How Can Design for Logistic Concepts Be Used to Control Logistic Cost and Make the Supply Chain More Efficient?

983 Words Jul 11th, 2013 4 Pages
1. How can Design for logistic concepts be used to control logistic cost and make the supply chain more efficient?
Design for logistics is a series of concepts in the field of supply chain management involving product and design approaches that help to control logistics costs and increase customer service levels. The concepts include the three key components, Economic packaging and transportation, Concurrent and parallel processing, and Standardization.
Economic packaging and transportation
EPT is the most obvious involved designing products so that they can be efficiently packed and stored. When transport systems are efficient, they provide economic and social opportunities and benefits that result in positive multipliers effects
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This will reduce inventory in the different countries and increase supplies in the other. Another way to DLC can help is to use cross-docking
Using design for logistic will reduce shipping and inventory cost because handling cost, space per product usually decrease; revenue per square foot usually increase.
In Concurrent and parallel Processing HP must focus on modifying the manufacturing process; in essence, modification of the product design. It helps to combine stems in a manufacturing process, thus reducing lead time.
In Standardization the aggregation of demand information can help them to better forecast the need of the continent instead of the need of a country within that continent. Standardization will reduce required parts inventory due to risk pooling and reduce parts cost due to economies of scales.
2. What is delayed differentiation and how can Hewlett Packard use delayed differentiation to address the problems described in the case? How can the advantages of delayed differentiation be quantified?
Delayed differentiation or Postponement is a concept in supply chain management where the manufacturing process starts by shipping a generic product as far down the supply chain before variety (differentiation) is added. Since aggregated forecast are more accurate, instead of building a complete product based on forecast HP should build based on orders (push-pull strategy) and actual assembly specific product that is ordered. For example, the…

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