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Logistics ManagementLSM 730

Dr. Khurrum S. Mughal

Lecture 30

Agility, A New Logistics Leader

Meeting the Challenges of Global Trade

Efficient Supply Chain Services and Introduction of Agility Logistics

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Receiving

•Schedule Carrier•Unload Vehicle•Inspect Damages•Compare to ITS

Put-away

•Identify Product•Identify Location•Move Product•Update WMS

Storage

•Equipment – MHE•Stock Location

Order Picking

•SO – Pick List•Proceed to staging area

Shipping

•Schedule Delivery•Load vehicle•Check commodity•WMS Update

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Warehouse Management System (WMS)

•Why use a dedicated WMS? Reduced investment

Systems support Software development

More detailed inventory visibility Not only is it in the facility, but is it available Improve Customer service

Shorter Cycle Time of Orders Better utilization of resources Increase Productivity

Inventory reduction Lower inventory cost Better utilization of Space

Increases accuracy of Orders

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Agility Warehouse Management Solution

Customer Portal

Suppliers Agility Advanced Warehouse Operations Customers

Task Management

Agility Integration

Platform

Electronic Interchange Data

Orders

Confirmed Orders

Shipment Notification

Advance Shipping

Notice’s and Receipts

Agility Integration

Platform

Master Data

Inventory Position

Distributor Shipment

Notification Inventory Control

Receiving Putaway

LoadingOrder Mgt

Picking

Replenishment

Crossdock

Flowthru

Labor Management

Key Performance Indicators

Quality Checking

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up down

48.0 in. x 24.0 in.

Warehouse Management Standard Process

LoadingShipping

Put-Away Stock

Value Add Processing

Receiving

Supervision

Inventory & Order Visibility

Picking

Packing

Cross Dock

Lane assignment

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Agility WMS Functionality Overview•Receiving

– Real time RF or paper based– Critical data validation

•Putaway – System directed or assisted putaway– Configurable strategies to optimize storage

and asset utilization– Configurable generation of putaway tasks

•Inventory control – Inventory ownership and item attribute tracking– Advanced container tracking

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Agility WMS Functionality Overview

•Directed task management– Automatic generation and dispatching of tasks– Task Interleaving

•Order management– Configurable allocation strategies

•Replenishment– Multiple replenishment options– Configurable replenishment strategies– Automated replenishment task generation and dispatch

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Agility WMS Functionality Overview

•Picking and packing– Automated picking and pack task generation and dispatch– Discrete, cluster, batch, and zone picking– Outbound container ID generation and tracking– RF and label based picking – Supports piece, case, and pallet pick

•Shipping– RF loading– Shipment loading management– Shipment consolidation– Carrier manifesting– Shipping documentation and

compliance labeling

The Agility Advantage

Agility in Pakistan

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Agility Pakistan Background

2001

2003

2004

2006

Geo-Logistics Corporation made its direct investment & launched Geo-Logistics Pakistan

Expansion of Geo-Logistics network in 6 major cities

Commenced operations as an agent of Geo-Logistics Corporation.

2007

2005 PWC Logistics acquired Geo-Logistics Corporation worldwide

2006

Re-branding as Agility Logistics

Launch of Road Freight, Warehousing services & network expansion to 18 major cities

2008

Launch of Fleet Management

Expansion of network to 21 major cities in Pakistan

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Agility in Pakistan

21 Locations, Headcount: 680 &

Warehouses at all major cities

KARACHI

ISLAMABAD

LAHORE

Sialkot

Faisalabad

Gujranwala

Bahawalpur

Peshawar

Abbottabad

SahiwalMultanQuetta

Hyderabad

Sukkur

Sargodha

Head Office

Branch Office

Regional Office

Kohat

Mardan

D.I.Khan

Torkham

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Agility in Pakistan - Comprehensive Suite of Services

FreightManagement

Contract Logistics Management

Project Logistics Fleet Fairs & Events Fleet Management

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Freight Management

Custom Clearance Air Freight Sea Freight

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Warehousing

Karachi Port Qasim & KorangiLahore Kot Lakhpat & SharkpurIslamabad I-10 Faisalabad Sargodha Road

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Processing and Other Services

Fruits and Vegetable Processing Centre, Primary Packaging, Promotional Packaging and Bundling

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Transportation

Full Truck Load Service

Less Then Truck Load Service / Road Freight Services

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Fairs & Events

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Project Logistics, Afghan Transit Trade and Other Services

Case Study

Platform for METRO Pakistan

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– Total Area 21,000 sq-ft

– Covered Area 6,000 sq-ft

– Open Area 15,000 sq-ft

– Freezer Area 400 sq-ft, 5-7C

– Freezer Area 400 sq-ft, 12-15C

– Processing Hall 1000 sq-ft, 18-22C

– Dry Area 500 sq-ft, room temp.

