1.2.

Logistics planning and service management

1.2. Logistics planning and service management

Key Logistics activities:

1.Customer service standards: 1.Customer customer wants and needs, customer response to service, setting customer level

Key Logistics activities:

2. Transportation: mode and transport service selection, freight consolidation, carrier routing, vehicle scheduling, equipment selection, claims processing, rate auditing 1 - 14

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1.2. Logistics planning and service management

1.2. Logistics planning and service management Support activities:

1. Warehousing: space determination, stock layout and dock design, warehouse configuration stock placement 2. Materials handling: equipment selection, equipment replacement policies, order picking policies, stock storage and retrieval,

Key Logistics activities:

3. Inventory management: raw material and finished goods stocking policies, short-term sales forecasting, short product mix at stocking points, number, size and location of stocking points, just in time, push and pull strategies - 15 1

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1.2. Logistics planning and service management Support activities:

3. Purchasing: supply source selection, purchase timing, purchase quantities, 4. Protective packaging: design for handling, storage, protection from loss and damage,
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1.2. Logistics planning and service management Support activities:

5. Cooperation with production/operations: specification of aggregate quantities, sequence and time production output, 6. Information maintenance: information collection, storage, and manipulation, data analysis, control procedures
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1.2. Logistics planning and service management

Total cost concept
Total cost Transportation cost Truck Service

1.2. Logistics planning and service management

Setting customer service level (I)
Total cost Service cost Lost sales cost Improved customer service
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Inventory cost Rail Air

1.2. Logistics planning and service management

Setting customer service level (II)
Free cash flow
[R.H. Ballou: Ballou: Revenue estimation for logistics consumer offerings, Int. J Logistics Management 17,1, 2006]

1.2. Logistics planning and service management

FedEx is committed to our People-ServicePeople-ServiceProfit philosophy. We will produce outstanding financial returns by providing total reliable, competitively superior, global air-ground airtransportation of high priority goods and documents that require rapid, time-certain timedelivery. Positive control of each package will be maintained using real time electronic tracking and tracing systems.
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Lost sales cost

Revenue - cost

Improved customer service Effectiveness (cost minimization) or efficiency (maximizing free cash-flow)? cashDemand supply management ZARA: hot fill-ins 1 - 21 fill-

1.2. Logistics planning and service management

FedEx A complete record of each shipment and delivery will be presented with our request for payment. We will be helpful, courteous, and professional to each other and the public. We will strive to have a completely satisfied customer at the end of each transaction.

1.2. Logistics planning and service management

Service Specs at UPS

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1.2. Logistics planning and service management

Courteous, but Limited Passenger Service Lean, Productive Employees Short Haul, Point-toPoint Routes, Often to Secondary Airports

1.2. Logistics planning and service management

Moments of Truth

Concept created by Jan Carlzon of Scandinavian Airways Critical moments between the customer and the organization that determine customer satisfaction There may be many of these moments These are opportunities to gain or lose business

Competitive Advantage: Low Cost

High Aircraft Utilization

Standardized Fleet of Boeing 737 Aircraft

Frequent, Reliable Schedules

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1.2. Logistics planning and service management

Moments-of-Truth Moments-ofComputer Company Hotline Standard Expectations
Experience Detractors I had to call more than once to get through A recording spoke to me rather than a person While on hold, I get silence,and wonder if I am disconnected The technician sounded like he was reading a form of routine questions The technician sounded uninterested I felt the technician rushed me 1 - 27 Only one local number needs to be dialed I never get a busy signal I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem A timely resolution to my problem is offered The technician is able to explain to me what I can expect to happen next Experience Enhancers The technician was sincerely concerned and apologetic about my problem He asked intelligent questions that allowed me to feel confident in his abilities The technician offered various times to have work done to suit my schedule Ways to avoid future problems were suggested

1.3. Transport, Inventory and location strategies, decisions and models

Triangle of Logistics Decision making
Inventory strategy: inventory level, deployment of inventories, control transport strategy: modes, routing, scheduling, shipment size

Customer Service Goals

location strategy: number, size, location, assignments of demand to stocking points

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