supply chain sustainability and humanitarian logistics chapter 13 copyright ©2013 pearson...

Supply Chain Sustainability and Humanitarian Logistics

Chapter 13Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13- 01

What is Sustainability?

Sustainability

A characteristic of processes that are meeting humanity’s needs without harming future generations.

13- 02Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Supply Chains and Sustainability


Environmental Responsibility

FinancialResponsibility

Social Responsibility

Supply Chains and

Sustainability

Supply Chain Sustainability Efforts

Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13- 04

Financial Responsibility

Environmental Responsibility--- Reverse Logistics

--- Efficiency

Social Responsibility--- Disaster Relief Supply Chains--- Ethics

What is Humanitarian Logistics?

Humanitarian LogisticsThe process of planning, implementing and controlling the efficient, cost-effective flow and storage of goods and materials, as well as related information, from the point of origin to the point of consumption for the purpose of alleviating the suffering of vulnerable people. 13- 05Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Sustainability across the Organization

• Environmental protection

• Productivity improvement

• Risk minimization

• Innovation

Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 06

What is Reverse Logistics?

Reverse Logistics

The process of planning, implementing and controlling the efficient, cost-effective flow of products, materials, and information from the point of consumption back to the point of origin for returns, repair, remanufacture, or recycling.


Flows in a Closed-Loop Supply Chain


Production process

Distribution/Retailers

Product information

New service/product

development process Recycle

parts and materials

Remanufacture

Repair

Returns processor

Customers

Direct reuse

Waste disposal

Forward flowReverse flow

Reverse Logistics

• Financial Implications

– Fee

–Deposit fee

–Take back

–Trade-in

–Community programsCopyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 09

Energy Efficiency

• Carbon footprint

–The total amount of greenhouse gasses produced to support operations, usually expressed in equivalent tons of carbon dioxide (CO2)


Transportation Distance

• Route Planning

– Shortest route problem• Find the shortest distance between two

cities in a network or map.

– Traveling salesman problem• Find the shortest possible route that visits

each city exactly once and returns to the starting city.


Nearest Neighbor Heuristic

• Steps– Start with the city that is designated as the central

location. Call this city the start city. Place all other cites in an unvisited set.

– Choose the city in the unvisited set that is closest to the start city. Remove that city from the unvisited set.

– Repeat the procedure with the latest visited city as the start city.

– Conclude when all cities have been visited, and return back to the central location.

– Compute the total distance traveled along the selected route.


Four-City Traveling Salesman Problem


Central Hub

A

CB

130

90

85 80

100

120

Example 13.1

• Hillary and Adams, Inc. is a privately-owned firm located in Atlanta that serves as the regional distributor of natural food products for Georgia, Kentucky, North Carolina, South Carolina, and Tennessee.

• Every week, a truck leaves the large distribution center in Atlanta to stock local warehouses located in Charlotte, NC, Charleston, SC, Columbia, SC, Knoxville, TN, Lexington KY, and Raleigh, NC.

• The truck visits each local warehouse only once, and returns to Atlanta after all the deliveries have been completed.


Example 13.1


From/To Atlanta Charleston Charlotte Columbia Knoxville Lexington Raleigh

Atlanta 0 319 244 225 214 375 435

Charleston 319 0 209 116 373 540 279

Charlotte 244 209 0 93 231 398 169

Columbia 225 116 93 0 264 430 225

Knoxville 214 373 231 264 0 170 351

Lexington 375 540 398 430 170 0 498

Raleigh 435 279 169 225 351 498 0

The distance between any two cities in miles is given below:

Example 13.1

• John Jensen is worried about the rising fuel costs and is interested in finding a route that would minimize the distance traveled by truck.

• Use the Nearest Neighbor heuristic to identify a route for the truck and compute the total distance traveled.


Example 13.1

• Step 1– Start with Atlanta and place all other cities in the

unvisited set.• Charleston, Charlotte, Columbia, Knoxville, Lexington,

Raleigh

• Step 2– Select the closest city to Atlanta in the unvisited set,

which is Knoxville.

– Remove Knoxville from the unvisited set.– The partial route is now Atlanta-Knoxville which is:

• 214 miles


Example 13.1

• Step 3 – Scan the unvisited set for the city closest to Knoxville,

which is Lexington.– Remove Lexington from the unvisited set.– The partial route is now Atlanta-Knoxville-Lexington

which is:• 214 + 170 = 384 miles

• Step 4 – Repeat this procedure until all cities have been removed

from the unvisited set. – Connect the last city to Atlanta to finish the route.


