HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL MASTER IN MANAGEMENT PROGRAM (MMVCFB 6) PHAM NHU HIEN APPLYING LOGISTICS AND SUPPLY CHAIN MANAGEMENT MODEL TO WHOLESALE SYSTEM IN HO CHI MINH CITY Major: Management Master in Management Thesis Advisor: Dr Ta Thi My Linh Ho Chi Minh City 2007 UNDERTAKING STATEMENT: I hereby undertake that this is my own research All data and results stated in the thesis are completely true Pham Nhu Hien ACKNOWLEGEMENT I would like to express my deep gratitude and great appreciation to Dr Ta Thi My Linh, my thesis advisor for her valuable guidance, encouragement, support, and sharing knowledge throughout my thesis I would also like to express my deep gratitude to Professors of Universiteù Libre de Bruxelles, Solvay Business School and Ho Chi Minh City Open University for providing knowledge and giving valuable experience during my study I would also like to take this opportunity to give my special thanks to my family, colleagues and friends for their continuing support PREFACE Rational of the thesis Logistics and SCM as a whole, is a fairly new management tool and one, which more and more companies are finding useful in giving them a competitive edge in business In today economy, optimization is the key word in any business success story and Logistics and SCM is one of the major applications in the business world which can address many of the challenges faced by an organization As the economy in Vietnam changes and as competition becomes more global, it is no longer company vs company operating in a domestic business environment but the Supply Chain vs Supply Chain The goal of any progressive company is to combine the many Logistics pipelines from manufacturer to final consumer, which include value-added processes that deliver innovative, high-quality, low-cost products on time with greater responsiveness that ever before and wholesale system is not exceptionable Wholesale system plays a key function in smoothly moving the flow of goods, cash and information within the whole distribution system This realization has led wholesale companies to look beyond their boundaries to evaluate how the resources of their suppliers and customers can be utilized to create the exceptional value demanded by customers In theory, Supply Chain integration allows the organization to focus on doing exceptionally well a few things for which it has unique skills and advantages Non-core activities are then shifted to other channel members that possess superior capabilities in those areas When appropriate, close relationship are formed to ensure outstanding performance levels These allied teams of wholesale companies then form an integrated Supply Chain, which is able to compete against other Supply Chain However, in reality, approaches to SCM vary substantially from organization to organization and even from manger to manger within the same company Indeed, few companies have adopted a formal definition of SCM Even fewer have carefully mapped out their Supply Chain so that they know who their suppliers’ supplier or customers’ customers really are and are able to find a way to apply successfully the Logistics and SCM to their organization Therefore, the author chose the thesis: “Applying Logistics and SCM model to wholesale system in HCMC” Objective of the research - To make clear issues belong to literature review of Logistics, Supply Chain, SCM, wholesale - To adapt theory of Logistics and SCM to wholesale system in HCMC to improve the management capacity of wholesale companies in the movement of goods, the movement of cash and the movement of information Scope and Limitation of the study - Researching about the current applying Logistics and SCM situation of wholesale trading and distributing companies in consumer goods field in HCMC - Researching and giving recommendation to improve the operation activities of wholesale system and suggest a suitable Logistics and SCM model Research Methodology The research is carried out basing on three main steps: First of all, secondary data is gathered and processed to provide a literature review of current theory of Logistics, SCM, Wholesale system The next step is to investigate the current situations of wholesale system in HCMC