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LOGISTICS AND SUPPLY

CHAIN MANAGMENT
Presented by:
DEEPTI
Logistics
• Science of managing (controlling)
the movement and storage of
goods (or people) from acquisition
to consumption.
• Goods: Raw Materials  Final products,
and everything in between.
• Movement = Transportation (between
locations).
• Storage = Inventory, Warehousing (at
Definition by Council of
Logistics Management, 1998
• ….is that part of the supply chain
process that plans, implements, and
controls the efficient, effective flow
and storage of goods, services, and
related information from the point-of-
origin to the point-of-consumption in
order to meet customers'
requirements.
Logistics – Mission [A Bill of
“Rights”]
• Logistics embodies the effort to
deliver:
– the right product
– in the right quantity
– in the right condition
– to the right place
– at the right time
– for the right customer
– at the right cost
Activities and Logistics
Decisions
Transportation
rate and contract negotiation
mode and service selection
routing and scheduling

Inventories
finished goods policies
supply scheduling
short term forecasting

Warehousing
private vs. public
space determination
warehouse configuration
stock placement
• Facility Location
determining location, number
and size of facilities
allocating demand to facilities

• Customer Service
– determining customer wants
– determining customer response to service changes

• Materials Handling
– equipment selection
– equipment replacement
– order picking procedures

• Packaging design

• Order Processing
– order procedure determination
• Production Scheduling
Components of logistics
management : Management actions
Outputs of
Planning Implementation Control logistics
Inputs into logistics
Natural resources Marketing
(land, facilities, Logistics management orientation
and equipments) Suppliers Raw In-process Finished Customers (competitive
materials inventory goods advantage)
Human resources Time and
place utility
Logistics Activities
Financial resources Efficient
movement to
customer
Information
resources
Proprietary
asset
The Logistics (Strategic) Planning Triangle

Strategy/Control Which mode?


system? Which carrier?
How much? Which route?
Where? Shipment size and
frequency?

Where?, How
many? What size?
Allocation?
What is a supply chain?
• Raw materials
• Suppliers
• Manufacturers
– WIP
• Warehouses
• DCs
• Retail outlets
Cycle View of Supply
Chains
Custome
r
Customer Order
Cycle
Retaile
Replenishment r
Cycle
Distributo
r
Manufacturing
Cycle
Manufacture
r
Procurement
Cycle
Supplie
r
The Supply Chain
Supplie Manufacture Warehouses & Custome
rs rs Distribution rs
Centers

Transportati Transportati
on on
Material Costs Costs Transportati
Costs Manufacturing Inventory on
Costs Costs Costs
What is SCM?
• The efficient integration of suppliers,
factories, warehouses and stores so
that merchandise is produced and
distributed
– in the right quantities
– to the right locations
– at the right time
Why Is SCM Difficult?

• Uncertainty is inherent to every supply chain


– Travel times
– Breakdowns of machines and vehicles
– Weather, natural catastrophe, war
– Local politics, labor conditions, border issues

• The complexity of the problem to globally optimize


a supply chain is significant
– Minimize internal costs
– Minimize uncertainty
Supply Chain Management – Key Issues

Source: Simchi-
Supply Chain Management – Benefits
• A 1997 PRTM Integrated Supply Chain
Benchmarking Survey of 331 firms found significant
benefits to integrating the supply chain

Source: Cohen &


Roussel
The Value Chain: Linking
Supply Chain and Business
Business Strategy

New Product Marketin


Strategy g Supply Chain Strategy
Strategy

Finance, Accounting, Information Technology, Human Resources


Flows in a Supply Chain

Informatio
n
Product
Customer
Funds

Supply Chain
“Supply Chain Management” is Much
More
“Demand “Focal “Supply
Management” Firm” Management”
Demand
Procurement
Planning
Operations
(Product or Service)
Outbound Strategy Inbound
Logistics Logistics

Process Design and


Customer Sales Management Supplier
Relationship Order Relationship
Management Mgt. Project Management
Management

Financial
Resource Management

Supply Chain Integration


05/30/09 Source:
Source:John
C. JohnLangley, Jr., Georgia
Langley, Jr., Ph.D, Ph.D.,Tech,
Georgia
2002. Tech 19