Establishing a warehouse distribution system involves several critical criteria to ensure efficiency and effectiveness. These include:
* Transportation Costs: This is crucial as it impacts the overall cost of goods delivered to customers.
Efficient transportation strategies can significantly reduce costs and improve delivery times.
* Material Handling Costs: These are costs

* Definitions:
* Engineer-to-Order (ETO): Products are designed and built to customer specifications after the order is received.
* Assemble-to-Order (ATO): Products are assembled from pre-existing components after receiving an order.
* Inventory Implications: Moving from ETO to ATO requires maintaining an inventory of components and subassemblies that can be quickly assembled into final products.
* Increased Costs:
* Inventory Costs: Increased because components need to be stocked to facilitate quick assembly.
* Comparison with Other Costs:
* Transportation (A): Costs per unit generally remain unaffected by the move from ETO to ATO.
* Manufacturing (C): Manufacturing costs per unit typically decrease due to standardized components.
* Procurement (D): Procurement costs might be streamlined due to bulk buying of components but do not necessarily increase per unit.
* Conclusion: The shift to ATO usually increases inventory costs per unit due to the need for maintaining a stock of components.
References
* "Manufacturing Planning and Control for Supply Chain Management" by Thomas E. Vollmann, William L. Berry, and David C. Whybark.
* APICS Dictionary, 16th Edition.

Applying Six Sigma principles is the best approach to reduce variability in product design. Six Sigma is a data-driven methodology that focuses on process improvement and variation reduction through the application of statistical tools and techniques. By identifying and eliminating defects and process variations, Six Sigma helps in achieving high-quality product designs with minimal variability. This systematic approach to problem-solving ensures that products meet customer specifications and performance standards consistently.
References:
"Six Sigma: The Breakthrough Management Strategy Revolutionizing the World's Top Corporations" by Mikel Harry and Richard Schroeder

The most appropriate benchmark for evaluating supply chain management practices is a firm that has successfully reduced its costs, lead times, and late deliveries. Such a firm demonstrates effective supply chain efficiency and reliability. Benchmarking against a company that excels in these areas allows an organization to identify best practices, set performance targets, and implement strategies to enhance its own supply chain operations. This focus on cost reduction, timeliness, and reliability directly impacts overall supply chain performance and customer satisfaction.
:
"Benchmarking Best Practices in Maintenance Management" by Terry Wireman APICS Dictionary, 16th Edition