Supply Chain Management And Logistics

LOGISTICS AND SUPPLY CHAIN MANAGMENT Presented by: DEEPTI

Logistics • Science of managing (controlling) the movement and storage of goods (or people) from acquisition to consumption. • Goods: Raw Materials  Final products, and everything in between. • Movement = Transportation (between locations). • Storage = Inventory, Warehousing (at

Definition by Council of Logistics Management, 1998 • ….is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-oforigin to the point-of-consumption in order to meet customers' requirements.

Logistics – Mission [A Bill of “Rights”] • Logistics embodies the effort to deliver: – the right product – in the right quantity – in the right condition – to the right place – at the right time – for the right customer – at the right cost

Activities and Logistics Decisions Transportation

rate and contract negotiation mode and service selection routing and scheduling

Inventories

finished goods policies supply scheduling short term forecasting

Warehousing

private vs. public space determination warehouse configuration stock placement

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Facility Location determining location, number and size of facilities allocating demand to facilities

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Customer Service – determining customer wants – determining customer response to service changes

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Materials Handling – equipment selection – equipment replacement – order picking procedures

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Packaging design

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Order Processing – order procedure determination Production Scheduling

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Components of logistics management :

Management actions Planning

Implementation

Outputs of logistics

Control

Inputs into logistics

Natural resources (land, facilities, and equipments)

Logistics management Suppliers

Raw In-process materials inventory

Finished goods

Human resources Logistics Activities Financial resources Information resources

Customers

Marketing orientation (competitive advantage) Time and place utility Efficient movement to customer Proprietary asset

The Logistics (Strategic) Planning Triangle

Strategy/Control system? How much? Where?

Which mode? Which carrier? Which route? Shipment size and frequency?

Where?, How many? What size? Allocation?

What is a supply chain? • Raw materials • Suppliers • Manufacturers – WIP

• Warehouses • DCs • Retail outlets

Cycle View of Supply Chains Customer Order Cycle Replenishment Cycle

Manufacturing Cycle Procurement Cycle

Custome r Retaile r Distributo r Manufacture r Supplie r

The Supply Chain Supplie rs

Material Costs

Manufacture rs

Transportati on Costs Manufacturing Costs

Warehouses & Distribution Centers

Transportati on Costs

Inventory Costs

Custome rs

Transportati on Costs

What is SCM? • The efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed – in the right quantities – to the right locations – at the right time

Why Is SCM Difficult? • Uncertainty is inherent to every supply chain – – – –

Travel times Breakdowns of machines and vehicles Weather, natural catastrophe, war Local politics, labor conditions, border issues

• The complexity of the problem to globally optimize a supply chain is significant – –

Minimize internal costs Minimize uncertainty

Supply Chain Management – Key Issues

Source: Simchi-

Supply Chain Management – Benefits • A 1997 PRTM Integrated Supply Chain Benchmarking Survey of 331 firms found significant benefits to integrating the supply chain

Source: Cohen & Roussel

The Value Chain: Linking Supply Chain and Business Business Strategy New Product Marketin Strategy g Strategy

Supply Chain Strategy

Finance, Accounting, Information Technology, Human Resources

Flows in a Supply Chain Informatio n Product Funds Supply Chain

Customer

“Supply Chain Management” is Much More “Demand Management”

Demand Planning

Outbound Logistics Customer Relationship Management

Sales Order Mgt.

“Focal Firm”

“Supply Management”

Procurement Operations (Product or Service) Strategy

Inbound Logistics

Process Design and Management Project Management

Supplier Relationship Management

Financial Resource Management Supply Chain Integration 05/30/09

Source: Jr., Georgia Ph.D.,Tech, Georgia Tech Source:John C. JohnLangley, Langley, Jr., Ph.D, 2002.

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