Integration

test ...

Sorry for the delay :(

Yes, we're testing the load balancing, load testing, shutdown ORARAC1, shutdown ORACRAC2, etc, etc. We need check the roadmap of our requests.

I am very sorry that we can not have statistics in Tuxedo 9.1 similar to "txrpt" for load balancing.

At the moment We can monitor the load balancing with psr, thank you very much Todd

Logistics Management vs Supply Chain Management

Chapter 1 Logistics

1.1 Logistics Management vs Supply Chain Management

First of all, we must clarify this big semantic matter: what is logistics? what is Supply Chain ? are these two names equivalent?

We can represent this question by this figure

Is SC part of the logistics? or is it the reverse? or is logistics replaced by SC? or are both the same? or are logistics and SC covering partly the same matter but both continue to exist ?

To answer to that question, we have to consider the definition of each concept. We use the definitions commonly accepted by the CSCMP (Council of Supply Chain Management Professionals). These definitions also are used by the APICS (The Association for Operations Management: the global leader and premier source of the body of knowledge in operations management, including production, inventory, supply chain, materials management, purchasing, and logistics.)

The logistics management is that part of the Supply Chain process, which plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customers’ requirements.

The supply chain management is the integration of key business processes, from the end user through original suppliers that provides products, services and information that add value for customers and other stakeholders.

Thus the answer to our first question is clearly

In a Supply Chain, each enterprise is a partner; each partner is fully responsible for a process that transforms inputs into outputs using some resources and following the rules or norms.

The concept of supply chain suggests a series of processes linked together (they form a chain !).

Figure 3

Somebody is the producer of the raw material, somebody transforms it into a product, somebody incorporates the product into an assembly, somebody stores the finish good, somebody sells it, somebody transports it and finally a retailer sells it to a final customer who is the consumer.

Some of these processes are sourcing, others are manufacturing and others are distribution.

If we illustrate the system for a more complex product, we obtain the hereunder schematic.

The pilot of the Supply Chain must instruct each supplier about when and to whom they have to deliver their products. He must instruct supplier "A" to first supply "B" and later the main manufacturer; for another part, he must instruct "B" to first supply the main manufacturer and later the supplier "C", if it is the right way to get the product on time as promised to the customer.


Figure 4

1.2 Flows

As indicated here above, all the partners are linked (they form a chain). These links cover 3 flows:

1. physical product flow (material flow)

The materials flow from suppliers to customers and from customers to suppliers (reverse flow).

The products are packaged (primary package, secondary package, warehousing package, transport package). Each package fills a specific function. (to see chapter 6). Containers, pallets and some packaging are circulating round trip.

The management of the materials flow must deliver products on time, in the proper sequence, exactly where they are needed.

2. information flow

Information is flowing in both directions, is passing each other, is colliding with others …

The information include order, delivery, inventory level, production status, forecasts, quotation …

The information could be considered as the piloting system of the other flows.

The information is flowing between multiple organizations and enterprises, each one having its own managing system, its own value system ….

3. financial flow

They include credit terms, payment schedules, title ownership arrangements …

A major problem concerns the coordination, the synchronization between all these flows. The final objective of the logistics / supply chain is to reduce costs and to improve service levels at the profit of all the partners of the chain, suppliers, manufacturer and customer. Each activity playing a role in making the product and the services conform to customer requirements (cost, delivery terms, quality …) is concerned.

In the past, each enterprise was trying to strangle other enterprises to obtain the major advantage (and to avoid realizing some effort). The bigger was crashing the smaller.

Today, no single enterprise is solely responsible for the competitiveness of its products and services. The benefit obtained by working in network must be shared between all the members of the chain. The sole strategy that performs is the win-win strategy.

The competitiveness suppose to give a better service, a superior service to the final user of the product / service (decreased delivery times, repairing/exchanging defective parts, maintenance, warranties, price, reliability, performance).

Today, we have to consider the total system wide cost; it includes manufacturing, transportation, packaging, warehousing, distribution, rework, repair, administrative costs. Managing the supply chain is not minimizing a single cost between two entities but, rather, on taking a global system approach to get, at the end, the better result that profits to every chain partner.

If one looks at actions in isolation, it is not possible to have a global view and to identify how an isolated action could have a reverse effect. Each decision taken by a partner of the chain has an effect on the upstream and downstream partners. And this effect could be positive or negative. For example, a supplier will reduce its inventory that leads to increase the delivery terms of the downstream partners; for example, a transportation manager will delay a delivery to increase the volume to transport and to reduce the transportation cost.

1.3 Management

It is obvious that designing and operating a supply chain so that total system wide costs are minimized and system wide service levels are improved is very challenging. It is not easy to do that inside a single enterprise, how more if one must consider several enterprises. We could write that the complexity increase exponentially with the number of partners.

with C = complexity of management, k a function depending of the product and n = number of partners.

