19-Nov-18

Learning Goals

Topic 1: Introduction to
To understand concepts of logistics and supply chain
Logistics Management
To provide an overview of logistics channel
Lecturer: Tran Le anh duy

To analyse the increased importance of logistics

To discuss the economic impact of logistics

Shaping the supply chain of the Twenty-First

Century: Evolution and Change

❖ Definition of Supply Chain

❖ Supply Chain management
❖ Definition of Logistics
Table of Content
❖ Logistics adds value External Change
Drivers
❖ Logistics activities
❖ Case study

Supply Chain Example

Supply Chain

Suppliers Manufacturers Distributors Wholesalers Retailers

Physical goods flow

Information flow

Finance flow

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Types of SCM

Vertical Integration
Materials to
make an Iphone
Lateral/ Horizontal Integration

Arranging these channels to

know the order of the
process of transferring a
product from the beginning
to the end

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Introduction of Logistics Logistics adds value

Definition: part of the supply chain process that plans, implements and controls the
efficient and effective flow and storage of resources from the point of origin to the point
of consumption in order to meet the final customer’s demands  The four principle types of
economic utility which add Logistics
The 7 R’s: value to a product or service: Place utility Production
1. Right product • Form: What Time utility Form utility
2. Right quantity
• Time: When
3. Right condition
4. Right customer • Place: Where
Marketing
5. Right place • Possession: Why
Possession utility
6. Right time
7. Right cost

Role of Logistics in Supply Chain:

Logistics Value Propositions

To achieve customer
satisfaction level at the
lowest total costs

Combination of Supply Chain and Logistics Logistics Companies

VIETNAM LOGISTICS MARKET
SHARE
Local International

20%

80%

Logistics share the goal of SCM to

meet CR

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System Approach to Logistics

Mass Logistics vs Tailored Logistics

Finance

Marketing

LOGISTICS
Mutual
Warehousing
Interdependence

Accounting
Decision made by one functional area should
consider the potential implications on other
functional areas
Production

Total Cost Approach to Logistics Third Party and Fourth Party Logistics
Third Party Logistics
 All relevant activities in moving and storing products should be considered as a
whole, not individually.
(3PLs)
 Trade-off

Fourth Party Logistics

(4PLs)

Logistics activities: Demand management

Logistics activities
 Definition: Demand management means forecasting and aligning the stake holders
 Demand management, order management and customer service of the supply chain
 Inventory management ⬜ Problems in achieving goal:
• Lack of coordination between departments
 Warehousing management
• Too much emphasis on forecasts of demand, with less attention on the
 Packaging and material handling collaborative efforts and the strategic and operational plans
• Demand information is used more for tactical and operational than for
 Transportation management strategic purposes
 Facility location
 Customer service
Reverse Logistics
 Return good handling
 Parts and service support

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Logistics activities: Demand Logistics activities: order management

management and customer service

is a distribution channel phenomenon in which forecasts

1 Product availability
Bullwhip yield supply chain inefficiencies. It refers to increasing
Effects swings in inventory in response to shifts in customer 2 Financial impacts
demand as one moves further up the supply chain.

3 Order cycle time

4 Logistics operation responsiveness

5 Logistics System Information

6 Post sale logistics supports

* CRM: Customer relationship management

Logistics activities: Customer Service Logistics activities: Inventory management

Definition: Inventory management refers to the process of ordering, storing and
• Days sale outstanding • Approval exceptions to
standards: using a company's inventory: raw materials, components and finished products.
• Total delivered costs:
cost of goods, 1. Minimum order
transportation costs, quantity
2. Change order timing 1. How do I calculate the “right amount” of inventory to stock?
material handling costs
2. How do I determine the “right price” for my inventory?
3. How do I know the reorder point for new inventory?

Time Cost Quality Others

• Customer satisfaction
• On time delivery • Perfect order fulfillment:
• Order cycle time on time delivery, accurate
• Response time invoice, accurate product
• Forecasting time selection

Logistics activities: Packaging and material

Logistics Activities: Warehousing handling
Management  How product characteristics affect packaging and material handling?
 What are issues of lacking environmental protection in packaging and packaging
 Warehouse management refers to the various processes related to maintaining inefficiencies?
and controlling a business’ warehouse
 What are material handling equipment?

Receiving Storing Shipping

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Logistics activities: Transportation Humanitarian Logistics

 Logistics for non-profit situations

Supply chain

Logistics activities: Reverse logistics

Challenges of Humanitarian Logistics
What is reverse logistics?
 It is for all operations related to the reuse of products and materials. It is "the process
of moving goods from their typical final destination for the purpose of capturing value,
or proper disposal.
 The ultimate goal to optimise or make more efficient aftermarket activity, thus saving
money and environmental resources

Logistics
activities:
Reverse
logistics