Load Optimization For NTM

1.

SE CLUSTER
SUPPLY CHAIN
Load Optimization For NTM
Philsa, İzmir

2.

Agenda
• Objectives
• As-Is Analysis
• Load Optimization Methods
• To-Be Analysis Under Constraints
• Saving For 2008
• Examples
• SLF
• Toolbox

3.

Objectives
• Decrease logistics cost
• Reduce administrative costs.
• Reduce material consumption (pallets, labels etc.)
• Contribute to the reduction environmental pollution

4.

As-Is Analysis
• Constitute annual NTM purchase plan in terms of category (tipping
paper, plug wrap etc.)
• Analyze current
container / truck types
loading schemes
pallet sizes / heights / weights
shipment quantities / weights for each item
• Determine current
container / truck capacity utilizations (SLF)
logistics costs

5.

Load Optimization Methods
Change
transport modality types
pallet size
number of layers on the pallets (pallet heights)
number of materials in a layer of pallet
stack heights (number of pallets one on another)
orientation of the pallets
packing types / sizes

6.

To-Be Analysis Under Constraints
• Constraints to be taken into consideration:
container / truck capacities (volume and weight)
regulations of countries about weight limitations
material characteristics (ex: resistance against crush)
affiliate’s stock and ordering strategies
suppliers’ manufacturing and loading capabilities
• Develop optimum loading schemes and calculate
optimum number of shipments
logistics costs with optimum loading schemes
potential cost saving for each item.

7.

Saving for 2008
Logistics Cost Saving From Import NTMs ($):
Material Family
Total Cost
As-is
Total Cost
To-be
Annual Saving
Cost
Improvement
%
Filter Making
1,434,745
1,277,978
156,767
10.9%
Cigarette Making
281,673
197,738
83,935
29.8%
Packaging Materials
594,835
497,316
97,519
16.4%
Ingredients
102,115
75,775
26,340
25.8%
Adhesives
61,025
37,352
23,673
38.8%
Grand Total
2,474,393
2,086,159
388,234
15.7%
Logistics Cost Savings From Local NTMs ($):
Material Family
Total Cost
As-is
Total Cost
To-be
Annual Saving
Cost
Improvement
%
Packaging Materials
198,500
120,600
78,500
39.6%
Grand Total
198,500
120,000
78,500
39.6%

8.

Saving for 2008
Additional Saving:
Saving Element
As-is
Annual
Saving
Unit of
Measure
Improvement
%
# of Invoices
5,039
447
# of docs.
9%
# of Delivery Slips
6,849
1,001
# of docs.
15%
# of Customs Declarations
1,719
123
# of docs.
7%
Stamp Tax
40,066
2,867
$
7%
# of Pallets*
4,860
510
# of pallets
10%
* Given for the materials of which pallet quantities are decreased by load optimization.

9.

SLF
Material Group
SLF
Before
SLF
After
Improvement Method
Tipping Paper
78%
100%
Loading scheme, container, order qty increase
Acetate Tow
86%
100%
Order qty increase
Filter Rod
93%
100%
Pallet size, # of layers, tray/layer
Plug Wrap
85%
100%
Container, # of layers, 2-high shipment
Adhesives
45%
75%
Pallet orientation, # of layers
Triacetine
90%
100%
Shipment without pallet => Order qty increase
Charcoal
91%
100%
Packaging, # of pallets
Ingredients
80%
100%
Pallet size, container, # of layers, 2-high shipment, order qty increase
Hinge Lid
70%
100%
Order qty increase
Metalize Paper
86%
100%
Order qty increase
Aluminium Foil
86%
100%
Order qty increase
Film
87%
100%
Order qty increase

10.

Examples – Filter Making
Filter Rod from PM Poland
24 k $ / year (10% savings)
9 11 layers / pallet
SLF BEFORE: 90%
Gap
SLF AFTER: 100%
No Gap
Truck
40 pallets
2,160 trays
G. Weight: 10.5 tons
Truck
40 pallets
2,640 trays
G. Weight: 12.9 tons

11.

Examples – Cigarette Making
Tipping Paper from Benkert (Germany)
37 k $ / year (57% savings)
70 90 bobbins / pallet
20’ Cont. 40’ Cont.
Pallet orientation change
SLF AFTER: 100%
SLF BEFORE: 78%
Container: 20’
20 pallets
1,400 bobbins
G. Weight: 11.7 tons
Container: 40’
44 pallets
3,960 bags
G. Weight: 26.3 tons

12.

Examples – Ingredients
Cocoa Powder from EVD (France)
3 k $ / year (17% savings)
3 4 bags / layer
10 6 layers / pallet
One-High Two-High
SLF AFTER: 100%
SLF BEFORE: 62%
Gap
Container: 20’
10 pallets
300 bags
G. Weight: 20.7 tons
Container: 20’
20 pallets
480 bags
G. Weight: 25.1 tons
No Gap

13.

