Supply Chain Sustainability and Humanitarian Logistics Chapter 13

Name: Supply Chain Sustainability and Humanitarian Logistics Chapter 13
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Description: Supply Chain Sustainability and Humanitarian Logistics Chapter 13

Supply Chain Sustainability and Humanitarian Logistics Chapter 13
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 13- 01

What is Sustainability?
A characteristic of processes that are meeting humanity’s needs without harming future generations. Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Supply Chains and Sustainability
Social Responsibility Environmental Responsibility Financial Responsibility Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Sup ply Chain Sustainability Efforts
Financial Responsibility Environmental Responsibility --- Reverse Logistics --- Efficiency Social Responsibility --- Disaster Relief Supply Chains --- Ethics Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

What is Humanitarian Logistics?
The 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. Copyright ©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

What is 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. Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Flows in a Closed-Loop Supply Chain
Production process Distribution/ Retailers Customers New service/product development process Repair Direct reuse Returns processor Recycle parts and materials Waste disposal Remanufacture Product information Forward flow Reverse flow Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
Reverse Logistics Financial Implications Fee Deposit fee Take back Trade-in Community programs Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Energy Efficiency Carbon footprint The total amount of greenhouse gasses produced to support operations, usually expressed in equivalent tons of carbon dioxide (CO2) Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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

Four-City Traveling Salesman Problem
90 Central Hub 100 130 85 80 B C 120 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

The distance between any two cities in miles is given below:
Example 13.1 The distance between any two cities in miles is given below: From/To Atlanta Charleston Charlotte Columbia Knoxville Lexington Raleigh 319 244 225 214 375 435 209 116 373 540 279 93 231 398 169 264 430 170 351 498 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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

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: = 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. Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Example 13.1 Step 5 - Compute the total distance traveled along the selected route Using Nearest Neighbor Atlanta Knoxville Lexington Charlotte Columbia Charleston Raleigh Total distance starting with Atlanta = 1,705 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Example 13.1 Use the Nearest Neighbor heuristic again to see if a better solution exists: Charleston – Columbia – Charlotte – Raleigh – Knoxville – Lexington – Atlanta – Charleston = 1,593 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Example 13.1 Charlotte – Columbia – Charleston – Raleigh –
Knoxville – Lexington – Atlanta – Charlotte = 1628 miles Columbia – Charlotte – Raleigh – Charleston – Atlanta – Knoxville – Lexington - Columbia = 1674 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Example 13.1 Knoxville – Lexington – Atlanta – Columbia –
Charlotte – Raleigh – Charleston – Knoxville = 1684 miles Lexington – Knoxville – Atlanta – Columbia – Charlotte – Raleigh – Charleston – Lexington = 1690 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Example 13.1 Raleigh – Charlotte – Columbia – Charleston –
Atlanta – Knoxville – Lexington – Raleigh = 1579 miles Of the 7 routes , the best one starts with Raleigh for a travel distance of 1579 miles. Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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 - 15 30 10 20 12 22 25 5 26 18 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

Application 13.1 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: = 15 miles. Repeat the procedure until all cities have been removed from the unvisited city set. Connect the last city to Monroe to complete the route. Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Application 13.1 Compute the total distance traveled along the selected route. The route using the nearest neighbor heuristic is: Monroe – Dover – Concord – Apex – Oxford - Monroe = = 72 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Application 13.1 Apex – Concord - Dover – Monroe - Oxford – Apex
= = 72 miles Concord – Dover – Monroe – Apex – Oxford – Concord = = 81 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Application 13.1 Dover – Concord – Apex – Monroe – Oxford – Dover = = 70 miles Oxford – Dover – Concord – Apex – Monroe – Oxford = = 70 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

Calculating Break-Even weight
To determine the break-even weight between two adjacent weight breaks we define the following variables: x = break-even weight A = lower weight bracket B = next highest weight bracket C = freight rate relative to A D = freight rate relative to B Break-even weight: x = (BD)/C Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Weight Breaks and Freight Class ($/cwt)
< 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 26.24 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 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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? Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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) = or 3,814 pounds **The shipment qualifies for the lower freight rate** Total weekly shipping cost (48) * (30.89) = $1,482.72 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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) = or 3,813 pounds **The shipment qualifies for the lower freight rate** Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

Application 13.2 At 3 pallets or 150 pieces Shipping Weight (150) * (25) = 3,750 pounds Break-even weight (Freight Class = 92.5) (50) * (28.64) / (37.56) = or 3,813 pounds **The shipment does NOT qualify for the lower freight rate** Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Application 13.2 At 3 pallets or 150 pieces Total shipping cost (37.5) * (37.56) = $1,408.50 The per-unit shipping charge $ /150 $9.39 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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) = or 13,298 pounds **The shipment qualifies for the lower freight rate** Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Application 13.2 At 13 pallets or 650 pieces Total shipping cost (162.5) * (18.87) = $3,066.38 The per-unit shipping charge $3,066.38/650 $4.72 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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

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

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

Supply Chain Ethics Buyer-Supplier Relationships Identifying ethical and unethical work practices Facility Location Inventory Management Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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 Systems Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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

The distance between any two sites in miles is given below
Solved Problem 1 The distance between any two sites in miles is given below From/To A B C D E F - 25 50 48 41 60 35 22 23 43 47 65 24 40 21 Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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 miles From Site D proceed to site E 24 miles From Site E proceed to site F 21 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

Solved Problem 1 Compute the total distance traveled along the selected route Using Nearest Neighbor A B D E F C Total Distance starting at site A = 207 miles Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall

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

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