by collecting reports from Government’s agency and through a qualitative research and through a questionnaire survey to analysis the current appliance situation of Logistics and SCM to wholesale companies The third step is to give out some important recommendations to improve current operational activities of wholesale system and suggest a suitable Logistics and SCM model Structure of the thesis Chapter One: Literature review of Logistics, SCM and wholesale system Chapter Two: The reality overview of the appliance of Logistics and SCM to wholesale system in HCMC Chapter Three: Orientation for the appliance of Logistics and SCM to the wholesale system in HCMC TABLE OF CONTENT Title page Undertaking Statement Acknowledgement Preface Table of content List of abbreviation List of figure List of table Chapter 1: Literature review of Logistics, Supply Chain Management, Wholesale system 1.1 General literature review of Logistics and Supply Chain Management 1.1.1 Logistics – a part of supply chain 1.1.1.1 Definition of Logistics 1.1.1.2 Classification of Logistics 1.1.1.3 Logistics Management 1.1.2 Definition of SCM .11 1.1.2.1 Definition of supply chain and SCM 11 1.1.2.2 General operation of SCM 13 1.2 Function of Logistics and SCM 15 1.2.1 Strategic Function 16 1.2.2 Tactical function 16 1.2.3 Operational function 17 1.3 Objectives of Logistics and SCM 18 1.3.1 Reducing transportation and Logistics cots to minimum level 18 1.3.2 Reducing the investing capital in transportation system 18 1.3.3 Improving the customer service 18 1.4 Literature of wholesale distribution system .19 1.4.1 Definition of Wholesale 19 1.4.1.1 Definition 19 1.4.1.2 Type of wholesale 20 1.4.1.3 Wholesale Management 21 1.4.2 Organization Structure and Operational Process of wholesale company 23 1.4.2.1 Some popular organization structure 23 1.4.2.2 Operational Process 25 1.4.3 Function of wholesale in economy 27 1.4.3.1 Being a key chain in the whole distribution system of the economy 27 1.4.3.2 Increasing value added services which help to increase revenue 28 1.4.3.3 Ensuring the supply source for the market 29 1.4.4 The importance of the appliance of Logistics and SCM model to wholesale system 29 1.4.4.1 Ensuring the non-stop flow of commodity .30 1.4.4.2 Ensuring the movement of information flow 31 1.4.4.3 Ensuring the movement of cash flow 31 Chapter Two: The reality overview of the appliance of Logistics and SCM to wholesale system in HCMC 33 2.1 Overview of wholesale system in HCMC 33 2.1.1 Business result of wholesale system 33 2.1.2 Quantity and current situation of wholesale system in HCMC 36 2.2 Analysis of the current appliance of Logistics and SCM model of wholesale system in HCMC .39 2.2.1 Micro Analysis 39 2.2.1.1 Major Competence 41 2.2.1.2 Planning .43 2.2.1.3 Implementation 45 2.2.1.4 Monitoring and Adjustment 48 2.2.1 Macro analysis 51 Chapter Three: Orientation and recommendations to apply Logistics and SCM model to wholesale system in HCMC 55 3.1 The foundation to apply Logistics and SCM model to wholesale system in HCMC 55 3.1.1 Industrial view 55 3.1.2 Enterprise view 55 3.2 Orientation for the appliance of Logistics and SCM to the wholesale system in HCMC 57 3.3 Recommendations to build up a suitable Logistics and SCM model 58 3.3.1Recommendations to improve the current situation of wholesale system 58 3.3.1.1 Recommendations for enterprise 59 3.3.1.2 Recommendations for State .61 3.3.2 Recommendations to build up a suitable Logistics and SCM model .62 3.3.2.1 Model recommendation: create a vertical alliance – Integrated Logistics and SCM 62 3.3.2.2 Content of the model 63 3.3.2.3 Barriers to the outsourcing model .66 3.3.2.4 Benefits of the Model 68 3.3.2.5 Some remarkable for an successful outsourcing 69 Conclusion…………………………………………………………………………………………………………………………………………… 73 Recommendation for further studies………………………………………………………………………………………….75 Bibliography Appendix LIST OF ABBREVIATION 3PL Third Party Logistics ADB Asian Development Bank CLM Council of Logistic Management EDI Electronic Date Interchange ERP Enterprise Resource Planning GDP Gross Domestic Product GSO General Statistics Office HCMC Ho Chi Minh City IMF International Monetary Fund IT Information Technology JIT Just-In-Time KPI Key