Supply Chain Optimization through Segmentation and Analytics

246 Pages·2014·2.54 MB·English

by  Gerhard J. Plenert

Business and Management P
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We live in a world where we try to solve similar problems in structurally the e
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same way. But they simply are not optimally solved all the same. Supply Chain t
Supply Chain Optimization
Optimization through Segmentation and Analytics addresses the issue of
optimizing the planning and scheduling process and asks the question, “Is there S
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a ‘one size fits all’ solution for planning and scheduling?” p through Segmentation
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The answer is a resounding, “No!” We migrated through EOQ, MRP, JIT, and y
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TOC, each time hoping to find that one size fits all. Each of these systems looked C
at a facility as if it had one focused problem, either optimizing work schedules, h
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materials movement, or machine utilization. But what if you have two, or
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possibly even all three of these problems? Then what system do you use? Or

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what if your critical resource is not labor, materials, or machinery? Then which
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planning and scheduling solution do you utilize?
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This book introduces the concept of segmentation as the planning and scheduling
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tool that facilitates the optimization of the supply chain. If you have one type of z
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problem in a part of your supply chain, you use the solution that appropriately t
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focuses on that problem. If you have a different problem in a different part of o
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your supply chain, then you use a different and appropriate tool for that part of

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the supply chain, and so forth. Or, if your product is in different stages of its life h
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cycle, it probably requires a different set of tools for each stage of that life cycle.
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In addition, the book discusses how to integrate planning and scheduling
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tools using a segmentation approach that results in a world-class supply chain
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environment. It clearly details the power of segmentation and offers a systematic e
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plan for implementation in the supply chain. To facilitate this, the author covers
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the components of an integrated segmentation policy, including the analytics
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elements and the measures that define segmentation success. He helps you build n
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a strategy and methodology for introducing segmentation principles that allow a
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you to break free from “one size fits all” thinking. i
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a Gerhard J. Plenert
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6000 Broken Sound Parkway, NW
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Suite 300, Boca Raton, FL 33487 ISBN: 978-1-4665-8476-1 i
711 Third Avenue 90000 c
New York, NY 10017 s
an informa business
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w w w. c r c p r e s s . c o m
K19057 cvr mech.indd 1 3/4/14 10:00 AM
Supply Chain Optimization
through Segmentation
and Analytics

Supply Chain Optimization
through Segmentation
and Analytics
Gerhard J. Plenert
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2014 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
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Version Date: 20131106
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To the love of my life—
Renee Sangray Plenert
Who segments my life optimally!
And to my kids, their spouses, and of course the grandkids—
Heidi, Dawn, Gregory and Debby, Gerick and Nicole,
Joshua and Amy, Natasha and Mark, Zackary and Karli,
Chelsey, Lucas, Boston, Evan, Lincoln, Livy,
Savannah, Boston (yes, there really are two with
that name), Beckham, Gerick, Jr., and Gage
Who like to analyze my life!

Contents
Preface ...................................................................................xi
Acknowledgments.............................................................xiii
Introduction .........................................................................xv
Section 1 Segmentation
Chapter 1: What Is Segmentation and How Does
It Work? ...................................................................................1
What Is Segmentation?
Mail-Order Pharmacy
Aircraft Engine Manufacturer
Retail Segmentation
Analytics
Supply Chain Segmentation (SCS)
References
Chapter 2: The Supply Chain ............................................15
Defining the Supply Chain
A Little History
What Is Supply Chain Management (SCM)?
A Model
Supply Chain Management Integration
Cycle Time and Response Time as the Key Strategic Metric
The Global Supply Chain
Information Integration
Risk Management
Logistics Management
Summary
References
Chapter 3: Performance Measures ..................................41
The Role and Purpose of Measures
Some Examples of Supply Chain Improvements
The Role and Purpose of Control Systems
What Is the Best Measure for Your Organization?
Summary
References
vii
viii Contents
Chapter 4: Analytics and SCS ...........................................51
Analytics Defined
Level of Analytics and Business Intelligence (BI)
How Analytics Is Used
Analytics Strategy
Analytics and BI Applications
Analytics and Supply Chain Segmentation (SCS)
Applied Analytics Case Example
Summary
References
Section 2 Segmentation Applied
Chapter 5: An Applied Example of SCS—
The Analysis Process .........................................................71
Why SCS?
The Structure of SCS
Creating an Example of SCS
The Companies
Goals
Building Out the SCS Approach
Returning to Our Three Case Example Companies
Driving toward SCS Execution
Cleanse and Analyze Data
Summary
Chapter 6: An Applied Example of SCS—
The Build Process .............................................................113
Designing the Segmentation Logic Map
Define and Map Planning and Scheduling
Strategies for Each Segment
Build/Run/Test/Validate the Developed Segmentation Structure
Summary
Chapter 7: SCS Execution ................................................145
Chapter 8: SCS in Your Organization ...........................151
Analyze
Build
Execute
Summary
Chapter 9: SCS Key Concepts .........................................167
SCS Planning and Scheduling Key Concepts
Touch
ERP Integration
Contents ix
Life of a Product
Forecast Analysis
Statistical Safety Stock (SSS)
Optimal Service Level (OSL)
Coefficient of Variation (CoV)
Reorder Point Cycle (ROP)
Economic Order Quantity (EOQ)
Optimal Inventory Level (OIL)
Min/Max (MM) Planning
Build to Order (BTO)/Manufacture to Order (MTO) Planning
End of Life (EOL) Planning
Summary
Section 3 Segmentation effects
Chapter 10: Change Management .................................189
Quality Functional Deployment (QFD)
Total Quality Management (TQM)
Process Re-Engineering
Concept Management
Lean
Six Sigma
Summary
Reference
Chapter 11: SCS Is Wonderful .........................................215
Summary