The criteria to be considered are:

q the complexity of the network mainly if the partners are located over a large geographical area

q the cultural clash between partners

q the difference of capacities of partners: some are SME, others large enterprises, some are assembler, others are machining and some are giving service … Each partner has its own limits, its own capacities and its own resources. It is not thinkable to build a supply chain only with partners having the same constraints.

q the planning process could be different depending of many factors external to the supply chain. It is normal that an enterprise could be partner of several supply chains (example: the ball bearings supplier belongs to several automotive manufacturers supply chains).

q the supply chain is a dynamic system that evolves over time. Everything can change quickly or frequently either on the customers’ side, either on the suppliers’ side, either the market conditions, either the environmental conditions.

1.4 Three levels of management

As every activity, we have to consider the three levels: strategic, tactical and operational.

a) Strategic level.

The strategic level deals with decisions that have a long-lasting effect on the enterprise.

Every department or service has to fit with the strategy of the enterprise.

q The Supply Chain strategy must deal with the procurement of raw materials and all the components used by the enterprise.

Procurement includes packaging, transportation, documentation, warehousing.

q The Supply Chain strategy must deal with the logistics operations inside the manufacturing plant

This includes the flows through the plant, the interoperations packaging, the information, the traceability …

q The Supply Chain strategy must deal with the distribution and usage of the product by the customer.

This includes the selection of the distribution channels and the operations to supply the retailers, the instructions of use and all the operations covered by the warranty and the after sales service.

The long-lasting effect must be considered by product. If the life cycle of the product lasts several years, the strategic level covers more than 2 years; if the life cycle of the product lasts less than one year (i.e. tamagushi ….), the strategic level is not a fundamental step. But reasonably, the strategic level for the majority of the products covers 2 or 3 years.

Some of the basic questions are: 1) make or buy question;

2) location and capacities of production facilities, warehousing, transportation;

3) technologies to be mastered;

4) machines and equipments to be used, rented or …;

5) layout of the production facilities and warehouses;

6) quantities of products to be purchased, launched in production, stored, packed together, transported;

7) the relevant information for the manufacturing;

8) the training of the operators;

It is obvious that all this has a cost and therefore has to be amortized on several years.

b) Tactical level.

The tactical level concerns generally a period of time of one year. It is prepared during the last quarter of the previous year.

The tactical level has to focus on the expected situation at the end of the previous year to establish a series of significant data as 1) quantities to be distributed on each market;

2) exact quantities of raw materials and components to be purchased and when to place orders 3) the planning of manufacturing by quantities, by specifications, …

4) the distribution activities by month, mainly if the products demand is seasonal;

5) to prepare the impact of the promotions on the distribution;

6) to optimize all the logistics functions;

7) to fix the key indicators to allow a performing management;

8) to establish the calendar of each specific step to reach the annual objective;

9) to match demand and supply

The tactical level is the annual budget.

c) Operational level.

The operational level is the real time management. Some activities are planed on one week, others on a day and the updates are permanent. The operational level has to face the failure of a truck, the illness of a warehouseman or a driver, a urgent non planed order, and so on.

The quality of an organization can be measured by the respect of a well constructed plan and by the reactivity face at unforeseen situations. No waste of time, no waste of resource must be the rule for the operational manager.

He must be able: 1) to meet the better lead-times,

2) to respond to any fluctuation of the demand,

3) to deal with all the products (from fast moving goods to industrial component),

4) to face any unexpected situation.

To do that, he must pilot several logistical drivers as forecasting, transportation means, warehousing facilities, inventory, orders management, sourcing possibilities … and these drivers are fed by information. All these drivers can add value or cost at the customer’s eyes.

q Forecasting allows to feed all the other drivers

q Adapted transportation means allow fast loading and unloading and reduced operational costs by comparison with the value of the transported goods

q Warehousing facilities are located at the best operational place to supply their customers (outbound) and to receive goods from suppliers (inbound); they have well adapted infrastructures to store goods. The objective is to get the better responsiveness, to get the better control on each local market, to get the cheapest cost.

q Inventory must be adapted to the demand: enough to face unexpected demand and not too many what carries overstock and therefore additional costs and ageing products.

q Orders management reduces lead time and allows a full control on all the documents issued from these orders as picking ticket, packing list, invoice, …

q Sourcing possibilities allows a better control on the products arrival, access to the docks without waiting times, better management of the purchase orders …

We can summarize all these concepts by 3 curves as follow and the total logistics cost is the sum of these three costs:

Figure 5

We can represent these situations by the following outline representing three concrete situations:

Figure 6 a Figure 6b Figure 6c

Figure 6a represents 4 suppliers delivering to 1 central warehouse and from this warehouse to the customers;

Figure 6b represents 4 suppliers delivering to 2 central warehouses and each warehouse delivers to its customers;

Figure 6c represents 4 suppliers delivering to several warehouses and each one delivers to its own customers.

