Introduction to LOGISTICS & Supply Chain Management Qafqaz
University Center for Entrepreneurship Development and Research
Ahmad Badalov Research Assistant, Member of CEDR Slide 2 Simple
Description of Logistics The easiest understanable definition is
below and known as 7R Collection of activities to deliver the Right
amount of Right material to the Right consumer at the Right
conditions at the Right place at the Right time at the Right cost
Logistic is responsible for flow of materials along the supply
chain, Slide 3 The Role of Logistics Logistics is responsible for
the flow of material : material from suppliers into organizations,
through operations within organizations, and to customers External
supplier Operations within organizations External customers
Internal supplier Internal customer Materials management Logistics
Inbound logistics Outbound logistics Slide 4 Supply Chain is a
series of activities which provide the flow of goods and services
from initial suppliers to manufacturer and final customers. More
complex logistics system in which raw materials are converted into
finished products and then distributed to the final users
ORGANISATION Upstream activitiesDownstream activities 1. tier
supplier 2. tier supplier 3. tier supplier Initial supplier 1. tier
customer 2. tier customer 3. tier customer final customer Slide 5
Slide 6 6/33 Slide 7 CHAPTER 2 INTEGRATING the SUPPLY CHAIN Slide 8
Pressure to improve logistics Besides economical benefits, other
factors also encourage to improve logistics. These are;
Knowledgeable customers, Fierce competition, Large retail chains,
Changes in retail markets, Growing in international trade, New
types of organizations, Improvements in communications Outsourcing
peripheral activities, Increasing co-operations Slide 9 9-18
Factors Effective in Logistics Development in communication
communication Customer relations Customer Other important factors
Globalizations Globalizations Outsourcing Outsourcing Postponement
Cross-docking Cross-docking Direct delivery Other stock reduction
methods Increasing environmental concerns More collaboration along
supply chain Slide 10 Integrating Logistics Related activities add
value to the final products, These are managed seperately, Their
aims might be conflict, These conflicts cause some problems
Operations Warehousing Stock control Materials handling
SuppliersCustomers Procurement Inward transport Receiving Picking
Consolidating Physical distribution Outward transport returns Slide
11 Integrating Logistics These problems are; Different, often
conflicting objectives within organization Duplicating effort and
reducing productivity Worse communications and information flows
between the departments Reducing co-ordination between parts
Increasing uncertainty and delays along the supply chain Making
planning more difficult Introducing unnecessary buffers between the
parts, Obscuring important information, such as total logistic
costs Giving logistics a low status within an organization Slide 12
Integrating Logistics The obvious way of avoiding these problems is
to consider logistics not as a series of distinct activities, but
as a single integrated function Then all parts work together to get
the best result, It is difficult to integrate all the logistics but
it can be three levels of integration: Separate activities
Integration within the organization Integration along the supply
chain Integration Slide 13 Benefits of Integration of Logistics
Genuine co-operation between all parts with shared information
Lower cost due to balanced operations, lower stocks, less
expediting, Economies of scale Elimination of activities that do
not add value. Improved performance due to Accurate forecasting,
Better planning, Higher productivity of resources.. Improved
material flows Better customer service, with shorter lead times,
faster deliveries More flexibility, organizations reacting faster
to changing conditions Standardized procedures, becoming routine
and well-practiced with less duplication of effort, information,
planning, so on Reliable quality and fewer inspection, with
integrated quality management programs Slide 14 What is Materials
All the things that an organization moves to create its products.
Power station : brings coal from a mine, Farmer : moves potatoes to
a wholesaler, TV company : delivers entertainment to its viewers So
on.. raw materials, components, finished products, people,
information, paperwork, messages, knowledge, money, energy and
anything else needed by operations.. Slide 15 Slide 16
Communications Describe product, Demand price, Fill order form,
Confirm order, Contract terms, Things to do in order to buy
something Shipping papers Financial arrangements, Delivery details,
Special conditions, invoices, etc. In the past, all of these had to
be printed and posted between organizations, lots of
paperworkpaperwork In 1990s EDI introduced to make things
easier,EDI After the e-mails, e-purchasing, e-procerument and
e-everything developed item coding (barcode) ve EFT have been
developed to support EDIbarcodeEFT EDI: prepares order; barcode
follows movement; EFT pays Slide 17 operations Logistics activities
SuppliersCustomer Suppliers Operations Customers Suppliers
Operations Customers Integration within the organizations
Integration along the supply chain Logistics Integration Levels
SuppliersCustomer Customers Slide 18 Slide 19 Slide 20 Raw
Materials Supplier Manufacture/Process Distrubition Customer
Consumer Slide 21 Slide 22 Paperworks Slide 23 EDI ( Electronic
Data Interchange ) Slide 24 Barcode Slide 25 QR_Code Quick Respond
Code) Slide 26 EFT (Electronic Fund Transfer) Slide 27 Customer
Relations Logistics costs needs to be lowered in order to be
competitive Lower transport costs make the product feasible to sell
over a wider geographic area What is important for customer: Lead
time (time between ordering and receiving) Costs Slide 28 28
Outsourcing Slide 29 Cross-Docking