Performance Indicator MPI Ministry of Planning and Investment P.O Purchasing Order SCM Supply Chain Management VCCI Vietnam Chamber of Commerce and Industry WB World Bank WMI Warehouse Management Interchange WMS Warehouse Management System WTO World Trade Organization 86 54 3 2.4 2 2 2 2.4 4 55 3 4.2 4 2 4 4 4 5 56 5 3.6 3.4 4 4 4 3.4 4 57 3.9 2 3.8 1 4 2 2 3.6 4 58 4.3 2 3.6 1 4 2 4 4 3 59 4 3.4 3.4 5 4 4 4 4 3.8 4 60 4 3.4 3 4 2 5 3.6 4 61 3.1 2 3.6 1 4 2 4 4 3.6 4 62 3 3.4 5 2 2 3.6 3 63 4 4.6 4.6 4 4 4 2 4.8 4 64 3 3.6 3.6 4 2 4 4 3.8 5 65 4 3.6 3.6 5 4 2 2 4.2 4 66 3 3.9 3.6 4 2 4 4 4 67 3 3.9 4.2 4 2 4 4 3.8 4 68 3 2.6 4 2 3 2 3.4 4 69 3 3.1 2.8 5 2 4 4 3.2 3 70 3 3.3 2.8 4 2 2 5 3.2 4 71 4 4.3 3.4 4 4 3 4 4 4.2 3 72 3 3.6 3.6 4 2 2 2 3.6 73 3 3.6 3.4 4 2 4 4 3 74 4.1 2 3.8 1 2 2 2 3.8 3 75 5 3.9 4 4 4 4 4.2 4 76 3 1.8 2 2 2 2 2.6 5 77 3 2.9 3.2 4 4 2 4 4 3.4 3 78 2.9 2 1 4 2 2 3.2 4 79 3 3.4 4 2 4 4 3.8 4 80 3 3.6 3.4 2 2 2 2 2 3 81 2 3.8 1 4 2 4 4 4.4 4 82 4 3.4 3.4 4 4 4 2 4.4 4 83 3 3.9 4 4 4 2 4 4 4.2 4 84 3 2.1 5 2 2 2 5 85 4 2 4 2 4 4 4.4 4 86 3 3.5 3.4 2 4 2 2 4.4 4 87 5 4.1 4 4 4 5 4 4 4.2 4 88 4.4 2 1 2 2 2 4.4 4 89 3 3.4 3.8 2 4 2 4 4 3.6 5 90 3 3.2 4 4 2 2 3.8 5 87 91 4 3 3.4 2 4 4 4 4 4 92 4 3 2 4 2 3.2 4 93 3.4 2 3.4 1 2 4 4 4.2 4 94 4 3 3.2 2 4 4 4 4 4 95 3 2.9 3.2 2 4 2 4 4 3.4 5 96 3 3.5 2 3.8 1 3 2 2 5 5 97 3 3.3 3.6 2 2 4 4 3.8 5 98 4.4 2 3.8 1 4 2 4 4 4.8 4 Cont Res pon dent No 25 26 27 28 29 5 5 3.8 3 3.8 3.4 30 Res pon dent No 25 26 27 28 29 39 3.6 3 3 40 4 3 41 3.8 5 5 42 3.2 5 43 30 Res pon dent No 25 26 27 28 29 30 4 77 3 3 3 78 3 3 5 3 79 3.8 3 2 80 3.6 5 3.6 5 81 3.8 3 3 5 44 3.2 3 4 82 3.8 3 3 3.4 2 4 45 3 83 3.6 3 3.6 5 4 46 3.2 5 84 2.4 3 3 5 47 3.4 3 85 5 10 2 48 3.8 5 5 86 3.4 3 11 4.2 3 49 3.8 3 87 4.2 3 5 12 3.8 5 5 50 3 88 4.4 5 13 3 51 2.6 5 89 3.6 3 14 3.4 4 52 2.8 3 3 90 3 3 15 3 3 53 3.4 3 91 3.6 5 4 16 3.8 5 5 54 3 92 2.8 3 17 3.4 4 55 5 5 93 3.4 3 18 4.2 1 4 56 3.4 3 94 3.6 5 4 19 3.2 5 5 57 3.6 5 3 95 3 3 20 3.8 5 4 58 3.8 3 96 3.6 5 21 3 59 3.4 3 97 3.2 3 3 22 3.4 5 5 60 3.4 5 4 98 3 23 3.6 5 5 61 3.8 3 3 24 3.2 3 4 62 3.4 3 25 5 3 63 4.6 5 5 88 26 3.8 5 64 3.4 3 27 3.6 2 4 65 3.4 3 4 28 4.2 5 66 3.6 3 3 29 3.2 5 5 67 4.2 3 30 3.6 3 3 68 2.6 5 31 3.6 5 5 69 3 3 32 3.2 5 4 70 3.4 3 33 3 71 3.8 5 34 2.4 3 72 3.8 3 3 35 5 73 3.6 5 36 3.8 3 4 74 3.8 3 3 37 3 75 3 38 4.4 5 5 76 2.4 5 89 APPENDIX : SAMPLE OF OUTSOURCING CONTRACTS METRO VIETNAM Warehousing and distribution Services Contents Introduction 90 Company Overview Kuehne + Nagel 90 Our Solution Concept 91 Facility, Location and Specification 93 Information Management System 95 Distribution 96 Contract type 97 Performance Tracking and KPI 97 Transition and Integration 99 Transition Management 100 Quotation of Services 100 90 Introduction First and foremost, we thank you for inviting us to participate in METRO VN request for proposal for Warehousing Services, distribution and WMS providing in Vietnam We fully understand the challenge of the project and we are confident that we submit a first proposal, which shall be a good base to continue discussing about the best way to meet your requirements Partnership Global Networks We express our particular interest in the provision of this service to METRO We see a strong fit between METRO and KN based on our established global and local presence, our reach and retail logistics expertise (i) KN is a proven market leader in providing logistics services and global supply chain management It has the: • Experience; • Financial stability; • Worldwide network; • Specialization; • Commitment; to handle METRO Vietnam local logistics needs Flexibility (ii) KN‘s service driven culture is responsive to the changing local markets and the needs in the METRO partnership KN‘s experience globally in many industries and in handling industrial products, consumer durables, electrical appliances, automotives, spare parts, healthcare, Chemicals products, Pharmaceutical products and retail logistics worldwide and in Asia Pacific The last acquisition of KN was ACR Logistics, a company who has a clear focus on the retail industry (iii) Our team is already highly motivated by METRO project, and enjoyed working on this RFP We are looking forward to show you how METRO