Logistics & Distribution Mgmt.pdf
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LOGISTICS & DISTRIBUTION MANAGEMENT P. Udayakumar P Udayakumar Director (Planning & Marketing) National Small Industries Corporation Ltd. 11-02-2016
SCM
1
Supply pp y Chain Overview Transportation
Transportation
Warehousing
Customers
Information flows Factory
Transportation
Vendors/plants/ports Warehousing CR (2004) Prentice Hall, Inc. 11-02-2016
Transportation p SCM
SCM‐2
1-2
Logistics vs Supply Chain Management Council of Logistics Management • “Logistics is the process of planning, implementing and controlling the efficient, cost‐effective flow and storage of raw materials in‐process inventory finished goods and raw materials, in‐process inventory, finished goods and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements ” requirements. Handfield and Nichols • SCM is the integration SCM is the integration of all activities of all activities associated with the associated with the flow and transformation of goods from raw materials through to end user, as well as information flows, through improved supply chain relationships to achieve a improved supply chain relationships, to achieve a sustainable competitive advantage.
11-02-2016
SCM
3
Role of Logistics & Distribution System Logistics is the planning process as well as the implementation of efficient and effective storage of raw materials, materials inventory, inventory finished goods and services. services It also refers to the flow and transportation of product from the warehouse to the consumer. consumer
11-02-2016
SCM
4
Th L The Logistics/SCM i ti /SCM Mi Mission i • Getting the right goods or services to the right place, at the right time, and in the desired condition at the lowest cost and h d h d d d h l d highest return on investment. • Product / Service Utility • Possession Possession Utility ‐ Utility the value or usefulness that comes from a customer the value or usefulness that comes from a customer being able to take possession of a product • Form Utility ‐ in a form that can be used by the customer and is of value to the customer value to the customer • Place Utility ‐ available where they are needed by customers • Time Utility ‐ available when they are needed by customers
• Logistics obviously help time and place utility
11-02-2016
SCM
5
Evolution of Supply Chain Management Activity fragmentation to 1960
2000+
Activity Integration 1960 to 2000
Demand forecasting Purchasing Requirements planning Production planning Manufacturing inventory
Purchasing/ Materials Management
Warehousing Logistics
Material handling g Packaging Finished goods inventory Distribution planning
Physical Distribution
Supply Chain Supply Chain Management Management
Order processing Transportation C t Customer service i Strategic planning Information services Marketing/sales Finance
11-02-2016
SCM
6
A Revised Strategy is Generating Great Top Management Interest • Historical perspective of distribution ( (Peter Drucker, 1962): , ) “The last frontier of cost economies” • The contemporary view: Distribution is a new frontier for demand generation—a competitive weapon. • Both views are important! p 11-02-2016
SCM
SCM‐7
Critical Customer Service Loop Customer order p processing g ((and transmittal)
Transportation Customers Inventory or supply source
11-02-2016
SCM
SCM‐8
Ph i l Di Physical Distribution t ib ti C Costs t Category g y
Percent of sales
$/cwt. $/
3.34%
$26.52
W h Warehousing i
2 02 2.02
18 06 18.06
Order entry
0.43
4.58
Administration
0.41
2.79
Inventoryy carrying y g
1.72
22.25
7.65%
$67.71
Transportation
Total
Add one-third for inbound supply costs Source: Herb Davis & Company 11-02-2016
SCM
Logistics cost are about 10% of sales w/o purchasing costs SCM‐9
Importance of Logistics & Distribution System ¾ Maintaining competitive edge Successful business logistics provide a competitive edge against other g It p provides a system y or p process byy which customer needs can be organizations. fulfilled in a more efficient manner. A business should strive to provide shipments of merchandise in a more accurate and fast manner than competitors do. The Internet has made it possible for many companies to do this.
¾ Building Good Consumer Relations
Providing product in an efficient manner, which business logistics helps to do, also helps to build b ild good consumer cons mer relations. relations
¾ Creating Finished Product
A business needs to ensure there are enough raw materials available to make finished products. Without quality goods, a business cannot make quality product. Having enough products stocked is also necessary for supply and demand purposes and to maximize customer satisfaction. 11-02-2016
SCM
10
Type of Distribution Channels (Direct) 1. 2 2. 3. 4. 5. 6. 7 7.
