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8/3/2019 Logistics Management Introduction
http://slidepdf.com/reader/full/logistics-management-introduction 1/37
Logistics and Supply Chain
Logistics Management
Prof. Rushen Chahal
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logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
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Seven-eleven convenience store
± Describe the key logistics processes at 7-
11.
± What differences between the early reform
and the regional distribution center at 7-11.
± What do you think are the main logistics
challenges in running the 7-11 operation.
Case study
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Case study
Centralized
distribution
No
distributioncenter
Built its owndistribution
center---jointdistribution
First stage Second stage Third stage
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Key issues
1111 What is supply chain, and
how is it structured?
2222 What is the purpose of asupply chain?
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The Supply Chain Concept
Development of the Concept ± Total systems cost - remains an important element
of logistics analysis.
± Outbound logistics ± the warehousing and
distribution of finished goods.
± Inbound logistics ± the receiving and warehousing
of raw materials, and their distribution tomanufacturing as they are required.
± Value chain analysis integrated logistics activities.
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Business Logistics in a Firm
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A supply chain is a group of partners whocollectively convert a basic commodity (upstream)into a finished product (downstream) that is
valued by end-customers, and who managereturns at each stage.
The Supply Chain management Concept
DefinitionDefinitionDefinitionDefinitionPlanning and controlling all of the processesthat link partners in a supply chain together inorder to serve needs of the end-customer.
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The process starts with
several external suppliers
that move milk, cardboard,
and plastic to the processingplant.
After the milk is processed
and packaged, it is delivered
to retailers, who sell it to
customers. The alternativedelivery system is delivery
from a warehouse directly to
customers¶ homes.
Supply chain:
structure and tiering
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Supply chain:
structure and tiering Supply chain can be fairly
complex. The supply
chain for a car
manufacturer includes
hundreds of suppliers,
dozens of manufacturingplants (for parts) and
assembly plants (for cars),
dealers, direct business
customers, wholesalers,
customers, and supportfunctions such as product
engineering and
purchasing.
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Logistics concept
DefinitionDefinitionDefinitionDefinitionThe task of coordinating material flowand information flow across the supplychain.
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Activity 1
Wheat Flour
Praline Wafers
ChocolateConfectionery
manufacturer Packing
Creamery
(milk)
Cocoa
beansSugar
Vegetable
oil
Cocoa
butter Lecithin
Emulsifiers,
Salt, etc.
Printed
materialsAluminium Fiberboard
Multiple
retailers
Wholesalers
Others
(hospital etc.)
End
customers
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logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
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Key issue
1111What is the relationship between
material flow and information
flow?
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Case study: Seven-eleven
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Case study: Seven-eleven¶s distribution
strategyDelivery arrives from over 200 plantsDelivery is cross docked at DC (over 80 DCs for
food) Food DCs store no inventory Combined delivery system: frozen foods, chilled
foods, room temperature and hot foods
11 truck visits per store per day (compared to 70in 1974) No supplier (not even coke!) delivers direct
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Case study: Seven-eleven¶s
Information Strategy
Quick access to up to date information (ascontrasts with data)
± High speed data network linking stores, headquarters,
DCs and suppliers
± Store hardware
± Store computer
± POS registers linked to store computer
± Graphic Order Terminals
± Scanner terminals for receiving
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Integrated Logistics Management
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Material and information flow
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Material and information flow
Material flow
Information flow
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Activity 2
Describe the material and information flow in thesupply network affecting one of the major
products in Activity 1.
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logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
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Key issues
1111How do products win orders in
the marketplace?
2222How does logistics contributeto competitive advantage?
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Creating logistics advantage: three
basic ways
Logistics advantageLogistics advantage
quality time
cost
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Creating logistics advantage:
controlling variability
Variability undermines the dependability with which a product or
service meets target.
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Order winners and order qualifiers
Order winnersare factors that directly and
significantly help products to
win orders in the
marketplace.
Customers regard such
factors as key reasons for buying that product or
services.
Different logistics
performance
objectives
Order qualifiersare factors that are regarded
by the market as an µentry
ticket¶.
Unless the product or service
meets basic performance
standards, it will not be taken
seriously.
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Activity 3
Compare the details for characteristics of
both household appliance and mobile
phone¶s product lines.
Go on to identify the principal order
winners and qualifiers for each product.
Vs.
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logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
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The value chain: Linking supply chain
and business strategy
New
Product Development
Marketing
and Sales Operations
Business Strategy
New Product
Strategy
Marketing
Strategy
Supply Chain Strategy
New product
Development
Ma
rk
et
in
g
an
d
s
al
e
s
Ope
rations
Distri
bution
Se
rvice
Finance, Accounting, Information Technology, Human Resources
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How to Achieving Strategic Fit
Understanding the Customer ± Lot size
± Response time
± Service level
± Product variety
± Price
± Innovation
How to measure?Implied Demand
Uncertainty
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Levels of Implied Demand Uncertainty
Detergent High Fashion
Low High
Price Responsiveness
Customer Need
Implied Demand Uncertainty
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Understanding the Supply Chain: Cost-
Responsiveness Efficient Frontier
High
High
Low
Low
Cost
Responsiveness
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Achieving Strategic Fit
Implied
uncertainty
spectrum
Responsive
supply chain
Efficient supplychain
Certain
demand
Uncertain
demand
Responsivenessspectrum
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Strategic Scope
Suppliers Manufacturer Distributor Retailer Customer
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
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Drivers of Supply Chain Performance
E fficiency Responsivenes
Inventory Transportation Facilities Information
Supply chain strategy and structure
Drivers
Competitive strategy
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Considerations for Supply Chain Drivers
Driver E fficiency Responsiveness
Inventory Cost of holding Availability
Transportation Consolidation Speed
Facilities Consolidation /
Dedicated
Proximity /
FlexibilityInformation What information is best suited for
each objective