It is necessary to determine the number of warehouses, their locations, their sizes, the quantity of products to be stored and the location and number of customers to be supplied to get the best service at the lowest cost. The enterprise must compare the costs of opening more warehouses and the benefits to be closer to the customers.

For another part, it is important to take into account the specificity of the warehouses: only to supply a manufacturing facility, only to supply end customers or supplying both manufacturing facility and end customers. The basic functions are the same but they are several important differences:

q to supply a manufacturing facility means many suppliers (for raw materials and purchased components) and a few customers (manufacturing sections).

q to supply end customers means very few suppliers ( final assembly line) and a large number of customers (all the customers for finished products and spare parts)

q other differences concern the quantities, the size, the physical configurations, the variability and predictability of the demand, the unforeseen breakdowns (machines, trucks and trailers …), the capacity of each buffer between each manufacturing or supply process, lead-times acceptable by each downstream customer, size of batches, safety inventory size, risk parameters …

1.5 Supply Chain Information

As here above mentioned, information feeds all the logistics drivers. Therefore, it is important to detail the content of these information. The supply Chain Management manipulates a lot of information that each one affects strongly or weakly the results. Firstly, we have to consider the information that affect directly all the logistics drivers.

Forecast is affected by the economic situation of the market, by the financial situation, by the wealth of the population, by the obstacles to the trade, by the adequacy between the specifications of the product and the needs of the customers … All the data concerning these parameters must be considered as useful information.

Inventory is needed to face the responsiveness to the demand of the market. The Supply Chain Manager must know this requirement to establish correctly the level of inventory for each item as well as the inventory cost.

Transportation information include frequency of each transport vector, capacity of each one, availability, possibility to circulate, cost, particular requirements as national flag or piracy risk ….

Warehousing size and location have important consequences on several managerial decisions

Computerized treatment of all these data allows to simulate the actions and their result, allows a fast and very reactive circulation of the information between all the members of the network, reduces the redundancy of some encoding operations just as the error risk, allows a good traceability of all the decisions and operations, authorizes a real time follow-up, improves the visibility on the various sequences … Information and Communication technologies play a critical role concerning the exchange of information between suppliers, manufacturer, customers, carriers and other services providers. To be performing, every enterprise must master an information system adapted to his needs but also allowing to be networked with all the other members of the Supply chain: it is a very critical competitive advantage to be better than the competition on that aspect. But, everybody understands the major difficulty to interconnect different systems. Information must be cheap, available as soon as needed, without time lag,

1.6 Main actors

As illustrated on the figure 3, each process is requiring resources.

1.6.1 Human resources

The human resources who have an impact on the supply chain are:

q The buyers: they have to reference the suppliers who can work inside a supply chain. They must accept to work as the pilot of the supply chain decides it for the best of all the actors. The buyers must place the purchase orders when it is fixed by the Supply chain organization.

q The designers: they have to design products that it is possible to pack and transport on the best economical way. But they also must design products with the specifications that the suppliers can realize and all the actors of the supply chain can store and transport. Finally, the products must be designed with the objective to be customized at the latest stages of manufacturing.

q The packaging designers: they have to design packaging that can be economically manipulated by each member of the supply chain (size of the racks, trucks…), that correspond to the various quantities (to see §2.2) needed by the actors. It is also important that each packaging can be easily open and closed as frequently as required.

q The manufacturers: they must be flexible to accept small or large batches and evidently the must produce quality on time.

q The sellers: they must work with the precise specifications allowed by the design and with the quantities allowed by the agreement between all the parties.

q The transporters: they must deliver on time and in perfect condition.

q The warehousemen: they must act with the right diligence

q The computer operators: they must deliver the right information at the right time to the right people. Each supply chain member can recuperate the data without risk of mistake or confusion to build the appropriated management system.

1.6.2 Material resources

The material resources must be sufficient, in good conditions, available when needed and well adapted to the products and operations. These conditions are required to be able to link together many process operators. Indeed, if an operator doesn’t master well his process, it is thinkable that he will not be able to respect quality, quantity or delivery date.

This also supposes that the maintenance of all the equipments is well executed.

Hi,

You can still use txrpt in Tuxedo 9.1. You can also use tmadmin psr. You can also use .TMIB service.

When you say "I am very sorry that we can not have statistics in Tuxedo 9.1 similar to "txrpt" for load balancing." what exactly do you mean and what would you like to see?

Regards,
Todd Little
Oracle Tuxedo Chief Architect