11-02-2016
Personal Selling Mail Order Selling Mail Order Selling Automatic Vending Franchised Shops Tele‐marketing Exclusive Stores/Speciality Stores E‐marketing
SCM
11
Type of Distribution Channels (Indirect) 1. Merchandise Agents and Brokers‐ Work on commission basis 2. Merchandise wholesalers or Trade Channels ‐Manufacturer/Producer / – Consumer// End User ‐Manufacturer/Producer –Wholesaler‐ Consumer/ End User ‐Manufacturer/Producer –Retailer‐ Consumer/ End User ‐Manufacturer/Producer Manufacturer/Producer –Wholesaler/Distributor‐Retailer‐ Wholesaler/Distributor Retailer Consumer/ End User ‐Manufacturer/Producer–Wholesaler/Distributor‐Semi Wholesaler Wholesaler‐ Retailer‐ Consumer/ End User ‐Manufacturer/Producer–Agent/Broker‐Retailer‐ Consumer/End User ‐Manufacturer/Producer–Agent/Broker‐Wholesaler‐Retailer‐ Consumer/ End User 11-02-2016
SCM
12
M d l adopted Model d t db by NSIC 1. 1 2. 3. 4. 5.
MoU with Bulk Manufacturers MoU with Bulk Manufacturers Agency operation with ware housing Consignment stockiest Regional Sale Centres RMA financing and Local raw materials supply.
11-02-2016
SCM
13
SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT • Relating marketing Channels, Logistics, and Supply Chain Management • • • •
11-02-2016
Logistics L i i Logistics management Supply chain Supply chain management pp y g
SCM
14
SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT • Supply Chain Management and Marketing Strategy • Aligning a Supply Chain with Marketing Strategy • Understand the customer • Understand the supply chain d d h l h • Harmonize the supply chain with the marketing strategy
11-02-2016
SCM
15
Relating g marketing g channels, logistics g management, g and supply chain management
11-02-2016
SCM
16
The automotive supply chain
11-02-2016
SCM
17
How total logistics cost varies with number of warehouses used
11-02-2016
SCM
18
INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN • Information’s Role in Supply Chain Responsiveness and Efficiencyy • Electronic data interchanges
• Total Logistics Cost Concept Total Logistics Cost Concept
11-02-2016
SCM
19
INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN • Customer Service Concept p • Lead Time • Quick response • Efficient consumer response
• Dependability • Communication • Convenience
• Customer Service Standards Customer Service Standards
11-02-2016
SCM
20
Supply chain managers balance total logistics cost factors against customer service factors
11-02-2016
SCM
21
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
• Third‐party logistics providers • Transportation
11-02-2016
SCM
22
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
• Transportation • Railroads • Intermodal transportation
11-02-2016
SCM
23
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN • Transportation • Motor Carriers • Air Carriers and Express Companies • Freight Forwarders
• Warehousing and Materials Handling • Order Processing
11-02-2016
SCM
24
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN • Inventory Management • Reasons for Inventory • Inventory Costs • Supply Chain Inventory Strategies S ppl Chain In entor Strategies • Just‐in‐time (JIT) concept • Vendor‐managed inventory g y
• CLOSING THE LOOP: REVERSE LOGISTICS
11-02-2016
SCM
25
Advantages g and disadvantages g of five modes of transportation
11-02-2016
SCM
26
Relationship of Logistics to Marketing and Production
PRODUCTION/ OPERATIONS Sample activities: • Quality control • Detailed D t il d production d ti scheduling • Equipment maint. • Capacity planning • Work o measurement easu e e t & standards
Interface activities: • Product scheduling • Plant location • Purchasing
LOGISTICS Sample activities: ti iti •Transport • Inventory • Order processing • Materials handling
Interface activities: • Customer service standards • Pricing • Packaging • Retail l location ti
ProductionProduction logistics interface
MARKETING Sample activities: • Promotion • Market research • Product mix • Sales force management
Marketinglogistics interface
Internal Supply Chain 11-02-2016
SCM
SCM‐27
E-Commerce Boom’s Impact on Logistics ¾ The time of elaborate, elaborate multi‐story multi story shopping centers is rapidly coming to a close with the rise of e‐Commerce. In fact, total global business to customer (B2C) e‐Commerce sales was expected to top $1.5 trillion in 2014 and it is anticipated to grow 88.4% 2014, 88 4% to $2.3 $2 3 trillion by 2017. 2017 ¾ The Rise of Omni‐Channel Retail Omni channel is a multichannel approach to sales that seeks to provide Omni‐channel the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store. store ¾ Distribution Centre Frenzy Retail drives 40% of supply chain real estate. estate Because of this fact, fact there will be a major overhaul for distribution centers on both a national and global level. Retailers will be required to acquire distribution real estate that will fit into their Omni Omni‐channel channel approach in order to stay competitive. 11-02-2016
SCM
28
E-Commerce Boom’s Impact on Logistics ¾ The Rise of Omni‐Channel Retail Omni‐channel is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store.