Example 13.1• Step 5 - Compute the total

distance traveled along the selected route

• Using Nearest Neighbor– Atlanta– Knoxville– Lexington– Charlotte– Columbia– Charleston– Raleigh– Atlanta


Total distance starting with Atlanta

214 + 170+ 398 + 93 + 116 + 279 + 435 = 1,705 miles

Example 13.1

• Use the Nearest Neighbor heuristic again to see if a better solution exists:


Charleston – Columbia – Charlotte – Raleigh – Knoxville – Lexington – Atlanta – Charleston

116 + 93 + 169 + 351 + 170 + 375 + 319 =

1,593 miles

Example 13.1


Charlotte – Columbia – Charleston – Raleigh – Knoxville – Lexington – Atlanta – Charlotte

93 + 116 + 279 + 351 + 170 + 375 + 244 = 1628 miles

Columbia – Charlotte – Raleigh – Charleston –Atlanta – Knoxville – Lexington - Columbia

93 + 169 + 279 + 319 + 214 + 170 + 430 =1674 miles

Example 13.1


Knoxville – Lexington – Atlanta – Columbia – Charlotte – Raleigh – Charleston – Knoxville

170 + 375 + 225 + 93 + 169 + 279 + 373 = 1684 miles

Lexington – Knoxville – Atlanta – Columbia – Charlotte – Raleigh – Charleston – Lexington

170 + 214 + 225 + 93 + 169 + 279 + 540 =1690 miles

Example 13.1


Raleigh – Charlotte – Columbia – Charleston – Atlanta – Knoxville – Lexington – Raleigh

169 + 93 + 116 + 319 + 214 + 170 + 498 = 1579 miles

Of the 7 routes , the best one starts with Raleigh for a travel distance of 1579 miles.

Application 13.1

• Equipment Repair Inc. is a privately owned firm located in Monroe Kansas.

• Each workday a repair vehicle is dispatched to customer locations that have requested an equipment repair.

• After all repairs have been completed, the vehicle must be returned to the shop in Monroe.

• For one particular day, 5 customers in 5 different cities must be visited.


Application 13.1

• The distance between any two customers in miles reported by city name is given below:


To/From Monroe Apex Concord Dover Oxford

Monroe - 15 30 10 20

Apex 15 - 12 22 25

Concord 30 12 - 5 26

Dover 10 22 5 - 18

Oxford 20 25 26 18 -

Application 13.1

• Use the Nearest Neighbor heuristic to identify an efficient route for the truck and compute the truck’s total distance traveled.

– Start with Monroe and place all other cities in the unvisited set.

– Select the closest city to Monroe in the unvisited set, which is Dover. Remove Dover from the unvisited set. • The partial route is now Monroe – Dover, which is

10 miles. Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 26

Application 13.1

• Repeat the procedure until all cities have been removed from the unvisited city set. Connect the last city to Monroe to complete the route.


— Scan the unvisited set for the city closest to Dover, which is Concord.

Remove Concord from the unvisited set. —The partial route is now Monroe-Dover –

Concord, which is: 10 + 5 = 15 miles.

Application 13.1

• Compute the total distance traveled along the selected route. – The route using the nearest neighbor heuristic is:


= 10 +5 + 12 + 25 + 20

= 72 miles

Dover – Concord – Apex – Oxford - Monroe Monroe –

Application 13.1


Concord - Dover – Monroe - Oxford – Apex

= 72 miles

Dover – Monroe – Apex – Oxford – Concord

= 81 miles

= 12 + 5 + 10 + 20 + 25

= 5 + 10 + 15 + 25 + 26

Apex –

Concord –

Application 13.1


Concord – Apex – Monroe – Oxford – Dover

= 70 miles

Dover – Concord – Apex – Monroe – Oxford

= 70 miles

= 5 + 12 + 15 + 20 + 18

= 18 + 5 + 12 + 15 + 20Oxford –

Dover –

Application 13.1

• This approach results in the following best route:


Dover – Concord – Apex – Monroe – Oxford – Dover

= 70 miles

= 5 + 12 + 15 + 20 + 18

Freight Density

• Freight rates are based on the following factors:– The freight density– The shipment’s weight– The distance the shipment is moving– The commodity’s susceptibility to damage– The value of the commodity– The commodity’s loadability and handling

characteristics.


