Logistics Management

Introduction to the Course
Jing Yuan
Feb, 2008
Ìntroduce Yourself
Lol´s no knov vho vou aio.
Whal´s Iogislics nanagononl`
SuppIv chain nanagononl Vs. Iogislics
nanagononl
.
Outline
Inlioduco vouisoIf
Who I an
Couiso inlioduclion
÷ Course description
÷ Learning objectives
÷ Textbooks
÷ Grading policy
÷ Schedules
Outline
Inlioduco vouisoIf
Who I an
Couiso inlioduclion
÷ Course description
÷ Learning objectives
÷ Textbooks
÷ Grading policy
÷ Schedule
Course description
An inlioducloiv couiso in lho anaIvsis,
dosign and opoialion of Iogislics and
suppIv chain
Iiosonlod lhiough Iocluios aIong vilh
sovoiaI caso sludios and oxpoiinonls
Tho Iocluios consisl of nino pails
Learning objectives
KnovIodgo lho slialogic ioIo of lho suppIv
chain
An undoislanding of Iogislic svslons &
lhoii nanagononl piolIons
AliIilv lo doviso voikalIo soIulions in
lusinoss silualions
Textbooks
Toxllook
÷ Harrison, A. and Hoek, R. V. (2006) Logistics
Management, second edition, Ӫ!¨ :¹|
Rofoioncos (nol ioquiiod)
÷ Christopher, M. (2006) Logistics and Supply
Chain Management: Creating Value-adding
Network, third edition, ¬¨ :¹|
÷ Ŋ |1(¹ ģ*!:¹|
2006¬
Lecture Organization
Locluiing
Vidoos
Cioup oxoicisos
Caso discussion
Caso sludv piosonlalions
Grading Policy
Ciading
÷ Assignment and Quiz 10%
÷ Midterm 20%
÷ Final Project 70%
Midloin
÷ Case study
÷ Final presentation
IinaI piojocl
÷ A closed examination held in the last week of term
Schedule
Locluios
÷ 14 vooks
Caso sludv piosonlalions
÷ 2 vooks
Lxpoiinonls
÷ 2 vooks
Logistics and supply chain
Logistics Management
ogistics and Supp chain 1
Materia and information fow 2
Competing through ogistics 3
Logistics strateg 4
Sovon-oIovon convonionco sloio
÷ Describe the key logistics processes at 7-11.
÷ What differences between the early reform
and the regional distribution center at 7-11.
÷ What do you think are the main logistics
challenges in running the 7-11 operation.
Case study
Case study
Centralized
distribution
No
distribution
center
Built its own
distribution
center---joint
distribution
First stage Second stage Third stage
ey issues
1 1 1 1
What Is suµµ!v chaIn, and
hnw Is It structurcd?
2 2 2 2
What Is thc µurµnsc nf a
suµµ!v chaIn?
The Supply Chain Concept
DovoIopnonl of lho Concopl
÷ Total systems cost - remains an important element
of logistics analysis.
÷ Outbound logistics ÷ the warehousing and
distribution of finished goods.
÷ Ìnbound logistics ÷ the receiving and warehousing
of raw materials, and their distribution to
manufacturing as they are required.
÷ Value chain analysis integrated logistics activities.
usiness Logistics in a Firm
A suppIv chain is a gioup of pailnois vho
coIIoclivoIv convoil a lasic connodilv (upslioan)
inlo a finishod pioducl (dovnslioan) lhal is
vaIuod lv ond-cuslonois, and vho nanago
ioluins al oach slago.
The Supply Chain management Concept
Definition Definition Definition Definition
!!annIng and cnntrn!!Ing a!! nf thc µrnccsscs
that !Ink µartncrs In a suµµ!v chaIn tngcthcr In
nrdcr tn scrvc nccds nf thc cnd-custnmcr.
The process starts with
several external suppliers
that move milk, cardboard,
and plastic to the processing
plant.
After the milk is processed
and packaged, it is delivered
to retailers, who sell it to
customers. The alternative
delivery system is delivery
from a warehouse directly to
customers' homes.
Supply chain:
structure and tiering
Supply chain:
structure and tiering
Supply chain can be fairly
complex. The supply
chain for a car
manufacturer includes
hundreds of suppliers,
dozens of manufacturing
plants (for parts) and
assembly plants (for cars),
dealers, direct business
customers, wholesalers,
customers, and support
functions such as product
engineering and
purchasing.
Logistics concept
Definition Definition Definition Definition
%hc task nf cnnrdInatIng matcrIa! f!nw
and InfnrmatInn f!nw acrnss thc suµµ!v
chaIn.