¾ In most countries, shopping for groceries is the largest category of retail spending The global online grocery market is expected to blossom from spending. $36 billion in 2013, to $100 billion by 2018. In turn, this development will encourage retailers and companies offering supply chain solutions to rethink their current strategies for distribution centers (DC). (DC) As the increase for highly perishable goods goes up, the need for DCs that are of close proximity to major population centers will go up as well.
11-02-2016
SCM
29
Common Contemporary Logistics Terms • • • • • • • • •
Value stream/logistics process g p Quick response and flexible manufacturing Mass customization Mass customization Supply chain management/ collaborative logistics Reverse logistics Reverse logistics Service logistics Continuous replenishment Continuous replenishment Lean logistics I t Integrated logistics t d l i ti
=> IT people have to deal with any related automation anyway 11-02-2016
SCM
30
Reverse Logistics A process of reclaiming recyclable and reusable materials, returns, and reworks reusable materials, returns, and reworks from the point of consumption or sue for repair, remanufacturing, redistribution, repair, remanufacturing, redistribution, or disposal.
11-02-2016
SCM
31
Logistics
Those activities that focus on getting the right amount of the right products to the right amount of the right products to the right place at the right time at the lowest possible price possible price.
11-02-2016
SCM
32
Logistics Management
The practice of organizing the cost‐effective flow of raw materials, in‐process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.
11-02-2016
SCM
33
Supply Chain
A sequence of firms that perform activities q p required to create and deliver a good or service to consumers or industrial users. service to consumers or industrial users.
11-02-2016
SCM
34
Supply Chain Management The integration and organization of information and logistic activities across information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and creating and delivering goods and services that provide value to customers.
11-02-2016
SCM
35
Cross Docking Practice of unloading products from suppliers sorting products for individual suppliers, sorting products for individual stores, and quickly reloading products onto trucks for a particular store onto trucks for a particular store.
11-02-2016
SCM
36
Electronic Data Interchange (EDI) Combine proprietary computer and telecommunication technologies to telecommunication technologies to exchange electronic invoices, payments, and information among suppliers, and information among suppliers, manufacturers, and retailers.
11-02-2016
SCM
37
Total Logistics Cost Expenses associated with transportation, materials handling and warehousing materials handling and warehousing, inventory, stockouts, order processing, and return goods handling and return goods handling.
11-02-2016
SCM
38
Customer Service The ability of logistics management to satisfy users in terms of time satisfy users in terms of time, dependability, communication, and convenience. convenience
11-02-2016
SCM
39
Lead Time Lag from ordering an item until it is received and ready for use or sale Also received and ready for use or sale. Also called order cycle time or replenishment time. time
11-02-2016
SCM
40
Quick Response An inventory management system designed to reduce the retailer’ss lead designed to reduce the retailer lead time, thereby lowering its inventory investment improving customer service investment, improving customer service levels, and reducing logistics expense.
11-02-2016
SCM
41
Third-Party Logistics Providers Firms that perform most or all of the logistics functions that manufacturers logistics functions that manufacturers, suppliers, and distributors would normally perform themselves normally perform themselves.
11-02-2016
SCM
42
Vendor-Managed Inventory An inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.
11-02-2016
SCM
43
Intermodal Transportation
Combining different transportation modes Combining different transportation modes to get the best features from each.
11-02-2016
SCM
44
Freight Forwarders
Firms that accumulate small shipments p into larger lots and then hire a carrier to move them, usually at reduced rates. move them, usually at reduced rates.
11-02-2016
SCM
45
Materials Handling
Moving goods over short distances into, gg , within, and out of warehouses and manufacturing plants. manufacturing plants.
11-02-2016
SCM
46
Just-In-Time Concept
An inventory supply system that operates y pp y y p with very low inventories and requires fast, on‐time fast, on time delivery. delivery.
