MANAGEMENT 3238 LOGISTICS, INVENTORY, AND CONTROL

GLOBAL LOGISTICS
DR. MELECIO A. SY, JR.
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OBJECTIVES
1. Understand the fundamental concepts and principles of global
logistics.

2. Analyze the challenges and opportunities in global supply chain

management.

3. Apply logistics strategies to real-world global business scenarios.

4. Understand the impact of logistics decisions on a company's

overall competitiveness.

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SUB-TOPICS
1. Importance of Logistics
2. Attributes of Global Logistics
3. Integrated Systems
4. Competitive Advantage through Logistics
5. Logistics and Supply Chain

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Sub-Topic 1

Importance of Logistics

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1: Importance of Logistics
1. Importance in the economy
The use of human and physical resource
extensively affect national economy. The
percentage of logistics workforce to the total
workforce of a country, vary from country to
country. In UK, its 30%., in USA, its 7 to 9%, in
South America, 12%, India is 13%, and China
14.5%.
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1: Importance of Logistics
Question:
2. Importance to Industry Contextualize the data in
the Philippine context,
Logistics significantly share to a countries GDP especially, manufacturing
at 18% and agriculture at
(Figure 1.3) 8.9% as of 2022. The total
Philippine GDP is USD
Logistics cost elements share to total logistics 404.28B. In 2022, Logistics
cost of the industries is
cost are transportation at 48.4%, inventory 27.16% according to
carrying cost at 22.9%, 22.6% storage and Climate and Clean Air
Coalition.
warehousing cost, customer service 3.9%, and What does the data mean?

logistics administration at 2.3%.

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1: Importance of Logistics
Question:
3. Importance to the Business (Internal) Compare the Asian
economies. Comment.
The total percentage logistics cost in the
Philippines is very high compared to other
economies in Asia.
The variation in Logistics costs between
companies and industries depend largely on the
structures, short or long, mixture of players.

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1: Importance of Logistics
Logistics
Costs

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1: Importance of Logistics
Question:
Sample: Determine the Logistics
costs in the following
scenarios:

1. Upstream Integration
only
2. Downstream
Integration Only
3. Full Vertical Integration
Contextualize in a Banana
industry.

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Sub-Topic 2

Attributes of Global Logistics

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2: Attributes of Global Logistics

Global Branding
Global Sourcing
Global Production
Centralization of Inventories
Centralization of Information
Ability to Provide Local Requirement

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2: Attributes of Global Logistics

Question:
Global Logistics requires integrated global planning Discuss each imperative.
and determine vertical integration or outsourcing.
Global business involves complex SCM and thus,
involves the following imperatives:
1. Extended supply lead times
2. Production postponement with local added

value
3. complicated SC network
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2: Attributes of Global Logistics

Question:
4. Multiple Freight transport options Compare Asian economies
5. Extended and unreliable transit times transport models with the
Philippine model.
6. Environment and ethical issues
7. The need for greater visibility

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Sub-Topic 3

Integrated Systems

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3: Integrated Systems
1. Direct Product Profitability (DPP)
Allocation of all costs to a given product. All
distribution costs (storage and transport) are
assigned to a particular product rather than
taking an average over a whole product
range.
This strategy provides real costs to customers.

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3: Integrated Systems
Question:
2. Materials Requirement Planning (MRP) and Explain the difference and
Distribution Requirement Planning (DRP) the purposes of each of
the ff:
Are computerized systems and planning tools a. MRP (Materials)
b. DRP
c. MRP (Manufacturing)

aimed to make materials or inventory

available when needed.
MRP (manufacturing) was also developed to
improve productivity.

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3: Integrated Systems
Question:
3. Just-in-Time How would you know if its
Is a concept to provide a production costly or wasteful?

system
that eliminates all activities that neither add
value to the final product or allow for
the continuous flow of materials.
It eliminates costly and wasteful
elements.

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3: Integrated Systems
4. Cost-to-Serve
This is a process-driven accountancy
used to calculate customer profitability
though actual
business activities and and overhead costs
involved.

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3: Integrated Systems
Question:
5. Distributed Order Management (DOM) Explain a DOM of a specific
Is a system designed to arrange orders company in a given
industry in the Philippines.
across 1. Beverage
2. Food
multiple systems and processes. 3. Manufacturing
4. Agriculture
DOM can analyze every transaction and 5. Service
the most efficient shipping location 6. Energy/ Fuel

considering What about among basic

commodities?
multiple factors (speed, distance, customer,
and stock levels).
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3: Integrated Systems
Question:
6. Supply Chain Control Tower How would you know if its
The essence of a control tower is to costly or wasteful?

ensure
visibility across divisions, countries, and
modality. The heart of it is an
information hub supported by
various decision-making
rules. Thus, decisions are made automatically.

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Sub-Topic 4

Competitive Advantage
Through Logistics

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4: Competitive Advantage through Logistics

Question:
Traditionally, Logistics was thought of to be an Explain how Logistics adds
additional cost for those companies' selling value to a company.

products to the marketplace.

Although there is cost associated for every

movement, it is now recognized to bring
contribution to the value of a product.

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4: Competitive Advantage through Logistics

Question:
Explain the Logistics
implications to each of
these competitive
positions.

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Sub-Topic 5

Logistics and Supply Chain

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5: Logistics and Supply Chain

Question:
The total Logistics concept advocates for the Identify the similarities and
integration of all its elements. Supply Chain differences between the
two.
Management is the same with the addition of
supplier management and the end-user in the
process.

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5: Logistics and Supply Chain

Question:
There are 4 major differences between the two: Exemplify by drawing a
1. SCM looks at the fragmented activities into one Supply Chain of a company.

including supplier management and customer

integration. Thus, SCM goes beyond the boundaries
of the business.

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5: Logistics and Supply Chain

Question:
2. SCM is a strategic process rather than an Explain the differences in
operational system. inventory management
approach between SCM
and logistics.

3. SCM provides a different approach in inventory

management as compared to the traditional
separate components in a pipeline.

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5: Logistics and Supply Chain

Question:
4. Effective SCM uses integrated information system Learn the various levels of
rather than an isolated system. This enables Vertical Integration and
differentiate the visibility
visibility of inventory in the whole SC including of each.

product demand and stock levels through the

length of the pipeline.

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5: Logistics and Supply Chain

5. Stages Question:
Discuss the differences of
of the levels in terms of:
1. Information visibility
Integration 2. Inventory levels
3. Costs
4. Controls
5. Collaboration
6. Speed of decision
7. Operational Efficiencies
8. Supply Management
9. Customer Satsifaction
Tell what is best practiced
for a certain industry. Ex.
Agriculture..

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Question:
END OF PRESENTATION Answer cases on
Zara (Spain)
Darden (USA)
Coca Cola (International)
Apple (Global)
Jollibee (China Expansion)

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