introduction into logistics
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Introduction into Logistics. PhD Natasha Lutovinova Logistics Lecturer E-mail: [email protected] Room: G1.006. Handbook: Paul R. Murphy & Donald F. Wood, Contemporary logistics (New Jersey 2011), 10 th edition. 3. Introduction into Logistics Course Outline. 12.05 Introduction - PowerPoint PPT PresentationTRANSCRIPT
Introduction into Logistics
PhD Natasha LutovinovaLogistics Lecturer
E-mail: [email protected]: G1.006
Handbook: Paul R. Murphy & Donald F. Wood, Contemporary logistics (New Jersey 2011), 10th edition
3
Introduction into Logistics Course Outline
12.05 Introduction
13.05 SCM Concept, Inventory
14.05 Demand Management, Warehousing Management
15.05 Transportation Management, International Logistics
16.05 Poster Session
CHAPTER 2
The Supply Chain Management concept
5 - 2
Learning objectives
To learn about supply chains and their management
To realize the importance of leveraging technology
To appreciate barriers to supply-chain management
6 - 2
• Logistics: what it is– Council of Logistics Management definition:
• “Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.”
Logistics and the Supply Chain
7 - 1
Inbound Logistics
Physical Supply
Production Logistics
Materials Management
Outbound Logistics
Physical Distribution
Reverse Logistics
“The scope of logistics spans the organization, from the management of raw materials though to the delivery of the final product.”
8 - 2
A supply chain “encompasses all activities associated with the flow and transformation of goods from the raw material stage (extraction), through to the end user, as well as the associated information flows.”
Source: Robert B. Handfield and Ernest L. Nichols, Jr., Introduction to Supply Chain Management
The Supply Chain Management concept
9 - 2
“Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence , Supply Chain Management integrates supply and demand management within and across companies.”
The Supply Chain Management concept
10 - 2
Figure 2-1: Different Supply Chain Configurations
Figure 2-1: Different Supply Chain configuration
11 - 2
Source: Van Goor, Ploos van Amstel & Ploos van Amstel, European distribution and supply chain logistics (Groningen 2003), p.49
12 - 2
The Supply Chain Management concept
13 - 2
Supply chain management is a wider concept than logistics
14 - 2
GrowersMinersUtilitiesManufacturers
UtilitiesBuildersOther merchants
Mom Kids Consumers
Suppliers Producer Retailer Customer
Supply chain example: lemonade stand
Corner grocery
Suppliers’
suppliers
15 - 2
Services also have supply chains:
16 - 2
The Supply Chain Management configuration
17 - 2
Key attributes of Supply Chain Management Customer power
Fast supply chain Agile supply chain Perfect orders
Long-term orientation Partnerships
Leveraging technology Enhanced communication across
organizations
The Supply Chain Management concept
18 - 2
Key attributes of Supply Chain Management
Inventory controlBullwhip effect
Interorganizational CollaborationSupply Chain collaboration
The Supply Chain Management concept
19 - 2
http://www.youtube.com/watch?v=MW4EWkwC9LM
Barriers to Supply Chain Management
Regulatory and political considerations
Lack of top management commitment
Reluctance to share, or use, relevant information
Incompatible information systems
Incompatible corporate cultures
Globalization
The Supply Chain Management concept
21 - 2
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22 - 2
Source: Van Goor, Ploos van Amstel & Ploos van Amstel, European distribution and supply chain logistics (Groningen 2003), p.63
23 - 2
Supply Chain Management and integration Partnerships, strategic alliances, third-party
arrangements and contract logistics
3 ways of integration:
Vertical integration (e.g. Ford Motor Company)Formal contracts (e.g. McDonald’s franchise)Informal agreements
The Supply Chain Management concept
24 - 2
The supply chain and competitive performance
Stage one: baseline
Material
flow
Customer
service
Materialcontrol
Purchasing Production Sales Distribution
25 - 2
The supply chain and competitive performance
Materialsmanagement
Manufacturingmanagement
Distribution
Stage two: functional integration
Material
flow
Customer
service
26 - 2
The supply chain and competitive performance
Materialsmanagement
Manufacturingmanagement
Distribution
Stage three: internal integration
Material
flow
Customer
service
27 - 2
The supply chain and competitive performance
Suppliers Customers
Stage four: external integration
Material
flow
Customer
service
Internal supplychain
28 - 2
• The systems approach
“Company’s objectives can be recognized by the mutual interdependence of the major functional area of the firm, such as marketing, production, finance and logistics”.
• The total cost approach
“Cost trade-offs have to be made”.
Logistics and the Supply Chain (logistical relationships within the firm)
29 -2
Logistics and the Supply Chain (logistical relationships within the firm)
30 -2
Source: Van Goor, Ploos van Amstel & Ploos van Amstel, European distribution and supply chain logistics (Groningen 2003), p.66
Supply Chain Management and integrationThird-party logistics
Third-party logistics or Logistics outsourcing or Contract logistics
Fourth-party logistics (4PL) or Lead logistics provider (LLP)
Supply Chain software (e.g. ERP)
The Supply Chain Management concept
31 - 2
Fig
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The trend towards globalization in the Supply Chain
32 - 2
Fig
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The trend towards globalization in the Supply Chain leads to:
Focused factories
risk: Scale of economy lead to low manufacturing
cost but higher logistics costs
Centralization of inventories
Postponement and localization
33 - 2
Country 1
Sourcing Manufacturing Inventory Distribution Sales
Country 2
Country n
Stage 1: Direct export
34 - 2
Country 1
Sourcing Manufacturing Inventory Distribution Sales
Country 2
Country n
Stage 2: National Warehouses
35 - 2
Country 1
Sourcing Manufacturing
Inventory
Distribution Sales
Country 2
Country n
Stage 3: Logistics centralisation
36 - 2
Country 1
Sourcing and Primary manufacturing
Inventory
Distribution
Sales
Country 2
Country n
Stage 4: Postponed Manufacturing
Final manufacturing
37 - 2
Comparing forward and reverse logistics
Forecasting rel. straightforward
One to many distribution points
Product quality uniform
Product packaging uniform
Destination/routing clear
Pricing relatively uniform
Importance of speed recognised
Distribution cost easily visible
Negotiations straightforward
Process is more transparent
Forecasting more difficult
Many to one distribution points
Product quality not uniform
Product packaging often damaged
Destination/routing unclear
Pricing dependent on many factors
Speed often not a priority
Reverse cost less directly visible
Negotiations difficult
Process is less transparent
38 - 2
Next time:
Assignment 2
39 - 2
please split into 4 groups Choose a product Draw and explain your supply chain for this
product