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Chapter 1: Introduction to Logistics

and Supply Chain Management

Dr. YANG Ruina (Anna)


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Reference Book
• Design and Managing the Supply Chain
---David Simchi-Levi (3rd Edition)

• Logistics and Supply Chain Management

(Strategies for Reducing Cost and
Improving Service)
---Martin Christopher (2nd Edition)
• Inventory management
• Forecasting
• Supply contracts
• The value of information
• Supply chain integration
• Distribution Strategy
• Outsourcing, off-shoring, and procurement
• Logistics Management

• Supply Chain Management

• Global Supply Chain

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Review of Logistics
• Origin: Military strategy (e.g. Gulf War 1991)
• Wars have been won through logistics strengths
and capabilities
• The Second World War (The Allied Forces’
invasion of Europe, Rommel “before the fighting
proper, the battle is won or lost by quartermasters”

It is only in the recent past that business organizations have come to recognize
the vital impact that logistics management can have
in the achievement of competitive advantage

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The Definition of Logistics
Logistics Definition
The Definition of Logistics(Latest)

Logistics Management

What Skills Needed?
• Communication
• Problem solving
• Information technology
• Business knowledge

Logistics in China

Percentage of Logistics Cost/GDP

World Bank Logistics Performance

The Increased Importance of Logistics

• Globalization
• Information technology advances
• A reduction in economic regulation
• Changes in consumer behavior
• The growing power of retailers


Global Supply Chain

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The Value Curve

Information Technology

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Information Technology

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A Reduction in Economic Regulation

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Changes in Consumer

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The Growing Power of

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What is a Supply Chain?

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Examples of Supply Chain

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Examples of Supply Chains

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The SCM Network
Supply Chain Management

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Key Observations
• Every facility that impacts costs need to be
– Suppliers’ suppliers
– Customers’ customers
• Efficiency and cost-effectiveness throughout the
system is required
– System level approach
• Multiple levels of activities
– Strategic – Tactical – Operational
What Makes SCM Difficult?
• Supply chain strategy can not be
determined in isolation.
• Challenging to minimize system costs and
maximize system service levels
• Inherent presence of uncertainty and risk
Global Apparel Value Chain
Tracing back the dress you are wearing

• Attendance 5%

• Case study 30%

• Assignment 15%

• Final Report 50%

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Final Report(50%)
• Based on the theories, methods, tools learned
from this course, please design a firm, and focus
on its supply chain strategies and practices.

• Will this firm survive in the future? Will it be
successful? Why?
• How could we defeat this firm? (please consider this
from the perspectives of competitors)
• What are the most important issues for supply chain
Final Report
• Individual assignment, about 3000 words, A4
paper with 2.54 cm for all margins, 12 pts Times
New Roman font, double space.
• Appendices and references should be 12 pts
Times New Roman font, single space. Please
refer to Journal of Operations Management
papers for other formats (e.g. Citations and

Group Discussion
• Consider the supply chain for a automobile.
-- What are the components of the supply chain
for the automobile?
-- What are the different firms involved in the
supply chain?
-- What are the objectives of these firms?
-- Provide examples of conflicting objectives in
this supply chain.