Toolbox
Objective:
• Reveal optimum loading alternatives and optimum order quantities of
each material, under weight limitations and volume constraints
• Display optimum loading schemes of alternative pallet sizes visually,
for alternative transport modalities (truck, 40’ cont., 20’ cont.)
MAXIMIZE SLF

14.

Toolbox
Inputs:
• Material information (pallet size, pallet weight etc.)
• Route and vehicle weight for truck shipments

15.

Toolbox
Outputs:
• Optimum pallet quantities, loading schemes and order quantities
• Weight limitations on route, for truck shipments

16.

Toolbox
Loading Scheme Example:
Vehicle
:
Truck
Pallet size
:
100x120
Capacity
:
48 Pallets

17.

Thank You

18.

To-Be Analysis Under Constraints
Weight Limitations Of European Countries For Road Transportation
* Source: European Conference of Ministers of Transport (ECMT)

19.

To-Be Analysis Under Constraints
Weight Limitation Analysis For Truck Trailer Transportation
Analyze
weight limitations on each route (consider minimum)
truck specifications
o
trailer type (standard trailer, mega truck etc.)
o
number of axles (3+2, 2+2 etc.)
o
truck + trailer weight
Supplier
Country
Truck + Trailer
Weight
Route To
Philsa
Min. of
Weight
Limitations
On Route
Permissible
Max.
Gross Load
Weight
Traun
AT
15,900
AT-IT
38,000
22,100
Onnens
CH
15,900
CH-IT
40,000
24,100
Atessa
IT
15,900
IT
44,000
28,100
Supplier
Location
* Source: European Conference of Ministers of Transport (ECMT)

20.

To-Be Analysis Under Constraints
Weight Limitation Analysis For Ocean Transportation:
Consider max. payload for each container type
Container
Type
Max. Gross Weight
(kg)
Tare
(kg)
Max. Paylaod
(kg)
20’
30,250
2,250
28,000
40’
30,180
3,780
26,400
40’ HC
30,420
4,020
26,400

21.

Implementation
• Assure conformity of new loading scheme with the regulations of all
countries through the route
Determine the type and gross weight of each transport
modality
Search for the weight limitations* of the countries
Determine maximum gross load/volume
• Agree on the new loading scheme with
Purchasing Department in terms of stock & ordering strategies
Warehouse Department for unloading and handling purposes
• Agree on the new loading scheme with the supplier considering their
loading capabilities
* Sources: International Road Transportation Union (IRU) , European Conference of Ministers of Transport (ECMT)

22.

Examples
• Plug Wrap from Cartiere Del Maglio (Italy).
• Annual expected cost saving: 32,000 $ (29% saving)
• Method used to increase SLF:
Stack height increase (One-High Two-High).
Stack Height: One-High
20 Pallets/Truck
Gross Weight : 18,5 Tons
Stack Height: Two-High
27 Pallets/Truck
Gross Weight: 26 Tons
AFTER
BEFORE

23.

Examples – Packaging Materials
Shipping Case from Olmuksa (Turkey)
24 k $ / year (37% savings)
190 160 layers / pallet
One-High Two-High
SLF AFTER: 95%
SLF BEFORE: 59%
Truck
24 pallets
9,120 cases
G. Weight: 7,7 tons
Truck
46 pallets
14,720 cases
G. Weight: 12,5 tons

24.

Examples
• Filter from Papastratos (Greece).
• Annual expected cost saving: 4,150 $ (67% saving)
• Methods used to increase SLF:
Pallet size change (106*106 115*135 cm.),
Pallet height increase (9 10 Layers / Pallet),
Layer amount increase (4 6 Trays / Layer).
BEFORE
AFTER
106*106 cm. Pallets
9 Layers/Pallet (Two-H.)
4 Trays/Layer
26 Pallets/Truck
936 Trays/Truck
Gross Weight : 4,1 Tons
115*135 cm. Pallets
10 Layers/Pallet (Two-H.)
6 Trays/Layer
40 Pallets/Truck
2,400 Trays/Truck
Gross Weight: 10,6 Tons

25.

Examples
• Hinge Lid / Display Carton from Alcan (Turkey).
• Annual expected cost saving: 36,800 $ (43% saving)
• Method used to increase SLF:
Stack height increase (One-High Two-High).
BEFORE
AFTER
Stack Height: One-High
25 Pallets/Truck
Gross Weight : 16 Tons
Stack Height: Two-High
44 Pallets/Truck
Gross Weight: 28 Tons

26.

’08 Key Initiatives / Load Optimization for NTM
Plug Wrap from Miquel Y Costas (Spain)
31 k $ / year (46% saving)
20’ cont. 40’ cont.
140 152 bobbins/pallet
SLF AFTER: 100%
SLF BEFORE: 92%
Gap
Container: 20’
140 bob/pallet
2,800 bob/20’
G. Weight: 10,5 tons
No Gap
Container: 20’
152 bob/pallet
3,040 bob/20’
G. Weight: 11,4 tons
Container: 40’
152 bob/pallet
6,080 bob/40’
G. Weight: 22,9 tons