Intended learning outcomes: Present important features and possible values referring to an item: unit cost and transportability.
Continuation from previous subsection (4.4.2b)
An item’s unit cost is defined as the total cost for producing or purchasing one unit of measure of the item, e.g., one part, one gallon, one pound. It includes labor, material, and overhead cost.
- A high-cost item is an item with a relatively high unit cost compared with the unit cost of a low-cost item.
For many important decisions in logistics and operations management, a very rough classification in low- and high-cost items is sufficient. However, an ABC classification considering sales and projected volume would allow a finer distinction. See Section 11.2.2.
The transportability of an item is actually a statement on the size and weight per unit of measurement. If the item is a service, transportability refers to the object on which the service is carried out.
- A nontransportable itemis an item with a size or weight that permits no transport. These are items or objects, for example, of a size greater than 50 m3or a weight greater than 200 metric tons. An example here is manufacture or maintenance of large plants.
- A transportable itemis an item with a size or weight that permits transport using technical aids, such as helicopters, heavy goods vehicles, airplanes, or several people working together.
- A portable itemis an item with a size or weight that permits transport (over a longer period of time) by means of the strength of one person. These are items or objects, for example, of a size smaller than 0.01 m3 or weighing less than 15 kg per unit. Letters sent out by courier are an example.
- Digitally transmittable itemsare items that may be transmitted, or transported, using a digital communication protocol. These nonmaterial goodshave a size or weight of zero.
The division of unit costs by the size or weight of the object leads to the concept of value density, that is, product value per kilogram or cubic meter. Digitally transmittable items have a value density approaching infinity. Value density plays a central role in the design of supply chains. See here also Section 3.1.1 and [Senn04]. It is a challenge, for example, if low-cost services are to be provided for nontransportable objects. This is the case with services for plants that have been installed worldwide. In designing the services, the proportion of services that can be transmitted digitally is particularly important.
Quiz on Chapter 4.4.2. : not yet available
Six Features in Reference to Customer, and Item or Product or Product Family[kml_flashembed movie="https://opess.ethz.ch/wp-content/uploads/elements/Quiz_4_4_2.swf" height="75%" width="100%" /]
Course section 4.4: Subsections and their intended learning outcomes
4.4 Characteristic Features Relevant to Planning & Control in Supply Chains
Intended learning outcomes: Produce an overview on principle and validity of characteristics in planning & control. Explain six features in reference to customer, and item or product or product family, five features in reference to logistics and production resources, as well as seven features in reference to the production or procurement order. Describe important relationships between characteristic features of transcorporate logistics in supply chains.
4.4.1 Principle and Validity of Characteristics in Planning & Control
Intended learning outcomes: Describe the characteristic in planning & control in a supply chain. Explain the use of the results of the analysis.
4.4.2 Features in Reference to a Product: Depth and Orientation of the Product Structure, and VAT Analysis
Intended learning outcomes: Present important features and possible values referring to a product. Differentiate between a convergent product structure and a divergent product structure. Disclose the VA analysis within the VAT analysis.
4.4.2b Features in Reference to Customer and Product Family: Frequency of Customer Demand and Product Variety Concept
Intended learning outcomes: Present important features and possible values referring to the customer demand and the product variety concept. Differentiate between continuous demand and discontinuous demand. Explain the product variety concept. Disclose the T analysis within the VAT analysis and its relation to the product variety concept.
4.4.2c Features in Reference to an Item: Unit Cost and Transportability
Intended learning outcomes: Present important features and possible values referring to an item: unit cost and transportability.
4.4.3 Features in Reference to Logistics and Production Resources: Production Environment and Depth of the Product Structure in the Company
Intended learning outcomes: Present important features and their possible values in reference to logistics and production resources. Explain the production environment: make-to-stock, assemble-to-order, make-to-order, and engineer-to-order. Differentiate the depth of product structure in the company from the depth of the product structure within the total supply chain.
4.4.3b Features in Reference to Production Resources: Facility Layout, Flexible Capability, Flexible Workforce, and Flexible Capacity
Intended learning outcomes: Present important features and their possible values in reference to production resources. Describe fixed-position manufacturing, job shop production, as well as single-item-oriented, high-volume and continuous line production. Differentiate flexible capability (of the production equipment), flexible workforce, and flexible capacity.
4.4.4 Features in Reference to the Production or Procurement Order: Reason for Order Release, Frequency of Order Repetition, and Flexibility of the Order Due Date
Intended learning outcomes: Present important features and possible values in reference to production or procurement order. Differentiate between order release according to demand, prediction, and consumption. Differentiate between production (or procurement) without, with infrequent, and with frequent order repetition. Identify the feature flexibility of the order due date.
4.4.4b Features in Reference to the Production or Procurement Order: Blanket Order, Lot Size or Batch Size, Lot Traceability, Loops in the Order Structure
Intended learning outcomes: Present important features and possible values in reference to production or procurement order. Identify the features type of long-term order and blanket order. Explain the concepts of lot size, lot traceability, and loops in the order structure.
4.4.5 Relationship between Facility Layout, Orientation of Product Structure, and (Order) Batch Size, and between Product Variety Concept, Production Environment, and Frequency of Order Repetition
Intended learning outcomes: Identify links among the features facility layout, orientation of product structure, and (order) batch size. Disclose links among the features product variety concept, production environment, and frequency of order repetition.
4.4.5b Relationship between the Frequency of Customer Demand and the Frequency of Order Repetition
Intended learning outcomes: Explain why the features frequency of customer demand and frequency of order repetition do not necessarily need to correspond.
4.4.6 Features of Transcorporate Logistics in Supply Chains
Intended learning outcomes: Present important features, possible values, and increasing complexity of supply chain collaboration, of supply chain coordination, and of the configuration of the supply chain.
