Page 313 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes The computer modelling demonstrated that using a single-point facility would not impair
service to Tesco’s stores. The simulation also indicated that the company might benefit by
trying some alternative approaches. “We could see an advantage to not servicing all of the
products through one central point, but having some kind of cross-docking through the
other four [distribution centres] for stores not close to the central facility,” Galloway
recalls. Finally, the simulation gave Tesco some insights into its current operation that
allowed it to make an immediate, money-saving change. The company discovered that it
could cut back deliveries of certain slow-moving items to once a week and still maintain
adequate stock for its stores. Although computer simulation helped persuade the board to
approve the restructuring plan, it had another benefit as well. The simulation gave Tesco’s
logistics managers a deeper insight into their own supply chain’s operation. “By the end
of the exercise,” says Galloway, “they had a better understanding of that area of the
business. It got them thinking about costs and efficiencies of the supply chain.”
Question
What do you infer from case? Provide some case facts in your own words.
Source: James Aaron Cooke, “Simulate before You Act,” Logistic Management and Distribution Report,
September 1999, pp. 77–80.
13.3 Summary

 This unit provides a comprehensive review of the logistics planning process, decisions,
and techniques.

 It is designed to guide the logistics manager through the overall process of situation
analysis, alternative identification, data collection, quantitative evaluation, and
development of viable recommendations.

 The methodology, which is generic enough for most logistics problem solving, includes
three phases: problem definition and planning, data collection and analysis, and
recommendations and implementation.
 The problem definition and planning phase is concerned with the feasibility assessment
and project planning.

 Feasibility assessment includes situation analysis, supporting logic development, and
cost/benefit estimation. Project planning requires statements of objectives and constraints,
measurement standard definition, analysis technique specification, and project work plan
development.
 The data collection and analysis phase develops assumptions, collects data, and completes
the quantitative and qualitative analyses.
 Assumptions development and data collection include tasks to define the analysis approach,
formalize assumptions, identify data sources, and collect data.
 The analysis step involves definition of analysis questions, completion of validation and
baseline analyses, and completion of alternative and sensitivity analyses.

 The recommendations and implementation phase develops the final plan. The
recommendation development step includes identification and evaluation of the best
alternatives.
 The implementation step defines a recommended course of action, schedules development,
defines acceptance criteria, and schedules final implementation.

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