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Time Based Competition in Logistics Management
By SYAM BABU .B.S 0925556/1 MSc International Logistics
Content
The role of time in competitive advantage
P:D ratios and differences
Time-based process mapping
A method for implementing time-based practices
Key issues
The role of time in competitive advantage
What is time-based competition?
How does time-based competition link to other initiatives?
What is the purpose of time-based competition?
Definition and concepts
The role of time in competitive advantage
business advantage
quality cost
time
“The timely response to customer needs”
(This definition is on ‘timely ‘this means responding to customers need on time –neither early nor late)
The implication of this definition is that the organization must focus its capabilities on being responsive to the customer
Supplier
Supplier
Transport
Delivery
Consolidation Warehouse
Manufacturing Stage I
Manufacturing
Stage N
Manufacturing Stage II
Finished Goods
Local delivery
Finished Goods Storage
Raw Materials Source
Wholesaler
Retailer
Retailer
TransportRaw Materials Source
Local delivery
Material Handling
Raw materials or Parts Storage
N Stages
Customers
Warehouse
Manufcaturing
Material Handling
Delivery
INBOUND LOGISTICS
INTERNAL LOGISTICS
OUTBOUND LOGISTICS
Material Flow Information FlowNote:
Transport
Transport
MaterialHandling
Time based competition in Different Logistics functions
Time-based initiatives
The role of time in competitive advantage
Finding sources and causes of breakdowns
Finding sources and causes of delays
Time reduction Cost reduction Quality improving
Increased responsiveness to customer needs
Managing increased variety Increased product innovation Improved return on new products Reducing risk by relying less on forecasts
Time based opportunities to add value
Increased responsiveness to customer needs
deliver a product or
service on time
deal with customer
queries and complaints on
time
High level of responsiveness
to customer(Ladder of
loyalty)
Customer loyalty
Time based opportunities to add value
Improved return on new products
Putting new product earlier to market can
Extend the sales life of the product
Charge a higher price
Won new customers
Build a high market share through building on the initial leader
Managing increased variety
Reducing overall lead-time
Reducing product complexity
Reducing process set-up time
Production with more frequency
and smaller batches
Increased variety of products
Shortening product development lead time -helps Innovations can be capitalised on to maximum effect.
faster Innovation - competitive edge over competitors
(If competitors are innovative then reducing the time to develop imitations will keep a fast follower strategy)
Increased product innovation
The sale of the product is extended
A higher price can be charged
New customers can be won
A high market share can be won through building upon the initial lead
Improved return on new products
Time based initiatives- minimize how much forecasting is needed
Reducing production lead time – uncertain demand periods becomes shorter
Forecasting over a shorter time period- reliable forecast, less stockouts,obsolete stock
Reducing risk by relying less on forecasts
Reducing the need for working capital Reducing the need for plant and Reducing the devolvement cost Reducing the quality cost
Time based opportunities to reduce cost
Increasing the speed of flow
(Manufacturing lead time is inversely proportional to work in progress levels.)
Focusing on time
(decreases raw material, work in progress and finished good stocks.)
Lowered Inventory levels
(results in reduced working capital)
Reducing the working capital
Removal of un necessary equipments This may include pallets, rack.. office ,stores ,production ..equipments
Avoiding sunk cost (replacing outdated machinery-saving space)
Reducing plant and equipment capital
Effective use of development resource
Elimination of rework Reduction of superfluous projects
Reducing development costs
Faster error detection and problem solving(reduce the time between an error being
made and the problem being detected)
Reducing lead times
speed of feed back
Reducing quality cost
What are P- and D-times?
Why are P- and D-times important to logistics strategy?
P:D ratios and differences
P-time (Production time)
The time it takes to pass a product or service through supply chain
including the time needed to procure the longest lead time parts and the total manufacturing time
P-time = customer raises order deliver product to customer
D-time (Demand time)
The time for which a customer is willing to wait to have their demand fulfilled
Manufacturers with short D-times face increased supply chain challenges compared with those who have long D-times.
P:D ratios and differences Consequences when P-time is greater
than D-time
Source Make Deliver
Customer’s order cycle
Order fulfillment: D-time
Logistics lead time: P-time
P-time － D-time
A method for implementing time-based practices
Understand need to change
importance of supply responsiveness to customer D-time target that customer setTotal P-time
Understand process
Map whole process
Compare the P-time and D-time
Identify unnecessary process steps and large amounts of wasted time
Understand the causes of
waste
Identify the causes of unnecessary process steps and wasted time
Change the process
Choose solutions that will make the process more responsive
Review changesEvaluation
Adjustment
Feedback
Time based competition in logistics management focus on competitive advantage of speed ,which helps a network to cope with variety of products, innovation ,speed of delivery and capitalizing the growth and volume of markets.
conclusion
Harrison, A and Vanhoek,R .3rd (2008)logistics management and strategy :Competing through the supply chain FT Prentice Hall.
Bicheno,J. (2004) The New Toolbox.buckingham.Picsie Books
Stalk,G.and Hout,T.(1990) Competing Against Time. New York: Free Press
Reference
questions?
Thank you
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