11-02-2016
SCM
47
•
•
11-02-2016
THANK YOU THANK YOU SCM
48
SCM
1
Supply pp y Chain Overview Transportation
Transportation
Warehousing
Customers
Information flows Factory
Transportation
Vendors/plants/ports Warehousing CR (2004) Prentice Hall, Inc. 11-02-2016
Transportation p SCM
SCM‐2
1-2
Logistics vs Supply Chain Management Council of Logistics Management • “Logistics is the process of planning, implementing and controlling the efficient, cost‐effective flow and storage of raw materials in‐process inventory finished goods and raw materials, in‐process inventory, finished goods and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements ” requirements. Handfield and Nichols • SCM is the integration SCM is the integration of all activities of all activities associated with the associated with the flow and transformation of goods from raw materials through to end user, as well as information flows, through improved supply chain relationships to achieve a improved supply chain relationships, to achieve a sustainable competitive advantage.
11-02-2016
SCM
3
Role of Logistics & Distribution System Logistics is the planning process as well as the implementation of efficient and effective storage of raw materials, materials inventory, inventory finished goods and services. services It also refers to the flow and transportation of product from the warehouse to the consumer. consumer
11-02-2016
SCM
4
Th L The Logistics/SCM i ti /SCM Mi Mission i • Getting the right goods or services to the right place, at the right time, and in the desired condition at the lowest cost and h d h d d d h l d highest return on investment. • Product / Service Utility • Possession Possession Utility ‐ Utility the value or usefulness that comes from a customer the value or usefulness that comes from a customer being able to take possession of a product • Form Utility ‐ in a form that can be used by the customer and is of value to the customer value to the customer • Place Utility ‐ available where they are needed by customers • Time Utility ‐ available when they are needed by customers
• Logistics obviously help time and place utility
11-02-2016
SCM
5
Evolution of Supply Chain Management Activity fragmentation to 1960
2000+
Activity Integration 1960 to 2000
Demand forecasting Purchasing Requirements planning Production planning Manufacturing inventory
Purchasing/ Materials Management
Warehousing Logistics
Material handling g Packaging Finished goods inventory Distribution planning
Physical Distribution
Supply Chain Supply Chain Management Management
Order processing Transportation C t Customer service i Strategic planning Information services Marketing/sales Finance
11-02-2016
SCM
6
A Revised Strategy is Generating Great Top Management Interest • Historical perspective of distribution ( (Peter Drucker, 1962): , ) “The last frontier of cost economies” • The contemporary view: Distribution is a new frontier for demand generation—a competitive weapon. • Both views are important! p 11-02-2016
SCM
SCM‐7
Critical Customer Service Loop Customer order p processing g ((and transmittal)
Transportation Customers Inventory or supply source
11-02-2016
SCM
SCM‐8
Ph i l Di Physical Distribution t ib ti C Costs t Category g y
Percent of sales
$/cwt. $/
3.34%
$26.52
W h Warehousing i
2 02 2.02
18 06 18.06
Order entry
0.43
4.58
Administration
0.41
2.79
Inventoryy carrying y g
1.72
22.25
7.65%
$67.71
Transportation
Total
Add one-third for inbound supply costs Source: Herb Davis & Company 11-02-2016
SCM
Logistics cost are about 10% of sales w/o purchasing costs SCM‐9
Importance of Logistics & Distribution System ¾ Maintaining competitive edge Successful business logistics provide a competitive edge against other g It p provides a system y or p process byy which customer needs can be organizations. fulfilled in a more efficient manner. A business should strive to provide shipments of merchandise in a more accurate and fast manner than competitors do. The Internet has made it possible for many companies to do this.
¾ Building Good Consumer Relations
Providing product in an efficient manner, which business logistics helps to do, also helps to build b ild good consumer cons mer relations. relations
¾ Creating Finished Product
A business needs to ensure there are enough raw materials available to make finished products. Without quality goods, a business cannot make quality product. Having enough products stocked is also necessary for supply and demand purposes and to maximize customer satisfaction. 11-02-2016
SCM
10
Type of Distribution Channels (Direct) 1. 2 2. 3. 4. 5. 6. 7 7.