and KN can have an excellent partnership in business Company Overview Kuehne + Nagel Kuehne + Nagel was founded by August Kuehne and Friedrich Nagel in Bremen on July 1st 1890 Today, Kuehne + Nagel is one of the world’s leading transport and logistics groups With some 40,000 employees at 700 locations in 100 countries, the Kuehne + Nagel 91 Group is one of the world's leading logistics companies Its strong market position lies in the Contract Logistics, Ocean and Airfreight business with a clear focus on providing ITbased Supply Chain Management For more information on Kuehne + Nagel International please visit our web site at www.kn-portal.com Kuehne + Nagel feaA wide range of refined logistics modules, designed to meet the Logistics Services complex demands of international goods traffic: • Strategic network design and material flow optimization; • A network of dedicated and shared warehouse facilities; • Value-added services portfolio, including final assembly, kitting, quality control, etc.; • Tracking & tracing customer order number, including serial number and other specific reference numbers; Standardized measuring of logistics performance using critical success factors / key performance indicators By combining our global expertise in freight forwarding and logistics we are in the unique position to provide integrated planning and execution services for end-to-end solutions • Our Solution Concept Overview The proposed KN operational solution is based on information from the tender documents and our experience from the present KN operation for METRO in Europe Recommendations are based on KN’s vast experience operating distribution facilities servicing manufacturers, distributors and retailers General Assumptions METRO RFQ data and information has been used to develop this proposal In the event METRO provides revised data, KN will modify proposed services to assure that solutions are data driven For the warehouse management system (WMS) we propose the KN WMS CIEL FW Wages are based on present levels for 2006, valid for KN staff in Vietnam area Warehouse processes / Material flow The following chart shows the main process flows and the structural overlapping of the value added services The shown main processes are described more in detail below 92 Inbound Dry Food Non Food Bulk Full Pallets X-Docking Palletizing •Labeling •Repacking •Receiving inspection Picking Full Pallets Packing Parcels Packing Pallets Outbound Receiving & Put-away - After arrival of the truck and verification of the shipment based on the delivery note handed over by the driver the pallets are unloaded - KN will only have full pallets, mixed pallets are received only in extraordinary cases - Check of article number, quantity and outside check on damages - Printing of pallet label indicating part number, quantity, storage location and adding to pallets - Put-away process RF-based, data entry and stock adjustment in system automatically Returns - Returns are checked against the delivery note and according to the reason of the return: o Wrong delivery (article or quantity) o Damaged parts o Other - Returns are checked on damages; unaffected units are returned to stock, other placed in reserved area for detailed analyses by KN Picking - For picking the WMS defines based on ordered volume the split of full pallet picks and single units picks Single units are picked from locations in the bottom level of the rack 93 - The paper-based picking list can be split between several workers according to the size of one order - Full pallets are taken from stock with a reach truck or forklift truck (block storage area) - For single unit pick a standard Euro-pallet is used for the picking tour distanceoptimized through the warehouse using an electrical pallet truck Consolidation and Packing - Full pallets and picked pallets with single units are placed together in the outbound zone - Based on picking documents final check on part number and quantity - Check of charging status of upper level of batteries on pallet - Wrapping of picked pallets - Adding shipping label and delivery note to pallets Facility, Location and Specification SN Factors Locations Specification Our warehouse located at strategic locations that closed to main