UNIT 3

PAPOT Valérie
2020-2021
LOGISTICS CONCEPTS
 1) What is a
supply
chain?
Basically, the supply chain represents the
stages of sourcing, the production process
and the distribution of goods. It is made up of
different flows. These are called physical
flows, information flows, and financial and
administrative flows. The main issue is
therefore flow management.
a) Capture
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b) Watch the video
“What is logistics management”:

https://www.youtube.com/watch?
v=4-QU7WiVxh8

c) Get ready to explain

each key element!
2) THE SUPPLY CHAIN REVOLUTION
 a) Text
The supply chain is a long and complex network with many flows that involve different
people, goods, information and cash at each stage
As a product passes along the supply chain, its movement from one stage to the next is
triggered by a need, then a transfer of information, when the customer places an order.
To understand how the logistic world is organized, it is necessary to analyze the two
main trends which have deeply impacted the world we are living in.
Now all along the supply chain, the different links work closely together and ‘Just
in Case’ is replaced by ‘Just inTime’. Less waste and stock, more responsive
strategies are the common tools logisticians use to reduce costs and save money. It
is summed up as the ‘no demand, no production’ strategy. And consumers have no
other choice but to wait up to two or three months before receiving their new car
or table. This new concept often causes more stress to all the partners who are
supposed to satisfy their customers as much as they can, without knowing what
they will do tomorrow.
 

Twenty years ago, the only way to stop the chain breaking down was to make and store
enough of everything to cope with most eventualities – a ‘Just in Case’ approach.
Problems could still arise though, goods were lost in a warehouse for example. Response
time was slow at every stage, and enormous costs were tied up in holding so much
stock. Yet, customers could always go back home with the TV or the sofa they had just
bought.

Today this strategy seems totally archaic. This radical change is due to two main
elements which have fuelled a revolution in logistics. One is the rapid development of
computers and information technology and their application to logistics and distribution.
The second is a drive towards better standards of customer service.

Instructions : Read the text and complete 2) b) d) e)

b) The supply chain flows

The Supply chain is based on movements of :

- Customer
- Supplier
- Producer
- Return of
products by the
customer
 c) Logistics sequences
A customer • Supply / replenishment
places an order • Transport
•
which triggers / Production
• Quality control
provokes a • Storage
sequence of • Delivery
logistics • Consumption
• Reverse logistics
flows
d) Who are the partners?
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 STEPS LINKS
1/ Order Customer
e) The Supply chain steps and links 2/ Procurement Supplier
3/ Supply Delivery Person
4/ Shipping Supplier
5/ Receiving Stock Manager
6/ Warehousing Manufacturing
7/ Production / Manufacturing Customer
8/ Quality control Order Preparer
9/ Picking Packaging
10/ Packing Packaging
11/ Labelling Storer
12/ Storage Shipper
13/ Freight forwarding Law
14/ Customs Distributor
15/ Distribution Wholesaler
16/ Wholesaling Distributor
17/Retailing Delivery Person
18/ Delivery Marketing
19/ Consumption Customer
20/ After sales service Customer
21 / Claims Customer
22/ Reverse logistics
3) LOGISTICS CONCEPTS :

a) Define the “Just in Case” strategy : It is a traditional production model, in which products are created in advance and beyond demand.
b) List the positive and negative points of this strategy :

Pros : Cons :
- No waiting period for the customer - High stock costs
- No load break - Risk of unsold
- Anticipate demand - No flexibility
- Takes up space
- Risk of loss if the product is perishable
c) Explain the “Just in Time” strategy
This strategy is based on a simple idea : It is a method which makes that
one produces at the request of the customer.
Things started to change thanks to 2 major elements :
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The JIT strategy is an inventory method where materials are only

ordered and received as they are needed in the production process.

d) The goals are :

- To have as little stock as possible
- Reduce inventory costs
- The stock takes up less space
- Reducing the costs of raw material
purchases
- Avoids the loss of perishable products
 All along the chain, the partners are informed each time there is a
movement.
For instance, when they go to the supermarket, consumers give a lot of
information to supermarkets concerning their tastes and habits. This is
possible thanks to a check-out operator who scans each product. Each
element is registered to help them forecast and organize sales and
production trends and replenishments since the information is, then sent to
the manufacturers, suppliers and producers.

Pros : Cons :

- product adapted to the consumer - mass surveillance

- allows to predict a quantity of production - intrusion into privacy
- data sale
4) What can
interrupt a
supply chain ?
 a) Find as many causes as possible

- Outdated software
- ….
WHAT

CAN

INTERRUPT

SUPPLY

CHAIN

?
b) Consequences:
- Dissatisfied customers
- You lose customers
- Damaged company’s image
- Delayed deliveries
- Wasted money
- Bankruptcy
- Time waste
5) Quality
solutions
a) The Ishikawa / Fishbone diagramme
This strategy is used to root causes that potentially contribute to a particular effect

Find the verbs you will need to talk about quality strategies:
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b) THE 5S

Match the synonyms with the 5S verbs:

Clean
Organize
Select
Eliminate
Choose
Stick
Systematize
Keep
Regulate
Tidy
Optimize
Glow