Overview of Logistics and Supply Chain

Management

Unit Coordinator: IOANNIS Dermitzakis

Business School
University of Bedfordshire
 Reading List
• Text Books

1) Purchasing and Supply Chain Management – 8th Edition; By: Kenneth Lysons and Brian Farrington; Publisher: FT
Prentice Hall
2) Strategic Purchasing and Supply Chain Management; By: Malcolm Saunders; Publisher: Pitman Publishing
3) Improving Purchasing Performance; By: Russell Syson; Publisher: Pitman Publishing
4) Storage and Supply of Materials – 6th Edition; By: David Jessop and Alex Morrison; Publisher: Pitman Publishing
5) Logistics Management and Strategy; By: Alan Harrison and Remko van Hoek; Publisher: Prentice Hall
6) Integrated Materials Management; By: R.J. Carter and P.M. Price; Publisher: Pitman Publishing
7) Logistics and Supply Chain Management - 2nd Edition; by M. Christopher ; Publisher: FT Prentice Hall
• 8)Supply Chain Collaboration- Roles of Interorganizational Systems, Trust, and Collaborative Culture, Authors
-  Cao, Mei, Zhang, Qingyu.  
• 9)Supply Chain Performance - Collaboration, Alignment and Coordination, Edited by Valerie Botta-Genoulaz,
Jean-Pierre Campagne, Daniel Llerena, Claude Pellegrin. 
• 10)Supply Chain Collaboration - How to Implement CPFR® and Other Best Collaborative Practices, By Ronald
Ireland with Colleen Crum 
• 11)Food Supply Chain Management -Issues for the hospitality and retail sectors Edited by:Jane F. Eastham, Liz
Sharples and Stephen D. Ball 
• 12)Food Supply Chain Management - Editors –Michael A. Bourlakis and Paul W. H. Weightman
•  
 Reading List
• Academic Journals
1) Supply Management - Chartered Institute of Purchasing and Supply
2) Harvard Business Review
3) International Journal of Operations and Production Management
4) International Journal of Logistics Management
5) Journal of Purchasing & Supply Management
6) Supply Chain Management: An International Journal
7) Journal of Supply Chain Management
8) European Journal of Purchasing & Supply Management
9) European Management Journal
10)The Economist

• Websites
1) Chartered Institute of Purchasing and Supply - www.cips.org
2) Global Supply Chain Associates - www.gsca.com
3) International Journal of Logistics Management - www.logisticssupplychain.org
 Searching Journals on SCM

• Try to identify journal articles on different databases on

SCM and table them:

 Emerald insight
 Springer
 Taylor & Francis
 Science direct
 Sage
 Scopus
 Session Objectives

 Understand the role and importance of Supply Chains

and Logistics
 Define logistics systems from several perspectives
 Understanding SCM
 Compare logistics management and supply
chain management
 Sustainability in SCM
 Case study

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 The evolution of Logistics &
SCM
• Increased competition leading to fall in product prices
• Deregulation of transportation
• Increasing demands of consumers throughout the
world
• Technological improvements
• Emphasis on inventory reduction
 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.”

Source:
clm1.org
 What is Logistics?

• The Chartered Institute of Logistics and Transport (CILT)

describes logistics as:

• “Getting the right product to the right place in the right quantity at
• the right time, in the best condition and at an acceptable cost”.
 What is Logistics?
• Mangan et al., (2010, p – 9) defines logistics as;

• “Logistics involves getting, in the right way, the right product, in

• the right quantity and right quality, in the right place at the right
• time, for the right customer at the right cost.”
 What is Logistics?
• It was once described as “just trucks and sheds
(warehouses) but now it is much more than that.
Logistics Cycle
 Transportation
Transportatio Transportatio Customer
n Warehousin
n s
g
Informatio
n flows
Factor
y

Transportatio
n

Vendors/plants/
Warehousin Transportatio ports
g n
6
 The 7 R’s of Logistics

A logistics system must get

 the RIGHT good

 in the RIGHT quantity
 in the RIGHT condition
 to the RIGHT place
 at the RIGHT time
 for the RIGHT cost
 Logistics Activities

Order fulfillment - completing customer

orders, affects lead time
Forecasting - predicting inventory necessary
to fulfill customer demand
Production planning - product necessary to
cover market
Purchasing - procurement of supplies,
affects transportation

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 Logistics Activities
Transportation - physical movement or
flow
of goods
Storage - inventory management and
warehousing
Packaging - affected by product
and transportation
Materials handling - movement in,
from, and
within a warehouse

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 Increasing Significance of
Logistics
 Costsare high
About 10.5% of GDP domestically
About 12% of GDP internationally
A range of 4 to 30% of sales for individual firms,
avg. about 10%
A high as 70-80% of sales if purchasing and
production are included
 Customers are more demanding
Desire for quick response
Desire for mass customization

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 Increasing Significance of
Logistics
An integral part of company strategy
Generate revenue
Improve profit

Logistical lines/SCs have become longer

Local vs. long distance supply
Globalization of trade

Consider environmental/sustainable issues

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 Logistics
Strategy
The objectives of logistics strategy
Minimize cost
Minimize investment
Maximize customer service

Logistics must emphasize on quality

and meeting customer requirements

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 Benefits of logistics management

• It helps in making the right quantity of right quality

products at the right place and at the right time in right
condition.
• It aims in customer satisfaction by reducing the
operations cost and passing on the benefits to the
customer.
• It helps in penetrating new market by increasing
market share and increasing profits.
• It helps in globalisation .
•Supply Chain
What is Supply Chain?
 What is a supply chain?

