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8/8/2019 Logistics Management Week 2
1/31
LOGISTICS MANAGEMENT
Asst. Prof. Dr. Gl Denkta
akar
MARKETING CHANNELS
LOGISTICS AND SUPPLY CHAIN
MANAGEMENT
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To start with.
Logistics and supply chain management are
not new ideas. From the building of the
pyramids to the relief of hunger in Africa, the
principles underpinning the effective flow ofmaterials and information to meet the
requirements of customers have altered a
little
Martin Stopford
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Before discussing the supply chain
management concept, we need to
understand the marketing channels
sets of interdependent organizations involved
in the process of making a product or service
available for use or consumption.
Ownership channel
Manufacturers Wholesalers
Retailers
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PRODUCTION/OPERATIONS
Sample activities: Quality control Detailed production
scheduling Equipment maint. Capacity planning Work measurement
& standards
LOGISTICS
Sampleactivities:Transport Inventory
Orderprocessing
Materials
handling
Interface
activities: Product
scheduling Plant
location Purchasing
MARKETING
Sampleactivities: Promotion Market
research Product
mix Sales force
management
Interfaceactivities:
Customerservicestandards
Pricing Packaging Retail
location
Production-logisticsinterface
Marketing-logisticsinterface
Internal Supply Chain
Relationship of Logistics to
Marketing and Production
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Five Business Systems - Tightly Interconnected
Within The Organization
Measurement Decisions
Manageme
nt Systems
RewardDecisions
StrategicDecisions
TransportationDecisions
SourcingDecisions
InventoryDecisions
LogisticsSystems{
PriceDecisions
Promotion
Decisions
Marketin
gSystems
ProductDecisions
Place (How,where, how
much) }ProductionSchedulingDecisions
ProductionCapacityDecisions
Shop FloorDecisions
Manufacturing Systems}
ProductDesign
Decisions
ProcessDesign
Decisions EngineeringSystems}
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Product
PricePromotion
Place-Customer
service levels
Inventory
carrying costs
Lot quantity
costs Order processing
and information
costs
Transport
costs
Warehousing
costs
Marke
ting
Lo
gist
ics
Relationship of Logistics to Marketing
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Marketing Channels
Negotiations channel Buy and sell agreements are reached
Financing channel Payments for goods
Promotions channel Promoting a new or existing product
Logistics channel Moving and storing product
throughout the channel
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Channel Intermediaries/
Facilitators Ownership channel Banks, public warehouses
Negotiations channel
Brokers Financing channel
Banks, insurance companies
Promotions channel Advertising agencies, public relations agencies
Logistics channel Freight forwarders
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Main differences between marketing
channels and the supply chain
Reengineering: While the marketing channelappears to concentrate on existing products,the supply chain includes more room for
considering the reengineering of productsand processes.
With the supply chain concept, it is desirable
to negotiate engineering and design changesin products to make them more compatiblewith the needs of other chain members.
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Inventory management:
Inventories have shifted from push to pull
systems. Push strategy:
Manufacturers used long production runs to gain
efficiencies of scale
This minimizes unit costs and optimizing utilization of
their production and distribution assets.
Although the push strategy can strengthenmanufacturers profits, it also results in excess
inventory and inefficient supply chain management
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Push to pull systems
Under the pull scenario, the system listensto the customer through the retailer,transmits preferences back up the
information pipeline and quickly respondswith the merchandise demanded.
The objective across the supply chain is toreduce the inventory buffer for all trading
partners.
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Any strategy that comes to your
mind? A postponement strategy aims at delaying
some supply chain activities until customer
demand is revealed in order to maintain both
low system wide cost and fast response.
Logistics postponement
Products in semi-finished forms and can be
customized quickly in production facilitiesclose to customers
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SUPPLY CHAIN MANAGEMENT DEFINITION:
Supply chain management (SCM) refers to the
integration of both transportation and logistics into a
seamless flow of physical goods, associated information
and funds as goods move from raw materials sourcing tothe final delivery of final products to consumers.
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Some more definitions..SCM creates value through each of its steps,
which take place across organizational boundaries
as required by the market.
The supply chain includes all participants in the
transportation and commercial transactions of
trade.
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Some more definitions..
Supply chain management is
the systemic, strategic coordination of the
traditional business functions and the tactics
across these business functions within aparticular company and across businesses in
the supply chain, for the purposes of improving
the long-term performance of the individual
companies and the supply chain as a whole.
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What is the difference?
Supply chain management is a wider concept thanlogistics.
Logistics is essentially a planning orientation andframework that seeks to create a single plan for theflow of product and information through a business.
Supply chain management builds upon this framework
and seeks to achieve linkage and coordinationbetween the processes of other entities in the pipelinesuch as suppliers, customers and the organizationitself.
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Activity fraActivity fra
Evolution of Supply Chain Management
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How shipping affects international
logistics and supply chains?
1)During the first stage of supply chain
evolution (fragmentation to physical
distribution), international maritime
industry restricted its activities to sea leg,concentrating on operating vessels, fleet
scheduling and stowage planning (these
were invisible to the shipper).
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How shipping affects international
logistics and supply chains?
2)With the advent of the second stage
(integrated logistics management), the
shipping industry started offer through
transport services including thedevelopment of intermodal transport.
3) The third stage of supply chain
management has seen the shippingindustry becoming more integrated into the
shippers supply chain.
IN WHAT WAYS AND HOW?
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Different Supply Chain Configurations
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Supply Chain - Major Decisions
Location Decisions
Production Decisions
Inventory Decisions
Transportation Decisions
All 4 decisions mentioned above are interlinked and arecritical to the success of a modern organization. To make asupply chain successful one needs to take all location,production, inventory & transportation decisions based on
facts providing concrete trade off between cost & service
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Supply Chain Schematic
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Successful Supply Chains
have an enterprise-to-enterprise point ofview
a systems approach across allorganizations in the supply chain
Companies recognize interdependencies(coordination)
Goals and objectives are compatible
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SUPPLY CHAIN ELEMENTS
Supply Chain Design
Resource Acquisition Long Term Planning (1 Year ++)
Strategic
Production/ Distribution Planning Resource Allocation
Medium Term Planning (Qtrly,Monthly)Tactical
Shipment Scheduling
Resource Scheduling
Short Term Planning (Weekly,Daily)Operational
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Globalization of Supply
Chains Increasing globalization Lower priced materials and labor
Global perspective of companies
Development of global competition
Extremely difficult to execute dueto differences
Cultural, economic, and technological
Political, spatial, and logistical
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How long is the supply chain? For many firms, the supply chain extends from their suppliers
suppliers to their customers customers and beyond.
In the textile and apparel industry, a company like Levis maymanage a supply chain consisting of:
A fiber provider
A yarn manufacturer A textile manufacturer A clothing design firm A textile launderer
Distributors Retailers Firms supplying transportation, information or distribution
services to any of Levis partners in the supply chain.
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Supply
Chain forMilk
Products
S l h i
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Supply chain:
structure and tieringSupply chain can be fairly
complex. The supply
chain for a car
manufacturer includes
hundreds of suppliers,
dozens of manufacturing
plants (for parts) andassembly plants (for
cars), dealers, direct
business customers,
wholesalers, customers,
and support functionssuch as product
engineering and
purchasing.
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Barriers to Supply Chain
Management Regulatory and political
considerations
Lack of top managementcommitment
Reluctance to share, or use,
relevant data
Incompatible information systems
Incompatible corporate cultures
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Thats all for today
Thanksss
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