Overview of Logistics

and Supply Chain

Management
TS. PHẠM THỊ TRANG
Learning objectives
• To describe Logistics and Supply Chain
Management.

•To discuss the economic impacts of logistics.

• To consider potential enablers of supply chain

management implementation

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Contents

Logistics
• Definition
• Economic utility in Logistics
• The Systems and Total Cost Approaches to Logistics
• Types of logistics
Supply Chain Management
• Definition
• Flows in supply chain
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1. Getting Started—What Is Logistics?

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Farm to Plate

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1. Getting Started—What Is Logistics?
Council of Logistics Management
definition:
“Logistics is that part of the supply
chain process that plans, implements,
and controls the efficient, effective
forward and reverse flow and storage
of goods, services, and related
information between the point of
origin and the point of consumption in
order to meet customers’
requirements.”

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 Inlogistics, if yougoanhour without a screw-up, you’vehada great day.
—Gus Pagoni

Right quantity
Right product
Right
condition/quality
7Rs in Logistics

Right place Right cost/price

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Right time Right people
What Is Logistics?
Forward Logistics

Information Exchange

Reverse Logistics

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Reverse Logistics
Suppliers Customers

• Return of goods by customers

• Return of unsold goods by distribution partners due to
contract terms
• Re-use of packaging
• Refurbishment of goods
• Repairs and maintenance as per guarantee agreements
• Re-manufacturing of goods from returned or defective
items
• Selling of goods to a secondary market in response to
returns or overstocking
• Recycling and disposal of end-of-life goods

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 Mass logistics and Tailored logistics

When companies use one logistics Mass logistics

approach to target ALL their customers.

When companies use various logistics approaches

to target various groups of their customers. Tailored logistics

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2. Economic Impacts of Logistics
 Macroeconomic Impacts

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 2. Economic impacts of logistics
 Microeconomic Impacts
A product’s being in a form that can be used by the customer and is
Form utility
Economic utility

of value to the customer

Having products available where they are needed by customers;

Place utility products are moved from points of lesser value to points of greater
value

Time utility Having products available when they are needed by customers

Possession The value or usefulness that comes from a customer being able to
utility take possession of a product

DO THI THU HA, MSC. 12

3. The Increased Important of Logistics
1. Economic deregulation
2. Changes in consumer behavior
• Customized customer
• Changing family roles
• Rising customer expectations
3. Technological advances
• Disintermediation
• Reduction of paper works
• Shipment tracking
4. The growing power of retailers
5. Globalization of trade
 1 Logistics system does not fit all companies 13
4. The Systems and Total Cost
Approaches to Logistics
• Systems Approach
– Interdependence of company and logistics goals and objectives
– Interdependence of functional areas
• Stock-keeping units (SKUs)
– Interdependence of logistics activities or
Intrafunctional logistics

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Figure 1-1: Control Over the Flow of Inbound and
Outbound Movements

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4. The Systems and Total Cost Approaches to
Logistics
• Total Cost Approach
– Cost trade-offs: changes to one activity cause some costs to
increase and others to decrease

– Total Logistics Concept: integration of all activities into a

unified whole that seeks to minimize distribution costs in a
manner that supports an organization’s customer service
objectives

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5. Key Features involved in Logistics Management
• Network design
• Order processing
• Procurement
• Material handling
• Inventory management
• Packaging and labeling
• Warehousing
• Transportation
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6. Types of Logistics
Type Description
Event Logistics The resources (facilities, people,
and infrastructures) used to
organize, deliver and execute an
event from initial schedule
through teardown and clean up.
Passenger Logistics Moving people
Military Logistics Moving groups of people and
supplies, setting up camps,
replenishing supplies and people, Vietnam
breaking camp down again and
moving it out.
Service Logistics All the people, facilities and
supplies in place to effectively
deliver services to customers.
Humanitarian Logistics Planning the effective flow and
storage of goods as well as the
exchange of information to
alleviate the suffering of people.
Examples
•Halong Festival
•Lunar New Year in Hanoi, Vietnam
•Seagame Games
•Scheduled or private airplane
flights, bus rides, highway travel
• Vietnamese People's Army
operation to liberation South
•Hair salon
•Hospital operations
•Red Cross assistance to people of
Haiti in the aftermath of the 2010
earthquake.
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Types of Logistic Operators
1PL 2PL 3PL 4PL 5PL
Depending on the
amount and level
of integration of
the services they
provide, Logistic
Operators can
range from first-
party to fifth-
party logistics
providers

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The Evolution of Supply Chain Management
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What is a Supply Chain?
A supply chain consists of the flow of products and services from:

 Raw materials manufacturers

 Component and intermediate manufacturers
 Final product manufacturers
 Wholesalers and distributors
 Retailers

Connected by transportation and storage activities, and

Integrated through information, planning, and integration activities

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 The basic stages of a supply chain

Supplier Manufacturer Warehouse Retailers Consumer

Distributor

Buy Make Move Sell Serve

things things things things things
Procurement Production Transportation
or Purchasing Inventory belong to
Warehousing
Marketing
Distribution
belong to management
Operations
management
DO THI THU HA, MSC. 22
Definitions – Supply Chain Management
Management of material and information flow in a supply chain to provide the
highest degree of customer satisfaction at the lowest possible cost. Supply chain
management requires the commitment of supply chain partners to work closely
to coordinate order generation, order taking, and order fulfillment.
- Business Dictionary -
Supply chain management is a set of approaches utilized to efficiently integrate
suppliers, manufacturers, warehouses, and stores, so that merchandise is produced
and distributed at the right quantities, to the right locations, and at the right time, in
order to minimize system wide costs while satisfying service level requirements.
- Simchi-Levi et al. (2003, p. 1) -

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Example: Stages of the detergent supply chain
Paper Packaging
Wood
supplier supplier

P&G &other Coop Mart or

Coop Mart Customers
Production Distributions

Chemical Plastic
supplier supplier

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 Flows in a supply chain
Information flow
Reverse product flow
1. Product flow

2. Reverse
product flow

3. Cash flow Supplier Manufacturer Warehouse Retailers Consumer

Distributor
4. Information Primary Secondary Secondary
Secondary
product product product product
flow flow flow flow
flow

Primary cash flow

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Homework
1. Mind map
2. Case study

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