Calculating Break-Even weight

• To determine the break-even weight between two adjacent weight breaks we define the following variables:

x = break-even weightA = lower weight bracketB = next highest weight bracketC = freight rate relative to AD = freight rate relative to B

Break-even weight: x = (BD)/CCopyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 33

Weight Breaks and Freight Class($/cwt)


Class < 500 (lbs) 500 (lbs) 1,000 (lbs) 2,000 (lbs) 5,000 (lbs)10,000

(lbs)> 20,000

(lbs)

50.00 34.40 28.32 24.25 23.04 17.58 15.74 10.47

55.00 36.94 30.50 26.12 24.82 18.93 17.41 11.58

60.00 39.59 32.69 27.99 26.60 20.29 19.08 12.69

65.00 41.94 34.64 29.66 28.18 21.49 20.27 13.48

70.00 44.64 36.86 31.56 29.99 22.88 21.94 14.59

77.50 48.10 39.72 34.01 32.32 24.65 23.85 15.86

85.00 51.90 42.86 36.70 34.87 26.60 26.24 17.45

92.50 55.89 46.15 39.52 37.56 28.64 28.38 18.87

100.00 60.27 49.77 42.61 40.50 30.89 30.77 20.46

Example 13.2

• One of the product produced by Kitchen Tidy is Squeaky Kleen, a tile cleaner used by restaurants and hospitals. Squeaky Kleen comes in 5-gallon containers, each weighing 48 lbs.

• Currently Kitchen Tidy ships four pallets of 25 units each week to a distribution center.

• The freight classification for this commodity is 100.


Example 13.2• In an effort to be environmental responsible, Kitchen Tidy asked

their product engineers to evaluate a plan to convert Squeaky Kleen into a concentrated liquid by removing some water from the product which would allow the engineers to design a smaller container so 50 units can be loaded on each pallet.

• Each container would weigh only 42 pounds.

• This would reduce the freight density and the freight class to 92.5.

• What would the savings in freight costs be with the new product design?


Example 13.2

• Current Product Design:– Weekly shipment =

(Number of pallets)(units per pallet)(pounds per unit)(4) * (25) * (48) = 4,800 pounds

– Break-even weight (Freight Class = 100)(50) * (30.89) / (40.50) = 38.14 or 3,814 pounds**The shipment qualifies for the lower freight rate**

– Total weekly shipping cost(48) * (30.89) = $1,482.72


Example 13.2

• New Product Design:

– Weekly shipment = (Number of pallets)(units per pallet)(pounds per unit)(2) * (50) * (42) = 4,200 pounds

– Break-even weight (Freight Class = 92.5)(50) * (28.64) / (37.56) = 38.126 or 3,813 pounds**The shipment qualifies for the lower freight rate**


Example 13.2

• New Product Design:

– Total weekly shipping cost(42) * (28.64) = $1,202.88

– Savings = $1,482 - $1,202.88 = $279.84 per week


Application 13.2

• Kayco Stamping in Ft. Worth, Texas ships sheet metal components to a switch box assembly plant in Waterford, Virginia.

• Each component weights approximately 25 lbs and 50 components fit on a standard pallet.

• A complete pallet ships as freight class 92.5.• Calculate the shipment cost for 3 and 13 pallets.


Application 13.2

• At 3 pallets or 150 pieces

– Shipping Weight

– Break-even weight (Freight Class = 92.5)


Application 13.2


– Shipping Weight (150) * (25) = 3,750 pounds

– Break-even weight (Freight Class = 92.5)(50) * (28.64) / (37.56) = 38.13 or 3,813 pounds**The shipment does NOT qualify for the lower freight rate** Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 42

Application 13.2


– Total shipping cost

– The per-unit shipping charge


Application 13.2


– Total shipping cost(37.5) * (37.56) = $1,408.50

– The per-unit shipping charge$1408.50/150$9.39


Application 13.2


– Shipping Weight

– Break-even weight (Freight Class = 92.5)


Application 13.2• At 13 pallets or 650 pieces

– Shipping Weight (650) * (25) = 16,250 pounds

– Break-even weight (Freight Class = 92.5)(200) * (18.87) / (28.38) = 132.98 or 13,298 pounds**The shipment qualifies for the lower freight rate**


Application 13.2


– Total shipping cost

– The per-unit shipping charge


Application 13.2


– Total shipping cost(162.5) * (18.87) = $3,066.38

– The per-unit shipping charge$3,066.38/650$4.72


Transportation Mode

• Major Modes of Transportation–Air freight–Trucking– Shipping by Water–Rail

• Intermodal shipments


Transportation Mode

• Transportation Technology

–Relative drag

–Payload ratio

–Propulsion systems


Disaster Relief Supply Chains

• Disaster – A serious disruption of the functioning of society causing widespread human, material, or environmental losses which exceed the ability of the affected people to cope using only its own resources.

