1. Shorter life cycles make timing crucial
Market
Sales
Late Entrant
Obsolete
stock
Time
Less time to make profit
Higher risk of obsolescence

2. Breaking free of the classic service/cost trade-off
Time compression
Service enhancement
Cost reduction

3. The order cycle Customer places order Order entry Order processing
assembly
Order
received
Transport
Source: Stock, J.R and Lambert, D.M., Strategic: Logistics Management, 2nd edition, Irwin, 1987

4. How long is the logistics pipeline?
Cumulative
Lead-Time
(Procurement
to Payment)
Raw Material Stock
Sub-Assembly Stock
Intermediate Stock
Product Assembly
Finished Stock at Central Warehouse
In-Transit
Regional Distribution Centre Stock
Customer Order Cycle (Order-Cash)

5. Which activities add cost and which add value?
Customer
Order
Cycle
Finished
Product
Regional
Stock
In-
Transit
Production
Value-
Added
Time,
Place &
Form
Utility
Raw Material
Stock
Cost-Added
Production, Storage & Transport costs & the Time Cost of Money

6. Value added through time
6.2% of value added time over a 40-weeks supply chain
Buffering against business process and variability at each stage
- no single buffer is unreasonable 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39
Supplier Lead Time
Inbound Material
Primary Conversion
Secondary
Conversion
Packaging
Shipment
Distribution Centre Pick
Distributor
Ship to Customer
10%
20%
30%
40%
50%
60%
70%
80%
Weeks in the Supply Chain
% of Total Cost Added by Logistics Processes

7. Plot of Variety Through the Supply Chain
Variety through time 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 1 10 20
Longest period is spend at the maximum variety level
Greatest flexibility is available when the product is generic
Plot of Variety Through the Supply Chain
Weeks Through the Supply Chain
Number of
Variants

8. Cost-added versus value-added time
Finished
Stock
Regional
Stock
Customer
Delivery
Production
In-
Transit
Value-
adding
time
Time,
place &
form
utility
Raw Material
Stock
Cost-adding time
Production, storage & transport costs & the time cost of money

9. Reducing non-value-adding time improves service and reduces cost
Finished
Stock
Regional
Stock
Customer
Delivery
In-
Transit
Raw Material
Stock
Value-
adding
time
Production
Regional
Stock
In-
Transit
Customer
Delivery
Finished
Stock
Production
Cost-adding time
Raw Material
Stock

10. Supply chain mapping - an example
Commodity
Market
End User
(20)
(10)
(5)
(15)
Spinning (15)
Knitting (10)
Dyeing &
Finishing (7)
(2)
Sewing (18)
Fibre
Yarn finished
goods store
Yarn store
Grey stock
Finished
fabric
Raw
material
store
Cut work
buffer
goods
warehouse
Distribution
centre
Store
Spinning
Fabric Supplier
Underwear Manufacturer
Retailer
Length 60 Days
Volume 175 Days
Component
cutting (5)