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Logistics and Supply Chains
What is Logistics
The total management of the key operational functions in the
supply chain – procurement, production and distribution.
Procurement includes purchasing and productdevelopment. The production function includes
manufacturing and assembling,while the distribution function involves warehousing,
inventory, transport and delivery.
Logistics and Supply Chains
Logistics : Range of Activities Involved
• Freight fowarding• Customs brokerage• Freight auditing and payment• Vehicle control and communications• Product identifications & tracking• Information systems – optimisation in management
Logistics and Supply Chains
Logistics : Range of Activities Involved
• Transportation services / Brokerage• Transportation equipment / leasing• Private fleet assets / management• Warehousing• Order Management & fulfillment• Cross docking • Value added, assembly & configuration• Site location
Logistics and Supply Chains
is the planning, organisation and control of all aspectsof inventory embracing procurement, warehousing, workin progress and distribution of finished goods.
Materials Management
Logistics and Supply Chains
Logistics and Supply Chains
Logistics : Transport Principles
• Economies of scale : Large capacity transportation vehicle are less costly per unit of freight than smaller capacity vehicle.
• Economy of distance : Decrease transportation coast per unit of weight as distance increase. To maximise the size of load and the distance being shipped while still meeting the customer expectation,
Logistics and Supply Chains
Logistics :Transport Mode
• Small Packages• Air Cargo• Truckload• Railroad/ Train• Water• Pipe Line• Intermodal (Combination)
Logistics and Supply Chains
Logistics :TransportationManagement
• On-time pick up• On-time delivery• Loss & damage claims• Transit time• Transit time reliability• Equipment availability• Price• Continuous improvement
Logistics and Supply Chains
Economic Driver
Factors
Distance
Weight
DensityStow
ability
Handling
Liability
Market
is the process of planning, implementation and controllingthe efficient, cost effective flow of raw materials, in processinventory, finished goods and related information from thepoint of consumption to the point of origin for the purposeof recapturing value or proper disposal.
Reverse Logistics
Logistics and Supply Chains
Logistics and Supply Chains
A Supply Chain is that network of organisations that are involved,through upstream and downstream linkages, in the different processesand activities that produce value in the form of products and services
in the hands of the ultimate customer or consumer.
Can be classified according to:• Customer/supplier characteristics• Virtuality• Scope• Service• Complexity• Products• Purpose and value
Types of Supply Chain
Logistics and Supply Chains
Logistics and Supply Chains
Logistics and Supply Chains
Logistics and Supply Chains
Logistics and Supply Chains
Supply Chain Management– Eight Processes
Customerrelationship
management
Product development& commercialisation
Supplier relationshipmanagement
Manufacturing flowmanagement
Orderfulfillment
Demand management
Customer servicemanagement
Returnsmanagement
Logistics and Supply Chains
Cranfield Five Categories of Supply Chain Risk!
Supply Chain Vulnerability
ChaosRisks
Lack ofOwnership
DecisionRisks
J.I.TRelationship
Risks
InertiaRisks
Logistics and Supply Chains
Diversification
Stockpiling
Redundancy
Insurance
Supplier selection
Localised sourcing
Rationalisation of the product range
Collaborative initiatives
Contractual obligation
Supplier development
Ten ways of Managing Supply Chain Risk
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Logistics and Supply Chains
• Inbound logistics• Operations• Outbound logistics• Marketing and sales• Service
Five Primary Activities
Porter’s Value Chain Model
Logistics and Supply Chains
Porter’s Value Chain Model
Four Support Activities • Firm infrastructure• Human resources• Technology development• Procurement
Logistics and Supply Chains
Economic or diseconomies of scale
Learning and spillovers
Capacity utilisation
Linkages among activities
Inter-relationships
Institutional factors
Geographic location
Firms policy of cost or differentiation
Timing of market entry
Degree of vertical integration
Ten Major Cost Drivers – Value Chains
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Logistics and Supply Chains
Main Steps inStrategic Cost Analysis
Identify value chain &assign costs & assets to it
Diagnose the costdrivers of each activity
Identify competitorvalue chains
Develop a strategy lowerrelative cost position
Ensure cost reductionefforts do not differentiate
Test the cost reductionstrategy for sustainability
Logistics and Supply Chains
Supply Chains – Who Runs Them?
Logistics or supply manager
Operations or production director
Logistics or supply director
Operations or production manager
Sale, finance or commercial
45%
20%
15%
14%