national traffic network, non constrain accessible, closed to stores in average, easy for supplier…then cost effective locations Hochiminh City: ICD Song Than – about 20kms from HCMC downtown and about 25 kms to current Big C Dong nai Hanoi: Currently our facility located at ICD My Dinh, Tu Liem, Hanoi, just about 02 kms from Big C Thang Long However, in order to expand to sizable DC, we target to set another strategic location at Hung Yen Industrial Zone, about 25kms to Hanoi downtown, very convenient to connect with other Northern commercial hubs (Like: Hai Phong, Quang Ninh, Hai Duong ) Danang: Danang is central city of Vietnam, about 800kms 94 from Hanoi and 1000 kms from HCMC and potential area for Big C store chains We believe METRO could even think about having a small stock in Danang (top 400 SKUs), that could also be used to consolidate flow up and down Vietnam We are able to offer additional operations at Danang upon further discussion Storage Space Building design – General concept 4.1 4.2 4.3 4.4 4.5 We are providing the flexibility of storage space supply by phases At beginning, we build for initial start up phase and all floor surface of next phases that would help to get erected quicker for extension after 1-2years till full scope We could apply the same concept regarding METRO’s potential fresh food activities in the future We shall offer shared storage solution to METRO for the purpose of cost effectiveness of both side upon appropriate scheduling Storage of general stock is racked levels meanwhile floor storage is for cross docking Building to be designed as “fit to its purpose” Building layout is designed up to the specific retail operations standard and compliance Building design – Some technical highlights Finished Floor Building Floor/ Platform level to be 1,300mm above site Level and Clear level Floor load –bearing capacity = 45KN/m2 Ceiling Height Staging Area/ Roof Eaves ceiling height = 6m clear Storage Area ceiling height = 8-10m clear Water-Tightness Adequate Shelter Canopy with 10m projection to be and Weather provided at the loading/unloading bays Protection Adequate Rainwater Gutters, Down-pipes and Storm Drainage System Anti-Termite Soil treatment against termites, ants and insects Protection Heat Insulation and Roofing and external walls to be adequately insulated Ventilation Natural ventilation to internal of warehouse preferred but may need mechanical extractor fans Air-conditioning to offices, ventilations to toilets and other rooms Car Park - and Asphalt finished and to be adequate to take 25kN/m2 for 95 Truck Bays 4.6 Dock-Levelers 4.7 Sewerage and Hygiene 4.8 Electricity - Water Supply 4.9 Telecommunication System 4.10 Security System 4.11 Fire-Protection 4.12 Other matters and future uses the truck bays Car park lots, road-lining and directional arrows markings to be provided Sufficient numbers of truck/container dock-levelers to be provided at the 1.3m high raised platform level Rubberized bumpers at vertical side of raised platform Toilets facilities for up to 120 personnel Pantry & Locker facilities Reliable source of primary stable electricity and water supply Estimated secondary/ Back-up electricity supply to Docklevelers, Basic General Lightings, Security System and IT/ Computer System Provision of High-Bay lightings to storage areas Provide with broadband ADSL connected to respective office and regional servers in Hong kong for data processing and back up solution Adequate of telephone/fax lines with capability for each Warehouse and Office floor All windows, louvers and opening to be fitted with lockable security grilles All doors to be fitted with security lock To meet all local requirements such as provision of fireextinguishers complete with water-storage tank and pumps Heat or smoke detectors, water hydrants and sprinkles system are subject to further development All compliance with local authority requirements, legislative controls, standards, procedures, etc Future uses for other activity such as fresh foods logistics also plan to build Information Management System As described before, we intend to use our own CIEL FW system, already in use in Vietnam (widely in the world) 96 Kuehne + Nagel's Warehouse Management System (Ciel