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Agility in Pakistan - F&V Platform

Sharaqpur Warehouse

Temperature Controlled Area

Services Offered

Offering unique fruit & vegetable processing service to a modern retail chain. Receiving goods from the farmers, quality check, weighment, pre-cooling, washing, grading, packaging, labeling, bar coding &and transportation in a temperature controlled vehicle to the retail stores in Lahore & Islamabad.

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Process Flow: Product Arrival, Quality Check, Receiving

Farmers/Consolidators who are supposed to deliver will coordinate time for delivery scheduling

will arrange for pick-up from the farms which require farm pick-up

Accept the product and proceed for Weighment and update WMS

Quality Checks as per Sampling & Visual Inspection

NO

OK

Sampling PlanReject the product and return to supplier with immediate intimation to Metro Team at Platform

Process Flow: Sorting/Grading, Processing, Picking, Packing

Move the Product to

Pre-Cooling Chamber

Washing Area

Storage

Grade & Sort the product

Weighing & Packing of the product as per store requirement, Bar coding and palletize the products in crates with the proper

labeling

Reject the product not meeting the Quality

Pre Cooling & Washing Chart

Processing Area

Process Flow: Documentation, Dispatch, Loading

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Immediate Requirement

Prepare the Delivery Note based on PO and the truck

capacity

Load the vehicle as per the Delivery Note & Handover the

documents to driver

Dispatch the products to Store as per the specified timings

Get the receiving from Store for the dispatched quantity

Stock Maintenance

Store the product in the cold room, ambient or Dry Area as

per requirement

McDonald’s History• McDonald's originally started as a small hamburger stand in

Bernardino, California, owned by Richard and Maurice McDonald in 1945.

• Re-opened in December 1948 as a self-service drive-in restaurant.

• In 1950s Ray Kroc, a Multimixer Salesman, signs a franchise agreement with Richard and Maurice McDonald in the name of McDonald Corporation at Illinois in 1955.

After few years in 1961, Ray purchased the ownership from McDonald brothers.

Today 34,000 McDonald's restaurants serving 69 million customers each day in over 119 countries.

McDonald’s Pakistan History

• McDonald’s Pakistan is part of the Lakson Group of Companies, a leading business house in Pakistan.

• McDonald’s first restaurant opened its door to the people of Pakistan in September 1998 in Lahore and a week later in Karachi .

• 11 in Karachi• 10 in Lahore • 1 in Hyderabad, Faisalabad,, Sialkot, Islamabad & Rawalpindi & Kala

Shah Kaku).

McDonalds‘ Products

McDonald’s Target Market

• McDonald’s wants to attract as many customers as it can. But the main targets of the efforts by McDonald’s are following groups:

• Parent visit McDonald’s to give the children a treat.

• Children want to visit McDonald’s as it is a fun place to eat.

• A business customer visits McDonald’s during the day as service is quick, the food tastes great and can be eaten in the car without affecting a busy work schedule.

• Teenagers are attracted by the Saver Menu which is affordable, and the internet access.

Supply Chain Management in Fast

Food Sector• There are two key components to the fast food industry supply chain;

1. Raw materials are essential to the ultimate product - value added component.

2. Quick, convenient, and quality food.

• The most important aspect of the industry supply chain is that it is driven by the consumer.

• The consumer has what seems to be an endless amount of fast food chains to choose from every day.

• McDonalds' main goal of their marketing is to make the consumer drive that extra two blocks past the competitor to eat at their chain.

McDonald’s Supply Chain Management

• Supply chain is extensive and complex.

• Efficient, safe and quality food at an affordable price.