11-02-2016
Personal Selling Mail Order Selling Mail Order Selling Automatic Vending Franchised Shops Tele‐marketing Exclusive Stores/Speciality Stores E‐marketing
SCM
11
Type of Distribution Channels (Indirect) 1. Merchandise Agents and Brokers‐ Work on commission basis 2. Merchandise wholesalers or Trade Channels ‐Manufacturer/Producer / – Consumer// End User ‐Manufacturer/Producer –Wholesaler‐ Consumer/ End User ‐Manufacturer/Producer –Retailer‐ Consumer/ End User ‐Manufacturer/Producer Manufacturer/Producer –Wholesaler/Distributor‐Retailer‐ Wholesaler/Distributor Retailer Consumer/ End User ‐Manufacturer/Producer–Wholesaler/Distributor‐Semi Wholesaler Wholesaler‐ Retailer‐ Consumer/ End User ‐Manufacturer/Producer–Agent/Broker‐Retailer‐ Consumer/End User ‐Manufacturer/Producer–Agent/Broker‐Wholesaler‐Retailer‐ Consumer/ End User 11-02-2016
SCM
12
M d l adopted Model d t db by NSIC 1. 1 2. 3. 4. 5.
MoU with Bulk Manufacturers MoU with Bulk Manufacturers Agency operation with ware housing Consignment stockiest Regional Sale Centres RMA financing and Local raw materials supply.
11-02-2016
SCM
13
SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT • Relating marketing Channels, Logistics, and Supply Chain Management • • • •
11-02-2016
Logistics L i i Logistics management Supply chain Supply chain management pp y g
SCM
14
SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT • Supply Chain Management and Marketing Strategy • Aligning a Supply Chain with Marketing Strategy • Understand the customer • Understand the supply chain d d h l h • Harmonize the supply chain with the marketing strategy
11-02-2016
SCM
15
Relating g marketing g channels, logistics g management, g and supply chain management
11-02-2016
SCM
16
The automotive supply chain
11-02-2016
SCM
17
How total logistics cost varies with number of warehouses used
11-02-2016
SCM
18
INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN • Information’s Role in Supply Chain Responsiveness and Efficiencyy • Electronic data interchanges
• Total Logistics Cost Concept Total Logistics Cost Concept
11-02-2016
SCM
19
INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN • Customer Service Concept p • Lead Time • Quick response • Efficient consumer response
• Dependability • Communication • Convenience
• Customer Service Standards Customer Service Standards
11-02-2016
SCM
20
Supply chain managers balance total logistics cost factors against customer service factors
11-02-2016
SCM
21
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
• Third‐party logistics providers • Transportation
11-02-2016
SCM
22
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
• Transportation • Railroads • Intermodal transportation
11-02-2016
SCM
23
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN • Transportation • Motor Carriers • Air Carriers and Express Companies • Freight Forwarders
• Warehousing and Materials Handling • Order Processing
11-02-2016
SCM
24
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN • Inventory Management • Reasons for Inventory • Inventory Costs • Supply Chain Inventory Strategies S ppl Chain In entor Strategies • Just‐in‐time (JIT) concept • Vendor‐managed inventory g y
• CLOSING THE LOOP: REVERSE LOGISTICS
11-02-2016
SCM
25
Advantages g and disadvantages g of five modes of transportation
11-02-2016
SCM
26
Relationship of Logistics to Marketing and Production
PRODUCTION/ OPERATIONS Sample activities: • Quality control • Detailed D t il d production d ti scheduling • Equipment maint. • Capacity planning • Work o measurement easu e e t & standards
Interface activities: • Product scheduling • Plant location • Purchasing
LOGISTICS Sample activities: ti iti •Transport • Inventory • Order processing • Materials handling
Interface activities: • Customer service standards • Pricing • Packaging • Retail l location ti
ProductionProduction logistics interface
MARKETING Sample activities: • Promotion • Market research • Product mix • Sales force management
Marketinglogistics interface
Internal Supply Chain 11-02-2016
SCM
SCM‐27
E-Commerce Boom’s Impact on Logistics ¾ The time of elaborate, elaborate multi‐story multi story shopping centers is rapidly coming to a close with the rise of e‐Commerce. In fact, total global business to customer (B2C) e‐Commerce sales was expected to top $1.5 trillion in 2014 and it is anticipated to grow 88.4% 2014, 88 4% to $2.3 $2 3 trillion by 2017. 2017 ¾ The Rise of Omni‐Channel Retail Omni channel is a multichannel approach to sales that seeks to provide Omni‐channel the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store. store ¾ Distribution Centre Frenzy Retail drives 40% of supply chain real estate. estate Because of this fact, fact there will be a major overhaul for distribution centers on both a national and global level. Retailers will be required to acquire distribution real estate that will fit into their Omni Omni‐channel channel approach in order to stay competitive. 11-02-2016
SCM
28
E-Commerce Boom’s Impact on Logistics ¾ The Rise of Omni‐Channel Retail Omni‐channel is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store.