FW) is a technically advanced, software application that enables distribution management to control all movement of merchandise through the warehouse Ciel FW has been successfully implemented worldwide for many customers (HP, Black & Decker, BMW, Thomson Multimedia, Scania…) in various countries (Netherlands, Spain, Germany, UK, Poland, Croatia, South Africa, Arab Emirates, US, Luxemburg…) and successfully implemented in Vietnam operations Designed to be user-friendly – highly configurable and easy to administer system, powerful query capabilities, multiple data-views, built-in security and more Using EDI and RF (radio frequency) technology most of the paper produced during customary warehouse activities will be eliminated without interrupting information flow Technical Architecture Kuehne + Nagel’s WMS runs on the IBM AS/400 range of computers, as part of a fully networked system operating in a global environment This means that a wide range of businesses can be catered for, from the small specialist, to the largest multinational Functionality Kuehne + Nagel’s WMS can cope with all state of the art processes such as: - Receiving Putaway Replenishment Inventory Management Order Management Picking Pack Verification Shipping Cycle Counting / Wall-To-Wall-Count Query and Reporting Web Inventory and Orders A solution of costing “AND IF” with optional costs for optional requirements could be set, once METRO will know further the detail of its requirements Distribution Standard flows and standard distribution routes will allow us to work with specific transportation companies, able to fulfil METRO’s requirements both in terms of speed and quality, as well as in terms of insurance 97 K+N is a non asset based company and therefore does not own our own truck Current partnership contracts are already in place with companies, that are managed upon financial, quality and KPIs respect aspects • Objective Carrier selection and management process • Fixed set of key criteria • On-site auditing • Regular performance review • Measurement of client agreed “success metrics” • Track & Trace via customized shipment reports We are looking at providing T & T visibility via KN login Selection criteria • Asset-based with reliable and clean equipment • Fixed line hauls to destination hubs • Different equipment classes depending on commodities and requirements • Cost • ISO 9000 quality checklist Subcontractor management • Trial shipments • Continuous quality and cost reviews • Quality incentives Contract type Vietnam being a very new market, METRO not having a very mature logistic operation there yet, we propose: - 1st year: open book, cost + of XX% in order to allow our both companies to discover the flow with as few risks as possible Once flows better known, we shall study them, make a proposal of cost per unit and then operate in close books the following years - From year 2: closed books upon unit price Performance Tracking and KPI Within the Contract Logistics organization, elements of Kuehne + Nagel’s quality process include: • • KPI Management The ‘5-UPs’ Customer Satisfaction – The Business Partner Review Process 98 Our process for metrics management starts with clear expectations With each customer, we jointly agree on the five objectives most critical to the success of the customer’s business strategy We call these objectives the “5-UPs.” Our customers’ business objectives literally become our objectives and the barometer against which the success of Kuehne + Nagel contract logistics services are judged The 5-Ups are posted in the DCs and other operations centers, where staff can see them, and are reported on regularly based on the needs of the customer Functional Area Receiving Receiving Receiving Putaway Crossdocking Crossdocking Crossdocking Picking Picking Metric # of Units Received/ Unit of Time # of PO Lines Received/Unit of Time % of Errors/Units Received # of Puts Completed/Unit of Time # of Units Crossdocked % of Order Units Filled From Crossdock % of Order Lines Filled From Crossdock # of Picks Completed/Unit of Time Picking Sorting # of Picking Errors (i.e parts per million) % of Errors/Units Picked # Items Sorted/Unit of Time Sorting # Order Lines Sorted/Unit of Time Sorting # of Orders