–Human-related–Natural


Humanitarian Supply Chain Operations


Prepare

Disaster

Response Recovery

Forecasts and Early Warnings

Role of SCM in Disaster Relief

• Understand that the timetable and ultimate customer for a supplier changes rapidly.

• Design the supply chain to link the preparation activities to the initial response activities and the recovery activities.

• Link disaster relief headquarters with operations in the field.


Role of SCM in Disaster Relief

• Life Cycle of Disaster Relief– Brief needs assessment– Development of initial supply chains for flexibility– Speedy distribution of supplies to the affected

regions based on forecasted needs– Increased structuring of the supply chain as time

progresses: receive supplies by fixed schedule or on request

– Dismantling/turning over of the supply chain to local agencies.


Disaster Relief Supply Chains

• Supply Chain Management Challenges– Design implications– Command and control– Cargo security– Donor independence– Change in work flow– Local infrastructure– High employee turnover– Poor communication


Supply Chain Ethics

• Buyer-Supplier Relationships– Identifying ethical and unethical work

practices

• Facility Location

• Inventory Management


Supply Chain Ethics• Buyer-Supplier Relationships

– SA8000:2008• Child Labor• Forced Labor• Health and Safety• Freedom of Association and Right to Collective

Bargaining• Discrimination• Discipline• Working hours• Compensation• Management SystemsCopyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 57

Managing Sustainable Supply Chains

• Develop a sustainable supply chain framework.• Gather data on current supplier performance and

use that information to screen new suppliers.• Require compliance across all business units.• Engage in active supplier management utilizing

ethical means.• Provide periodic reports on the impact of supply

chains on sustainability.


Solved Problem 1

• Greenstreets Recycling Inc. collects used motor oil from several collection sites around the Greater Stanford area.

• In order to minimize the use, and thereby the cost of its labor, vehicle, and energy resources, the company is interested in locating the shortest route that will allow its collection vehicle to visit each collection site exactly once.

• Provide an efficient route for the collection vehicle.Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13 - 59

Solved Problem 1


From/To A B C D E F

A - 25 50 48 41 60

B 25 - 35 22 23 43

C 50 35 - 25 47 65

D 48 22 25 - 24 40

E 41 23 47 24 - 21

F 60 43 65 40 21 -

The distance between any two sites in miles is given below

Solved Problem 1

• Begin at the recycling facility (Site A) and proceed to its nearest neighbor (Site B) which is 25 miles away.

• From Site B proceed to its nearest neighbor– Proceed from B to D - 22 miles

• From Site D proceed to site E– 24 miles

• From Site E proceed to site F– 21 miles


Solved Problem 1

• From Site F proceed to Site C– 65 miles

• From Site C return to Site A– 50 miles


Solved Problem 1

• Compute the total distance traveled along the selected route

• Using Nearest Neighbor– A– B– D– E– F– C– A


Total Distance starting at site A

25 + 22 + 24 + 21 + 65 + 50 = 207 miles

Solved Problem 1

• Use the Nearest Neighbor heuristic again to see if a better solution exists:


B – D – E – F – A – C - B

22 + 24 + 21 + 60 + 50 + 35

212 miles

Solved Problem 1


C – D – B – E – F – A - C

25 + 22 + 23 + 21 + 60 + 50

201 miles

D – B – E – F – A – C – D

22 + 23 + 21 + 60 + 50 + 25

201 miles

Solved Problem 1


E – F – D – B – A – C – E

21 + 40 + 22 + 25 + 50 + 47

205 miles

F – E – B – D – C – A – F

21 + 23 + 22 + 25 + 50 + 60

201 miles

Solved Problem 1

• The routes starting with C, D and F all have the same distance and sequence.

• With recycling facility at A the best route:A – F – E – B – D – C – A = 201 miles

• Reverse order = same distance


supply chain sustainability and humanitarian logistics chapter 13 copyright ©2013 pearson...

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