¾ In most countries, shopping for groceries is the largest category of retail spending The global online grocery market is expected to blossom from spending. $36 billion in 2013, to $100 billion by 2018. In turn, this development will encourage retailers and companies offering supply chain solutions to rethink their current strategies for distribution centers (DC). (DC) As the increase for highly perishable goods goes up, the need for DCs that are of close proximity to major population centers will go up as well.
11-02-2016
SCM
29
Common Contemporary Logistics Terms • • • • • • • • •
Value stream/logistics process g p Quick response and flexible manufacturing Mass customization Mass customization Supply chain management/ collaborative logistics Reverse logistics Reverse logistics Service logistics Continuous replenishment Continuous replenishment Lean logistics I t Integrated logistics t d l i ti
=> IT people have to deal with any related automation anyway 11-02-2016
SCM
30
Reverse Logistics A process of reclaiming recyclable and reusable materials, returns, and reworks reusable materials, returns, and reworks from the point of consumption or sue for repair, remanufacturing, redistribution, repair, remanufacturing, redistribution, or disposal.
11-02-2016
SCM
31
Logistics
Those activities that focus on getting the right amount of the right products to the right amount of the right products to the right place at the right time at the lowest possible price possible price.
11-02-2016
SCM
32
Logistics Management
The practice of organizing the cost‐effective flow of raw materials, in‐process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.
11-02-2016
SCM
33
Supply Chain
A sequence of firms that perform activities q p required to create and deliver a good or service to consumers or industrial users. service to consumers or industrial users.
11-02-2016
SCM
34
Supply Chain Management The integration and organization of information and logistic activities across information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and creating and delivering goods and services that provide value to customers.
11-02-2016
SCM
35
Cross Docking Practice of unloading products from suppliers sorting products for individual suppliers, sorting products for individual stores, and quickly reloading products onto trucks for a particular store onto trucks for a particular store.
11-02-2016
SCM
36
Electronic Data Interchange (EDI) Combine proprietary computer and telecommunication technologies to telecommunication technologies to exchange electronic invoices, payments, and information among suppliers, and information among suppliers, manufacturers, and retailers.
11-02-2016
SCM
37
Total Logistics Cost Expenses associated with transportation, materials handling and warehousing materials handling and warehousing, inventory, stockouts, order processing, and return goods handling and return goods handling.
11-02-2016
SCM
38
Customer Service The ability of logistics management to satisfy users in terms of time satisfy users in terms of time, dependability, communication, and convenience. convenience
11-02-2016
SCM
39
Lead Time Lag from ordering an item until it is received and ready for use or sale Also received and ready for use or sale. Also called order cycle time or replenishment time. time
11-02-2016
SCM
40
Quick Response An inventory management system designed to reduce the retailer’ss lead designed to reduce the retailer lead time, thereby lowering its inventory investment improving customer service investment, improving customer service levels, and reducing logistics expense.
11-02-2016
SCM
41
Third-Party Logistics Providers Firms that perform most or all of the logistics functions that manufacturers logistics functions that manufacturers, suppliers, and distributors would normally perform themselves normally perform themselves.
11-02-2016
SCM
42
Vendor-Managed Inventory An inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.
11-02-2016
SCM
43
Intermodal Transportation
Combining different transportation modes Combining different transportation modes to get the best features from each.
11-02-2016
SCM
44
Freight Forwarders
Firms that accumulate small shipments p into larger lots and then hire a carrier to move them, usually at reduced rates. move them, usually at reduced rates.
11-02-2016
SCM
45
Materials Handling
Moving goods over short distances into, gg , within, and out of warehouses and manufacturing plants. manufacturing plants.
11-02-2016
SCM
46
Just-In-Time Concept
An inventory supply system that operates y pp y y p with very low inventories and requires fast, on‐time fast, on time delivery. delivery.
11-02-2016
SCM
47
•
•
11-02-2016
THANK YOU THANK YOU SCM
48
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