Sorted/Unit of Time Sorting Sorting Packing # of Sorting Errors % of Errors/Units Sorted # of Items Packed/Unit of Time Purpose of Metric Labor Productivity (by employee, shift, overall) Labor Productivity (by employee, shift, overall) Receiving Accuracy Putaway Productivity (by employee, by shift, overall) Crossdock Efficiency Crossdock Efficiency Crossdock Efficiency Picking Productivity (by employee, by shift, overall) Picking Accuracy Picking Accuracy Labor Productivity (by employee, shift, overall) Labor Productivity (by employee, shift, overall) Labor Productivity (by employee, shift, overall) Sorting Accuracy Sorting Accuracy Labor Productivity (by employee, 99 Functional Area Metric Packing # of Orders Sorted/Unit of Time Packing # of Orders Sorted/Unit of Time Packing Packing # of Packing/Shipping Errors % of Errors/Units Packed and Shipped # of Units Completed/Unit of Time Shipping Shipping Shipping General Inventory Inventory Inventory Inventory Delivery Delivery # of Orders Completed/Unit of Time # of Order Lines Completed/Unit of Time Average Time from Receipt of Order to Completion (Order Cycle Time) Units in Error/Units Cycle Counted (Random and System Generated) Items (Sku’s) in Error/Items Cycle Counted (Random and System Generated) Locations in Error/Locations Cycle Counted (Random and System Generated) % Units Damaged/Throughput % of Delivery Order delay/total Delivery Order % of Units Lost - Damaged/Units delivery Purpose of Metric shift, overall) Labor Productivity (by employee, shift, overall) Labor Productivity (by employee, shift, overall) Packing/Shipping Accuracy Packing/Shipping Accuracy Labor Productivity (by order type, by employee, shift) Labor Productivity (by order type) Labor Productivity (by order type) Labor Productivity (by order type) Inventory Accuracy Inventory Accuracy Inventory Accuracy Shrinkage On-time Delivery Delivery Accuracy Transition and Integration KN’s team will plan and execute the implementation, transition and integration of METRO and KN logistics operations 100 Transition Management The most critical period in the establishment of a new customer relationship lies in the 60 days before and the 90 days after the start up of operations It’s during this period that Kuehne + Nagel’s ability to execute and deliver on our commitments is most important This group is not a “S.W.A.T Team” that comes in for a brief transition phase before moving on to another assignment In Kuehne + Nagel’s model, dedicated team members continue to work with customers beyond the initial transition to assure that we successfully integrate ourselves with our customer’s organization and sustain operational excellence Team members become advocates for the customer within Kuehne + Nagel and help in building the climate of high trust and open communication that is essential to building mutually beneficial, long-term relationships Quotation of Services Warehouse activities include: • • • • • • • • • • • Applying best practice material handling and storage techniques using KN’s warehouse management system; Provide storage and handling space; Controlling goods inwards for correct items, correct quantities as per outer lables/marks and damages as KN does this on a continuous basis; Carrying out visual quality control on outer packs for goods inwards; Picking and packing as per METRO pick order within agreed time limits; Unloading and loading of containers and trucks; Labeling of goods; Order processing, confirmation based on manual or EDI processes (email, fax, EDI); KN will allocate customer service staff to the account; Cycle Counting and Annual Stock Take Distribute to the Vietnam stores ... belong to literature review of Logistics, Supply Chain, SCM, wholesale - To adapt theory of Logistics and SCM to wholesale system in HCMC to improve the management capacity of wholesale companies in. .. the total integration required within the supply chain Total Information Visibility Create Demand Source to Demand Make to Demand Figure 5: Supply Chain Management Integration Deliver to Demand... of Logistics, Supply Chain Management, Wholesale system 1.1 General literature review of Logistics and Supply Chain Management 1.1.1 Logistics – a part of supply chain 1.1.1.1 Definition