Transcript MARKLOG

LABORATORIO DE SIMULADORES EN
ADMINISTRACION Y GERENCIA
MARKLOG
Michelsen
Consulting
MARKLOG
B2B Marketing,
Business Logistics
Content
• Simulates the logistics of a company that sells an vital ingredient
to another manfufacturing enterprise in the international market.
• Participants become Directors of International Marketing with a
primary responsability for the level of service.
•Considers the impact of several different logistics appro0ahces
over then enterprise as a whole.
• Decision making evaluates traditional factors such as cost and
speed of delivery of several modes of transport, inventory rotation,
as well as the impact on total profits.
Scenario
•MARKLOG simulates B2B international markets.
•Product: “Carmin” an Organic Textile dye made in a mountanious
country such as México, Ecuador, Colombia, Perú, Chile,
Argentina, España which compites with chemicall dyes such as
aniline.
• The largest market for dye is the brasilian market.
•- Decision making horizon is 4 weeks which imposes a medium
term planning view.
MARKLOG
M EXICO
BOLIVIA
CHILE
COLOMBIA
ECUADOR
MEXICO
PERU
PERU
BRASIL
BOL IVIA
The “cochinilla”, a
very red small insect
resident in cacti.
°EASILY ATTRACTS HUMIDITY,
IS VERY SOLUBLE AND QUITE
EDIBLE.
°CHEMICAL PRODUCTS:
* ANILINE
° ORDERS
° INVENTORY
° PROGRAMED SHIPMENTS
°NOT ENOUGH HISTORICAL
DATA
° THERE ARE FORECASTS OF
TEXTILE PRODUCTION AND
ECONOMIC GROWTH
° IT WILL BE NECESSARY TO
DEVELOP FORECASTING
MODELS
M EXICO
AIR CARGO
BRASIL
LAND FREIGHT
AGENTS AND RAILROAD LINES
BOLIVIA
MARITIME
FREIGHT
– Derived from textile production, shipments
of aniline, and the index of economic
growth .
– Base Week1 = 100
– Selected scenario: optimist or pesimist?
Escenificación Organizacional
•Participants have profit responsibility as they are accountable for
the cost of capital tied in inventories or in transit
• They will be assessed at the end of the simulation in terms of
accumulated weekly profits.
•Control of inventory levels, unit or block purchases of space in
transport modes
• Decisions affected by the implicit and explicit costs of transport
in terms of modern logistics:
• Delivery times are very variable.
•Shipments can be lost or delayed.
•Containers can and do fall in heavy seas.
•Sales are variable and difficult to predict.
•Customers value high level of service
THE IMPERFECT WORLD OF LOGISTICS
JUST-IN-TIME POLICIES MAY NOT WORK IN AN
IMPERFECT WORLD
The MARKLOG world
• International Marketing and Logístics in an export oriented firm
• Product: natural organic dye competing with a checmical dye.
Production cost $ 0.60, estándar price $ 1.00 per kilo
• Main demand: brasilian textile market.
• Internacional transport: air, road, railroad, maritime, coop.
• Service quality is a key influence in determining market share.
• Private and public warehousing is available.
• Risk involving delivery and demand.
•First decision due for weeks 1 to 4 based on results for last years weeks
49 to 52.
Decisions covered
Evaluating alternative distribution estrategies.
2. Development of an optimal inventory policy in the plant
and in the market including maximum, minimum and safety
levels under conditions of uncertainty
3. Using economic and industrial data to produce forecasts
in order to establish inventory levels.
4. Establishing implicit and explicit logistic costs and the
opportunity cost of capital tied up in inventory and their
impact in profits and service quality.
5. Purchasing blocked or unblocked transport modes.
6. Choice of shipping policies considering the speed and
cost of transport.
1.
Scheduled or Normal arrival times in weeks and range of
actual arrival times
Mode
Week of disatch: Arrival programed for:
Weeks in which
shipment could
arrive:
Air
1
1
1, 2
Truck
1
2
1, 2, 3
Rail
1
3
2, 3, 4, 5
Agent
1
3
2, 3, 4, 5
Coop
1
4
3, 4, 5, 6
Sea
1
5
3, 4, 5, 6, 7
Air is fastest but even this mode can be late. Maritime transport is slower
although occassionally shipments can arrive early due to strong currents.
Freight tariff in cents by kilo
Air
Truck
Rail
Agente
Coop.
Sea
Basic rate
20
11
8
7
7
2
Incentive rate
18
8
5
6
4
1.5
Incentive Minimum (k)
1000
30000
40000
40000
40000
100000
Break point (k)
900
21818
25000
34286
22857
75000
Minim shipment (k)
10
100
100
100
100
500
Packing costs
0.5
1
1.5
1.5
1.5
2
Tariffs indicate that the fastest mode is the most expensive and the slowest is the
cheapest.
….If you ship 950 kilos by air, you would be charged for 1000 kilos at the
incentive rate of 18 cents or $ 180 and not for 950 kilos at 2 cents or $ 190. This
is because the break point is 900 kilos.
Air cargo tariffs
Amount of blocked space
Tarifa per kilo
Weekly fixed charge
10,000
$ 0.15
$ 1,500
20,000
0.14
2,800
30,000
0.13
3,900
40,000
0.12
4,800
50,000
0.11
5,500
60,000
0.10
6,000
70,000
0.09
6,300
80,000 and up
0.08
6,400
AEROFLETES LATINOS, the all-cargo airline, also offers a “blocked
space” yearly contract. Under this arrangement a shipper contracts for a
fixed amount of space every week. The contract rate varies with the amount
of space the shipper contracts to use each week..
1
MARKLOG DECISION SHEET
2
3
4
1
2
3
4
•Last digit must represent the week of
shipping becoming the B/L
When data has been
registered click over Send
EXAMPLE OF A TEAM´S APPROACH
Objectives and strategies must be defined, allocating
areas of responsibility to team members who have to
meet and proceed to decide and register data
STRATEGIES
OBJEJTIVES
RESPONSIBILITIES
POSSIBLE OBJECTIVES
SERVICE
QUALITY
CONTROLING
INVENTORY
CUSTOMER
SATISFACTION
MAXIMISING
INCOME
MINIMISING
COSTS
MAIN OBJECTIVES

Controlling total costs and reducing it.

Analising corrent demand for Carmin and future
forecasts.

Prevent the substitution of Aniline
EXAMPLE OF
OBJECTIVES

Have stock available for clients all year round.

Improve 10 % return over sales

Becoming number 1 in sales of Carmin in Brasil.
EXAMPLE II

Due to the high costs of blocking air space and
blocking warehouse space, our objective is to reduce
total costs and become profitable at the end of the
year.
Example of General Objectives
Manage correctly distribution variables
in order to establish the correct
strategy which will produce high
returns.
Example of specific objectives
•
Achieve the highest returns
•
Calculate demand considering a safety margin sufficient to
accomodate occasional orders (29%) no greater than 80,000 kilos in
warehousing capacity.
•
Deliver the product in time and at the lowest cost .
•
Give a high quality service to consolidate the image of the company.
Example of corporate policies
•
Minimise risks diversifying transportation modes
•
Reduce freight costs
EXAMPLE OF FORECASTING
100000
80000
60000
40000
20000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
FORECAST
Proy ect
ada
Real
MANAGEMENT REPORTS
FOR WEEK 49 TO 52