakes

What triggers the logistical processes at your organization?
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 Depending on the type of business
 Customer request / Forecast
 Do you utilize forecasts…?
 Where do you use them…?
 Procurement…?
 Production…?
 Budgeting…?
 HR…?
 Plan
 How many plans do you have….? Is there really just one…?
 Where has the team gone to…?

Step1
Run
Forecast
Reports
Step2
Demand
Planning
Phase
Step 3
Supply
Planning
Phase
Step 4
Pre-S&OP
Meeting
Step 5
Exec.
S&OP
Meeting
Generic Monthly Demand-Driven S&OP Process
7
End of
Month
Statistical
Forecasts
Unconstrained
management
forecast
Capacity Constraints
Balanced supply &
demand plans
Aggregated plan review
Make key decisions
Authorized game plan
Recos and Agenda for
Exec. S&OP; Balanced
plan in units and revenue
Demand
Orchestration
Demand Shifting
Demand Shaping
Demand Sensing
Demand Shaping Source:

So who triggers the logistical events…?
 Sales?
 Marketing?
 Demand Planner?
 R&D?
All of them!

Data…
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 We have a lot of data already… …but do we have enough information…?
 What about it? How do we utilize the data? What else could we gain from it?
 How to retrieve information, which may be used for making decisions…?
 How about external data…?
 A.C. Nielsen, IMS, Karat NET, Bureau of Statistics, newspapers…

S&OP software modules
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S&OP Software
Enterprise
Resource
Planning
(ERP)
Supply Chain
Management
(SCM)
Customer
Relationship
Management
(CRM)
Business
Intelligence
(BI)

Review of the Demand Streams
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• Shipments
• Demand
• Forecast
• Promotions
• Advertising
• R&D
• Engineering
Internal
Data
• Consumption (IRS, AC
Nielsen, IMS, POS)
• Market Share
• Distribution / Market
Inventory Levels
• Competitive Activity
• Customer Data
External
Data

S&OP Dashboards
12

So, What To Do About Software?
13
1.
• Use spreadsheet
software
2.
• Use S&OP specific
software
3.
• Hybrid: start with
spreadsheet …
switch to specific
later
When in doubt, pick 3.

Inventory Quality Ratio
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Source: http://www.iqr.com/index_files/Customers.htm

So how can we help ourselves?
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 E.g. by correctly setting the safety stock
 Safety stock is a good servant, but a bad master…
 Eliminates OOS, but costs money…
 Safety stock shall cover (at least partially) the forecast error
 More accurate forecast = lower safety stock = lower costs, but still satisfied customer

So how can we help ourselves?
 Measure to improve

How can we lower the cost of logistics?
 More precise forecast
 Low idle stock
 Higher customer service
 Minimum of lost sales
 Keeping the customer in highly
competitive environment
 Understand your systems and
processes
 How does your decision impact others
up / down the stream?
 Customization? Yes, but…
 Work in teams
 S&OP / IBP process, data a systems
 Communication
 Responsibility (KPIs)
 Total cost management
 Automation
 If you can automate, automate
 But create check points and test
thoroughly, especially in case of
interconnecting more systems
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Everything is connected…
 Team
 Communication
 Communicating vessels
 Reasonable metrics
 But we are not FMCG…

Food for thought… ☺
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 How the Data Driven Technologies are Transforming Logistics and Supply
Chain Industry
 „Among the biggest challenges that come with increased visibility and more data is
determining how to best use that information to drive improvements that benefit the
customer.“
 https://www.linkedin.com/pulse/how-data-driven-technologies-transforming-logistcs-
chain-pasupuleti/
 Trends that are Shaping the Future of Logistics by Han Nabben, Damco
 „Sustainability: Customers increasingly prefer products that are made and sourced in ‘the
right way’; minimising business’ social, economic and environmental impact on society and
enhancing positive effects.“
 https://www.linkedin.com/pulse/trends-shaping-future-logistics-han-nabben-damco-
naveed-ahmed-taj/

Thank you
20
Pavel Černý
Jaguar – APS EU, s.r.o.
Pavel.Cerny@jaguar-aps.eu

Systems influencing logistics and what about the data

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Systems influencing logistics and what about the data