A Framework for Supply Chains - Oakden chapter 03

PPTs t/a A Framework for Supply Chains by Oakden and Leonaite © 2011 McGraw-Hill Australia Pty Ltd

Chapter 3

Logistics in Practice

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IntroductionLearning Outcomes

After this lesson, you should be able to:• recognise the main types of logistics applied in

product and service organisations• understand the essentials concerning logistics within

different industries and sectors• appreciate the various approaches required to

understand and overcome logistics challenges• comprehend the broad range of skills that a

logistician should possess• understand the possible career choices available in

logistics.

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Different Logistics

Product-based logistics• Enterprises that make and sell consumer goods

are engaged in business logistics.• Reverse logistics – retrieving from customers

and consumers the products and materials that are no longer required.

Service-based logistics• Support logistics is integral in military

environments, continuous production operations and major service facilities.

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Logistics Challenges within Industry Sectors

Branded products companies• A brand is a collection of symbols, experiences

and associations connected with a product or service.

• Branded products are contrasted with ‘private label’ products.

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Consumer products• Within consumer product companies there are

two distinct product types:

1. Consumer packaged goods (CPG) – companies make and sell non-durable goods, typically food-based and are controlled by a ‘use by’ date

a) short shelf-life products

b) cool chain products.

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Consumer products• Fast moving consumer goods (FMCG) –

companies make and sell durable consumer goods, such as electronics, household products and apparel.

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Automotive• Cars are typically designed and assembled by

brand companies and sold through their accredited dealers.

• Supply chains can therefore be more controlled by the powerful vehicle assemblers.

• Depending on the design, cars can consist of 10 000 parts or more.

• Just in time (JIT) – focus on removing waste from the system.

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Retail Logistics• Logisticians can more accurately forecast

consumer demand, optimise the inventory and improve speed and agility of the supply chains by using logistics IT applications such as:

financial planning for the merchandise purchases buying and product assortment management store allocation of products inventory replenishment and analysis to forecast

sales and optimise inventory volumes.

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Traceability of Products• Product traceability – requirements of products

that require specific traceability and recording through the supply chains.– Examples: pharmaceuticals and halal products

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Industrial products• ‘business to business’ (B2B) products are

purchased by industrial companies for their own use, such as machines to be used in the manufacturing process.

• Industrial products are less likely to be held in inventory; instead they tend to be ‘engineer to order’ or ‘make to order’.

• Product service comprises the group of logistics activities used to support products and assets over their life, following the purchase.

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Military Logistics

In the military context, there are two types of

support:

1. Deployment logistics: incorporates the moving of and providing for troops with the necessary shelter, food, uniforms and munitions relating to the deployment of forces in hostile, peace-keeping and humanitarian situations.

2. Materiel logistics: term ‘materiel’ is derived from the French matériel, meaning equipment or hardware and incorporates integrated logistics support (ILS).

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Military Logistics• Integrated logistics support (ILS) management –

process of planning, directing, controlling, coordinating and monitoring ILS activities. This includes support elements to ensure that the integration objectives of ILS are achieved, such as:

engineering support maintenance support supply support training support packaging, handling, storage and transport buildings and infrastructure facilities.

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Military Logistics• Great diversity of specialisations in military

logistics makes people marketable within civilian organisations when they have completed their military service. For example:

Risk assessment is vital in planning a military system.

Logisticians need to deal with problems that require the use of optimisation applications and other IT support tools.

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Military Logistics Logisticians are able to model the tangible and

intangible elements to best align the assets of the supply network in support of the required service levels and performance commitments.

Procurement of complex systems can be a long and detailed process, requiring extensive development of specifications and negotiation with suppliers.

Logisticians negotiate performance-based contracts (PBC), called performance-based logistics (PBL) in the military.

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Support Logistics (Commercial)• Industrial operations can be large and expensive,

such as petrochemical, steel, aluminium and mining, and at large service facilities such as major airports.

• Support logistics companies provide on-site servicing and repairs.

• Product service for consumer products (also called after-sales service) is often the forgotten part of customer service.

• Supply chains for support logistics can be very complex since products sold on global markets.

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Role of the Logistician

• Capability to identify, understand and, wherever possible, reduce uncertainty, variability and complexity in the supply chains and manage risk in logistics.

Essential attributes required of a logistician: a capacity for critical thinking an ability to analyse the numbers and know when

there is an error the skill to project manage the implementation of

the proposed course of action.

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Role of the Logistician Careers in Logistics

• Term ‘logistician’ is very broad, incorporating a range of industry applications and a variety of specific roles. Logisticians can be involved as:

analysts who measure and interpret the performance of supply chains and analyse data to evaluate operating performance

operational staff who make plans and schedules happen IT and communication technology staff management staff overseeing the relationship and performance

of LSPs management staff overseeing the relationship with customers commercial staff who negotiate with suppliers sales logisticians working within LSPs.

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Education

A Framework for Supply Chains - Oakden chapter 03