• Large number of direct suppliers – companies that make or deliver final products to their restaurants.

• Large number of indirect suppliers – companies and farms that grow or process the ingredients that are eventually delivered to their direct suppliers.

McDonald’s E-Procurement

• McDonalds E-Procurement System is basically a main reason for their successful supply chain management.

• It is so efficient that it provides the backbone not only to all the logistics but the whole McDonalds supply chain management.

• E-MAC Digital:

(Internet procurement site designed for McDonald's Corporation's 34,000 franchises)

• E-MAC Digital Company is E-Procurement website which is jointly owned by McDonalds and Accel-KKR Internet Co.

• It is a procurement hub launched in 2001 allow all of McDonald's franchises across the globe to buy everything needed to run their restaurants.

McDonald’s E-Procurement

• In the process of procuring a product, a typical McDonald’s franchise restaurant places an order through E-MAC digital website.

• The order is sent to the suppliers. Suppliers order is processed and managed by the logistics.

• The logistics sends the order of the products to the franchise restaurants. It is the responsibility of the E-MAC and logistics that the products are sent to the restaurant.

• All the above, steps are handled and executed by the E-MAC digital.

McDonald’s E-Procurement

Place Orders Supply Received

E-MAC Digital

Global Franchises

Suppliers Logistics

McDonald’s E-Procurement

Major

SupplierSmall

Suppliers

E-MAC Digital

McDonald’s Logistics

Inbound

logistics

Operations

Outbound

logistics

McDonald’s Logistics INBOUND LOGISTICS

• It is the movement of materials from suppliers and vendors into production processes and storage facilities.

• Based on the demand forecast, Manager orders the Venus Distributors on daily basis.

• Venus Distributors stores all the raw materials, in its own cold stores and delivers only one-day material to the restaurant.

• Venus Pakistan established its dedicated McDonalds Logistics Operations in 1997.

• It also received the DQMP (Distribution, Quality, and Management Process) Certification from McDonalds USA Audit Team.

• Some branch has its own cold storage facility, which is used to store the daily-procured raw material.

McDonald’s Logistics INBOUND LOGISTICS

• There are only two products buns and Cokes, which are sent directly to the restaurants.

• Venus Pakistan has full-fledged facilities to pack locally manufactured products in sachets such as sugar, tomato ketchup.

McDonald’s Logistics• The transportation of McDonald’s has

been completely outsourced and since 80% is in refrigerated truck movement.

• Multi-temperature and single temperature trucks transport the fast food swiftly to the McDonald’s restaurants across the country.

• The company has both cold and dry storage facilities with capability to store products up to -22º C as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state.

• The specially designed trucks maintained the temperature in the storage chamber throughout the journey.

McDonald’s Logistics

COLD CHAIN LOGISTICS• A cold chain is a temperature-controlled supply chain.

• It is used to extend and ensure the shelf life of products such as fresh agricultural produce, processed food.

McDonalds’ entire network supply-chain consists of movement

of goods through a cold chain

An interesting and innovative feature of this cold chain is that the same truck can carry products at different temperatures

ranging from:

• Frozen products at -18C to -25C• Chilled products from 1C-4C • Dry products at ambient temperatures

McDonald’s Operation• Cooking procedure and recipe is documented so that the products

become standardized and customers get the similar taste, quantity and quality to whichever restaurant they go.

• It is the policy of McDonald's to throw away any burger if they remain on heated grill for 15 minutes.

• All the utensils and equipment used in cooking are washed at the closing of restaurant every night, with anti-microbial fluid. Kitchen, floor, washrooms and all other restaurant areas are cleaned after every half an hour.

McDonald’s Logistics OUTBOUND LOGISTICS• Outbound logistics is the process related to the storage and movement

of products from the end of the production line to the users end.

• When customers enter the restaurant, they go to the counter, give their order, which they are served within a single minute.

McDonald’s Distribution

McDonalds Distribution systems McDonald uses three types of distribution

strategy;

• Franchising

• Licensing

• Joint ventures

McDonald’s Forecasting McDonald’s uses qualitative forecasting methods to help aid in predicting

the future growth of the organization;

• Market Research – customer focus and information gathering from customer and employees (through surveys).

• Expert Opinions and judgment – Delphi Technique.