• Mangan et al., (2010, p – 10) defines supply chain

as;

• “The Supply Chain is the network of organisations that

are involved, through upstream and downstream
linkages, in the different processes and activities that
produce value in the form of products and services in the
hands of the ultimate consumers.”
 Dairy Supply Chain

From cow to customer (Harrison & van Hoek,

2014)
Definition of supply chain
management

• How many could you find?

 Defining Supply Chain

Life cycle processes comprising physical, information, financial,

and knowledge flows whose purpose is to satisfy end-user
requirements with products and services from multiple linked
suppliers. - Kasarda (2001)
Supply Network
 Defining SCM

The management of all activities, information, knowledge and financial

resources associated with the flow and transformation of goods and services up
from the raw materials suppliers, component suppliers and other suppliers in
such a way that the expectations of the end users of the company are being met
or surpassed (Lysons and Farrington, 2006).

SCM is a philosophy of management that involves the management and

integration of a set of selected key business processes from end user through
original suppliers that provides products, services, and information that add
value for customers and other stakeholders through the collaborative efforts of
supply chain members. (Ho et al., 2002).

The management of upstream and downstream relationships with suppliers and

customers to deliver superior customer value at less cost to the supply chain as
a whole (Christopher, 2011).
Types of Supply chain

Type of Channel
Relationship
 What does SCM include?

Logistics management
inventory, warehousing, transportation, and distribution
management

Manufacturing operation management

procurement management, manufacturing management, and
market distribution management

Information systems management

Financial management

Customer management

Relationship management
Portfolio of Supply Chains

Manufacturer

Wholesaler

Retailer

Consumer
• (van Weele, 2006)
 The Roles of SCM

Manage entire chain as a system

Reduce inventory levels

Reduce cycle times and delays

Share information (partnerships)

Compete on customer service rather than price

cuts and promotions
Popular concepts in SCM
 Value Chain Concept

Typical business organization adds value, which is conceived

by the customer, to goods or services through certain primary
activities and supporting activities.

A value chain is a set of activities that an organization carries

out to create value for its customers

Competitive advantage cannot be understood by looking at a

firm as a whole. It stems from performing the strategically
relevant activities more cheaply or better than its competitors
(Porter, 1980)
Porter’s Value Chain Model
 Hau Lee: Triple-A Supply Chain

Agility – Responsiveness to short-term

changes

Adaptability – Longer-term adjustment of

supply chain design when the need arises

Alignment – Incentives that encourage supply

chain partners to work toward same objectives
(Lee, 2004)
 Christopher’s 4R model

Responsiveness: The ability to move quickly and to meet

customer’s demand sooner. It is demand driven rather than forecast
driven
Reliability: The ability to minimize uncertainty by reducing
process variability
Resilience: The ability to cope with uncertain business
environment by recognizing where the supply chain is at its most
vulnerable
Relationships: The ability to manage inter-organizational
relationships through formal and relational contracts
(Christopher, 2011)
 Implications of Supply Chain

Multiple organizations vs. single organization

 Interdependence between supply chain participants

 Flow of physical and non-physical elements

 Supply chain is not fixed, participants are mobile

 Cooperation and Integration are needed (a supply chain is only as strong

as its weakest link)

Contact before and after the completion of sale

 Importance of customer
 Case Study:

• Question to answer:

• Compare and contrast the approaches taken by H&M,

Benetton and Zara to managing their supply chain.
 Logistics & SCM
 SCM focuses on efficiently managing systems of people,
resources, information, that deal with the movement of a
product or service from supplier to customer.
 Logistics entails planning and organising all movement of
said product or service. The aim is to optimise the supply
chain in the most cost-effective way, helping companies
to build a competitive edge.
 Logistics & SC management provides you with relevant
insights in market needs, planning methods and
controlling flows, required to analyse logistical
performances or the implementation of new logistical
approaches.
 Logistics Management
vs.
SCM
Logistics management
‘the task of coordinating material flow and
information flow across the SC’
Supply chain management
‘planning and controlling all of the business
processes – from end-customer to raw material
suppliers – then link together partners in a SC in
order to serve the needs of the end-customer’.
 LM vs. SCM in simple terms

• SCM – Transforming a raw materials into products and

getting it to customers

• LM – Movement of materials in whole SC.

 Logistic and SC challenges

• Unknown SC risk and volatility – the longer the SC ,

the more exposure to risk and potential disruption.

• Greater SC variability – the difference between what

we expect from something and what actually happens –
becomes a key issue when doing business.

• Less SC visibility – maintaining good visibility in SC

– tracking shipment as they move.
 Supply Chain Management

Examine the map and describe what you have learned regarding logistics &
SCM
Sustainable Supply
Chain
Sustainable supply chain

Environmental
impact at each
stage of the SC
 Triple Bottom Line (TBL) Approach to
Sustainability

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 Activity
Logistics challenges

Exercise: Local Supermarket

Visit your local supermarket and observe for
yourself the scale of logistics activities at work.
Questions:
 What do you think are the main logistics challenges in running
the Tesco operations?
 Have you observed any environmental issues?
 Summary

What have your learned in this

session?

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