Académique Documents
Professionnel Documents
Culture Documents
Logistics/Supply Chain
Management
Chapter 1
What is Logistics?
Seven Rs
Components of Logistics
Management
Business logistics
Supply chain management
Distribution
Channel management
Logistics management
Materials management
Physical distribution
Quick response and flexible
manufacturing
The Relationship
between Logistics and
Supply Chain Management
Storage
Mfg.
Storage
Dist.
Retailer
Customer
Supplier
Storage
Service
Customer
Customer
Customer
Customer
Supplier
Supplier
Supplier
Final
Customer
Transportation
Warehousing
Transportation
Customers
Information
flows
Factory
Transportation
Vendors/plants/ports
Warehousing
Transportation
Reverse logistics
Physical supply
(Materials management)
Sources of
supply
Physical distribution
Plants/
operations
Transportation
Inventory maintenance
Order processing
Acquisition
Protective packaging
Warehousing
Materials handling
Information maintenance
Customers
Transportation
Inventory maintenance
Order processing
Product scheduling
Protective packaging
Warehousing
Materials handling
Information maintenance
BL Key Activities/Processes
Primary
- Setting customer service goals
- Transportation
- Inventory management
- Information flows and Order processing
Secondary, or supporting
- Warehousing
- Materials handling
- Acquisition (purchasing)
- Protective packaging
- Product scheduling
- Information maintenance
Typical Issues
Customers
Forecasting
Design
Processing
Inventory
Purchasing
Suppliers
Location
Logistics
Importance of Logistics/SCM
-Logistics is about creating value, both for customers
and suppliers of the firm, and for the stakeholders.
-Business creates four types of value in products or
services:
form, time, place and possession.
Manufacturing
LOGISTICS
Marketing,
Engineering
and Finance
SCM
-Logistics can help penetrating new markets,
increasing market share and increasing profit, i.e.
it generates sale, not just reduce costs.
Significance of Logistics
Percent of sales
$/cwt.
Transportation
3.34%
$26.52
Warehousing
2.02
18.06
Order entry
0.43
4.58
Administration
0.41
2.79
Inventory carrying
1.72
22.25
7.65%
$67.71
Logistics cost
are about 10% of
sales
Benefit
Campbell Soup
Hewlett-Packard
Sport Obermeyer
National Bicycle
Wal-Mart
Relationship of Logistics to
Marketing and Production
PRODUCTION/
OPERATIONS
Sample activities:
Quality control
Detailed production
scheduling
Equipment maint.
Capacity planning
Work measurement
& standards
Interface
activities:
Product
scheduling
Plant
location
Purchasing
LOGISTICS
Sample
activities:
Transport
Inventory
Order
processing
Materials
handling
Interface
activities:
Customer
service
standards
Pricing
Packaging
Retail
location
Productionlogistics
interface
MARKETING
Sample
activities:
Promotion
Market
research
Product
mix
Sales force
management
Marketinglogistics
interface
Logistics Objective
Maximize return on logistics
assets (ROLA)
Logistics
contribution
to sales
Costs of
logistics
operations
Location Strategy
Location decisions
The network planning process
The focus is
here
C O N T R O L L IN G
Customer
service goals
The product
Logistics service
Ord. proc. & info. sys.
Transport Strategy
Transport fundamentals
Transport decisions
P L A N N IN G
Inventory Strategy
Forecasting
Inventory decisions
Purchasing and supply
scheduling decisions
Storage fundamentals
Storage decisions
O R G A N IZ IN G
Study Framework
Transport decisions
Purchasing and supply
scheduling decisions
Customer
Storage decisions
service goals
The product
Logistics service
Information sys.
Location Strategy
Location decisions
The network planning process
Assignments
Chapter 1
Class assignments
Assignments
Suppose that a manufacturer of mens shirts can produce a dress
shirt in its Houston, Texas plant for $8 per shirt (including the cost
of raw materials). Chicago is a major market for 100,000 shirts per
year. The shirt is prices at $15 at the Houston plant. Transportation
and storage charges from Houston to Chicago amount to 5$ per
hundredweight (cwt.). Each packaged shirt weighs 1 pound.
As an alternative, the company can have the shirts produced in Taiwan
for $4 per shirt (including the cost for raw materials). The raw
materials, weighing about 1 pound per shirt, would be shipped
from Houston to Taiwan at a cost of $2 per cwt. When the shirts
are completed, they are to be shipped directly to Chicago at
transportation and storage cost of $6 per cwt. An import duty of
$0.50 per shirt is assessed.
From a logistics-production standpoint, should the shirts be produced in
Taiwan?
What additional considerations, other than economic ones, might be
considered before making a final decision?