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Unit 13: Logistics Design and Operational Planning

of the current system, while the data collection and analysis activities focus on new system Notes
design, development, and validation.

Self Assessment

Fill in the blanks:

1. …………………… of logistics system design and planning provides the foundation for
the entire project.
2. Logistics design and planning must begin with a comprehensive …………………… of the
current logistics situation.
3. …………………… focuses on the application and capabilities of key logistics technologies,
including transportation, storage, materials handling, packaging, and information
processing.
4. Service improvement includes results that enhance ……………………
5. Once the feasibility assessment and project plan are completed, …………………… focuses
on data collection and analysis.
6. …………………… define the constraints and limitations that must be included to fit the
problem to the analysis technique.
7. The majority of data required in a logistical study can be obtained from ……………………
8. …………………… operationalises planning and design efforts by making specific
management recommendations and developing implementation plans.

13.2 SC Analysis Methods and Techniques

High-performance logistics requires regular comprehensive analysis of supply chain tactics and
strategies. Regular freight lane analysis is necessary to respond to rate changes and balance of
freight flows; tactical inventory analyses, to identify items with excess inventory and to determine
the appropriate inventory target levels; and location analysis, now often termed supply chain
planning, to perform the strategic evaluation of supply chain alternatives such as sourcing,
plant location, warehouse location, and market service areas, increasingly important to optimize
flows for global supply chains. Dynamic simulation is used to investigate the dynamics of
multiple-stage inventories such as among suppliers, plants, and distribution centres, and tactical
transportation analysis assists in truck routing and scheduling. For each of these types of decisions,
the following sections describe the specific questions, alternative analytical techniques, and
typical data requirements.

13.2.1 Freight Lane Analysis

One common logistics analysis concerns transportation movements on specific freight lanes. A
freight lane refers to the shipment activity between a pair of origin and destination points. The
analysis can be completed on a very specific basis between facilities or on a broader regional
basis. Freight lane analysis focuses on the balance of volume between origin and destination
points. To maximize vehicle utilization, movements should be balanced, or roughly equal, in
both directions. Triangular freight lanes attempt to coordinate movement between three points
by moving combinations of material and finished product between suppliers, manufacturers,
and customers.
Freight lane analysis involves both movement volume and the number of shipments or trips
between points. The objective is to identify imbalances that offer opportunities for enhanced

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