Supply Chain Logistics Management

• Importance of Logistics to Business

• Logistics Value Proposition
• The Work of Logistics
• Logistics Operations
• Logistics Operating Structures
• Supply Chain Logistics Performance

Supply Chain Logistics Management

• Scope of Logistics
• Logistics Operations

Supply Chain Logistics Management

• Scope of Logistics
• Logistics Operations

Supply Chain Logistics Management

• Scope of Logistics
• Logistics Operations

Supply Chain Logistics Management

 Importance of Logistics to Business

• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive
Advantage (SCA)

Supply Chain Logistics Management

 Importance of Logistics to Business

• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive
Advantage (SCA)

Supply Chain Logistics Management

 Importance of Logistics to Business

• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive
Advantage (SCA)

Supply Chain Logistics Management

 United States Logistics Costs
100 1980
0900  GDP $2.88 trillion
800  Logistics Cost $451 billion
700
 15.7% of GDP
$ billion

600
 Trans. Cost $214 billion
 47.5 % of Logistics Cost
500
400
1999
300
 GDP $9.26 trillion
200  Logistics Cost $921 billion
100  9.9% of GDP
0  Trans. Cost $554 billion
1980 Year 1999
 60.2 % of Logistics Cost
Logistics Transportation

Source: Robert V. Delaney, 11th Annual “State Of Logistics Report” © June 5, 2000
 Importance of Logistics to Business

• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive
Advantage (SCA)

Supply Chain Logistics Management

 Logistics Value Proposition

• Service
• Cost Minimization

Supply Chain Logistics Management

 Logistics Value Proposition

• Service
• Cost Minimization

Supply Chain Logistics Management

 Logistics Value Proposition

• Service
– Logistics Service Quality Process Dimensions
– Logistics Service Quality Outcome Dimensions
• Cost Minimization

Supply Chain Logistics Management

 Logistics Value Proposition

• Service
– Logistics Service Quality Process Dimensions
• Procedures
• Contact
• Information
• Discrepancy
– Logistics Service Quality Outcome Dimensions
• Cost Minimization

Supply Chain Logistics Management

 Logistics Value Proposition

• Service
– Logistics Service Quality Process Dimensions
– Logistics Service Quality Outcome Dimensions
• Timeliness
• Availability
• Condition
• Accuracy
• Cost Minimization

Supply Chain Logistics Management

 Logistics Value Proposition

• Service Benefits
• Cost Minimization

Supply Chain Logistics Management

 The Work of Logistics

• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling,
Packaging
• Facility Network Design

Supply Chain Logistics Management

 Integrated Logistics

Order
Processing

Facility
Inventory
Network

Warehousing,
Material Handling Transportation
 The Work of Logistics

• Order Processing
– order receipt, order assembly, order delivery,
invoicing & collection
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design

Supply Chain Logistics Management

 The Work of Logistics

• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design

Supply Chain Logistics Management

 The Work of Logistics

• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design

Supply Chain Logistics Management

 The Work of Logistics

• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
– sorting, sequencing, product modification &
assembly, and transportation consolidation
• Facility Network Design

Supply Chain Logistics Management

 The Work of Logistics

• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design

Supply Chain Logistics Management

 Logistics Operations

Inventory Flow

Enterprise

Customer Manufacturing Procurement

Customers Suppliers
Service Support (Purchasing)

Information Flow
 Logistics Operations

• Inventory Flow
– Customer Service
– Manufacturing Support
– Purchasing (procurement) Support
• Information Flow

Supply Chain Logistics Management

 Logistics Operations

• Inventory Flow
• Information Flow

Supply Chain Logistics Management

 Logistics Operating Structures

• Echelon
• Direct
• Combined

Supply Chain Logistics Management

 Logistics Operating Structures

• Echelon
• Direct
• Combined

Supply Chain Logistics Management

 Echeloned Structured Logistics

Wholesaler’s
Storage or
Warehouse
Consolidation
Supplier Manufacturer or Retailer Customer
Warehouse
Distribution
Center
 Logistics Operating Structures

• Echelon
• Direct
• Combined

Supply Chain Logistics Management

 Logistics Operating Structures

• Echelon
• Direct
• Combined

Supply Chain Logistics Management

 Combined Echelon and Direct Structured
Logistics

Wholesaler
Storage or Warehouse
Supplier Consolidation Manufacturer or Retailer Customer
Warehouse Distribution
Center

Direct Delivery
 Supply Chain Logistics Performance

• Performance Cycle Structure

Supply Chain Logistics Management

 Sources of Performance-Cycle Variation
Total Performance Cycle

5 10 40
Customer
Delivery Time Range - Days Order
Transmission
1/2 1 3
Time Range - Days 1/2 1 3
Time Range - Days

Order
Transportation Order
Processing
2 4 10
Time Range - Days Order
Selection 1 2 4
Time Range - Days
1 2 20
Time Range - Days