What changes did Shavers make to integrate its European logistics? Integrated logistics is defined as the the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies and information necessary to meet those needs and wants; optimizing the goods-or-service-producing a network to fulfill customer requests; and utilizing the network to fulfill customer request in a timely way. ” Integrated logistics is a service-oriented process.
It incorporates actions that help move the product from the raw material source to the final customer. In his case for shavers to have a global market they would require to have greater degree of centralization, coordination and planning. They also had to shift fundamental decision points from local level to the European level. Areas which needed changes/ of strategic importance were; l. Finished goods and work in progress inventories. II. Distribution operations and location.
Ill. Supply chain strategy. IV. Development of forecasting and requirement planning systems. V. Purchasing. To satisfy customer demand they needed modern planning and control systems which had effective scheduling, manufacturing and distribution planning for each reduce on offer. The changes started in the following areas in that order; Finished Goods Inventory Centralized responsibility for inventory would require the establishment of European planning function . I. E. O obtain sales forecasts from each local market, monitor finished goods stock levels at each distribution center and develop production plans and stock movement schedules to drive the flow of finished goods to Docs to ensure a high service level. 0 Distribution Network It required to best configuration of Docs and provide input to the proposed business I. S . The distribution centers had to be reduced from 13 to 8 so as they could operate efficiently. There was also an introduction of a third party operated depot at Belgium and Netherlands because of promotional demands.
The growth of the third party provider industry has ensured that there is no shortage of bidders willing and able to provide a very competitive service in DC operations. 0 Planning and Execution systems To achieve this integration the group specified, purchased and implemented the necessary enterprise requirement planning and web based system to give a common system across the whole Europe. A European wide forecasting system was installed to forecast overall European demand constantly. They had to change to centralized planning and have shorter order processing time.
Shavers therefore purchased an Order forecasting Demand management Master production scheduling Materials requirements planning Purchasing Factory scheduling and inventory management Distribution requirements planning Delivery recording and invoicing The ERP provided the following/ made the following changes; Provide a real time view of the shaver’s European business from customer orders to warehouse stocks, DC stocks to factory. Ђ Embodying weekly production planning Once a week the sales forecast from each country will be updated and transmitted to the production and distribution planning office. Ђ At the same time, the opportunity was taken to centralize capacity planning and master scheduling at the European headquarters. 2. What are the pros and cones of centralized distribution for a fast moving consumer goods company? Pros; a. Provides a better/good customer service and performance due to streamlined processing procedures, better distribution networks which are in time, efficient ,effective and faster processing of orders. B. Reduces the operation costs u to introduction of technological systems which substitute human labor, reduction in distribution centers. C.
There is increased service level by employees because they are trained to use the systems which are easier, faster, and simple and produce more quality work. D. The administration is well defined having well established points of reporting. E. It creates excellent career opportunities for some managers due to the gradual movement towards third party operation from warehousing management skills to those of negotiation and management control. F. Centralization of power makes control of planning easier since it’s from one point of rower, easier