Activity 1
Wheat Flour
Praline Wafers
Chocolate
Confectionery
manufacturer
Packing
Creamery
(milk)
Cocoa
beans
Sugar
Vegetable
oil
Cocoa
butter
Lecithin
Emulsifiers,
Salt, etc.
Printed
materials
Aluminium Fiberboard
Multiple
retailers
Wholesalers
Others
(hospital etc.)
End
customers
ogistics and Supp chain 1
Materia and information fow 2
Competing through ogistics 3
Logistics strateg 4
ey issue
1 1 1 1
hat is the reationship between
materia fow and information
fow?
Case study: Seven-eleven
Case study: Seven-eleven's distribution
strategy
DoIivoiv aiiivos fion ovoi 2OO pIanls
DoIivoiv is cioss dockod al DC (ovoi 8O DCs foi
food)
Iood DCs sloio no invonloiv
Conlinod doIivoiv svslon: fiozon foods, chiIIod
foods, ioon lonpoialuio and hol foods
11 liuck visils poi sloio poi dav (conpaiod lo 7O
in 1974)
No suppIioi (nol ovon coko!) doIivois diiocl
Case study: Seven-eleven`s
Ìnformation Strategy
"uick accoss lo up lo dalo infoinalion (as
conliasls vilh dala)
÷ High speed data network linking stores, headquarters,
DCs and suppliers
÷ Store hardware
÷ Store computer
÷ POS registers linked to store computer
÷ Graphic Order Terminals
÷ Scanner terminals for receiving
Ìntegrated Logistics Management
Material and information flow
Material and information flow
Material Ilow
InIormation Ilow
Activity 2
Dosciilo lho naloiiaI and infoinalion fIov in lho
suppIv nolvoik affocling ono of lho najoi
pioducls in Aclivilv 1.
ogistics and Supp chain 1
Materia and information fow 2
Competing through ogistics 3
Logistics strateg 4
ey issues
1 1 1 1
nw dn µrnducts wIn nrdcrs In
thc markctµ!acc?
2 2 2 2
nw dncs !ngIstIcs cnntrIbutc
tn cnmµctItIvc advantagc?
Creating logistics advantage: three
basic ways
Logistics advantage Logistics advantage
quality
time
cost
Creating logistics advantage:
controlling variability
Variability undermines the dependability with which a product or
service meets target.
Order winners and order qualifiers
rder winners
are factors that directly and
significantly help products to
win orders in the
marketplace.
Customers regard such
factors as key reasons for
buying that product or
services.
Different ogistics
performance
objectives
rder quaifiers
are factors that are regarded
by the market as an 'entry
ticket'.
Unless the product or service
meets basic performance
standards, it will not be taken
seriously.
Activity 3
Compare the details for characteristics of
both household appliance and mobile
phone's product lines.
Go on to identify the principal order
winners and qualifiers for each product.
's.
ogistics and Supp chain 1
Materia and information fow 2
Competing through ogistics 3
Logistics strateg 4
The value chain: Linking supply chain
and business strategy
Aew
Product
Development
Marketing
and
Sales
Operations
Business Strategv
Aew Product
Strategv
Marketing
Strategv
Supplv Chain Strategv
New product
Development
M
a
rk
et
in
g
a
n
d
s
al
e
s
Ope
ratio
ns
Distri
butio
n
Se
rvi
ce
Finance, Accounting, Information 1echnologv, Human Resources
How to Achieving Strategic Fit
&ndoislanding lho Cuslonoi
÷ Lot size
÷ Response time
÷ Service level
÷ Product variety
÷ Price
÷ Ìnnovation
How to measure?
Implied Demand
Uncertainty
Levels of Ìmplied Demand Uncertainty
etergent High Fashion
ow
High
Price
Responsiveness
:stomer Need
Implied emand Uncertainty
Understanding the Supply Chain: Cost-
Responsiveness Efficient Frontier
High
High
ow
ow
ost
Responsiveness
Achieving Strategic Fit
Implied
uncertainty
spectrum
Responsive
supply chain
Efficient supply
chain
Certain
demand
Uncertain
demand
Responsiveness
spectrum
Strategic Scope
$uppliers
Manufacturer Distributor Retailer Customer
Competitive
$trategy
Product Dev.
$trategy
$upply Chain
$trategy
Marketing
$trategy
Drivers of Supply Chain Performance
fficiencv Responsiveness
Inventorv 1ransportation Facilities Information
Supplv chain strategv and structure
Drivers
Competitive strategv
Considerations for Supply Chain Drivers
Driver fficiencv Responsiveness
Inventory ost oI holding Availability
Transportation onsolidation Speed
Facilities onsolidation /
edicated
Proximity /
Flexibility
InIormation What inIormation is best s:ited Ior
each obiective

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