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    Ballou 01

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    Student_BU
    The document discusses key concepts in business logistics and supply chain management. It defines supply chain management as the integration of activities involved in procuring raw materials, transforming them into final products, and delivering products to customers. This includes coordination of functions like transportation, warehousing, and information flows both within and across companies. Logistics is defined as the part of the supply chain that plans and controls the flow of goods and services from origin to consumption. The supply chain encompasses procurement, manufacturing, and distribution, and aims to meet customer needs through strategic coordination across business functions.

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    Ballou 01

    Uploaded by

    Student_BU
    319 views27 pages
    The document discusses key concepts in business logistics and supply chain management. It defines supply chain management as the integration of activities involved in procuring raw materials, transforming them into final products, and delivering products to customers. This includes coordination of functions like transportation, warehousing, and information flows both within and across companies. Logistics is defined as the part of the supply chain that plans and controls the flow of goods and services from origin to consumption. The supply chain encompasses procurement, manufacturing, and distribution, and aims to meet customer needs through strategic coordination across business functions.

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    SCM

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    The document discusses key concepts in business logistics and supply chain management. It defines supply chain management as the integration of activities involved in procuring raw materials, transforming them into final products, and delivering products to customers. This includes coordination of functions like transportation, warehousing, and information flows both within and across companies. Logistics is defined as the part of the supply chain that plans and controls the flow of goods and services from origin to consumption. The supply chain encompasses procurement, manufacturing, and distribution, and aims to meet customer needs through strategic coordination across business functions.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    319 views27 pages

    Ballou 01

    Uploaded by

    Student_BU
    The document discusses key concepts in business logistics and supply chain management. It defines supply chain management as the integration of activities involved in procuring raw materials, transforming them into final products, and delivering products to customers. This includes coordination of functions like transportation, warehousing, and information flows both within and across companies. Logistics is defined as the part of the supply chain that plans and controls the flow of goods and services from origin to consumption. The supply chain encompasses procurement, manufacturing, and distribution, and aims to meet customer needs through strategic coordination across business functions.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 27
    At a glance
    Powered by AI
    The key takeaways are that supply chain management involves coordinating activities across organizations and functions to efficiently move goods from raw materials to the end customer. Logistics is the part of the supply chain that plans and controls the flow of goods.

    The main components of a supply chain discussed are vendors/plants/ports, factories, warehouses, transportation, customers, and information flows.

    Logistics is defined as planning, implementing, and controlling the efficient flow of goods, services, and information from origin to consumption to meet customer needs.

    Business Logistics/Supply

    ChainA Vital Subject


    The supply chain is simply another way of
    saying the whole process of business.

    Chapter 1
    CR (2004) Prentice Hall, Inc.

    1-1

    Introduction

    SCM and logistics activities provide the


    bridge between production and market
    locations that are separated by time
    and distance.

    1-2

    The Immediate Supply Chain for an Individual Firm

    Transportation

    Warehousing

    Transportation

    Customers

    Information
    flows

    Factory

    Transportation

    Vendors/plants/ports
    Warehousing
    CR (2004) Prentice Hall, Inc.

    Transportation
    1-2

    Definition of SCM and Logistics

    The supply chain encompasses all activities


    associated with the flow and transformation of
    goods from the raw material stage
    (extraction), through to the end user, as well
    as the associated information flows. Materials
    and information flow both up and down the
    supply chain. (Handfield and Nichols,1999)

    1-4

    Definition of SCM and Logistics

    Supply Chain Management (SCM) is


    the integration of these activities,
    through improved supply chain
    relationships, to achieve a sustainable
    competitive advantage. (Handfield and
    Nichols)

    1-5

    Definition of SCM and Logistics

    Within the supply chain Mentzer et al.(2001)


    propose the broad and rather general
    definition:
    Supply chain management is defined as the
    systematic, strategic coordination of the
    traditional business functions and the tactics
    across these business functions within a
    particular company and across businesses
    within the supply chain, for the purposes of
    1-6

    Definition of SCM and Logistics

    Improving the long term performance of the individual


    companies and the supply chain as a whole.
    Russell Morey, 1997 defined SCM as the process of
    planning organizing and controlling the flow of
    materials and services from suppliers to end users/
    customers. This integrated approach incorporates
    suppliers, supply management, integrated logistics
    and operations.

    1-7

    Definition of SCM and Logistics

    Logistics 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 of origin to
    the point of consumption in order to
    meet customers requirements.
    (Council of Logistics Management)
    1-8

    Definition of SCM and Logistics

    Integrated Logistics is the process of anticipating


    customer needs and wants; acquiring the capital,
    materials, people, technologies and information
    necessary to meet those needs and wants;
    optimizing the goods or service producing network to
    fulfill customers requests; and utilizing the network to
    fulfill customer requests in a timely way.
    (Arthur D. Little and Pennsylvania State University)

    1-9

    Evolution of Supply Chain Management

    CR (2004) Prentice Hall, Inc.

    1-10

    Supply Chain Schematic

    CR (2004) Prentice Hall, Inc.

    1-5

    The Logistics/SC Mission

    CR (2004) Prentice Hall, Inc.

    1-12

    Critical Customer Service


    Loop
    Customer order processing (and
    transmittal)

    Transportation
    Customers
    Inventory
    or supply source

    CR (2004) Prentice Hall, Inc.

    1-13

    Physical Distribution Costs


    Category

    Percent of sales

    $/cwt.

    Transportation

    3.34%

    $26.52

    Warehousing

    2.02

    18.06

    Order entry

    0.43

    4.58

    Administration

    0.41

    2.79

    Inventory carrying

    1.72

    22.25

    7.65%

    $67.71

    Total

    Add one-third for inbound supply costs


    Source: Herb Davis & Company
    CR (2004) Prentice Hall, Inc.

    Logistics cost
    are about 10% of
    sales w/o
    purchasing costs
    1-14

    Significance of Logistics

    1-15

    Effect on Logistics Foreign Outsourcing


    Domestic sourcing

    Foreign sourcing

    Profit
    G&A

    Profit
    G&A

    Marketing
    Logistics
    Overhead

    Increase

    Marketing
    Logistics

    Increase

    Tariffs
    Overhead

    Materials
    Materials
    Labor
    CR (2004) Prentice Hall, Inc.

    Labor

    Reduction
    1-16

    Scope of the Supply Chain for Most Firms


    Business logistics

    Physical supply
    (Materials management)
    Sources of
    supply

    Physical distribution
    Plants/
    operations

    Transportation
    Inventory maintenance
    Order processing
    Acquisition
    Protective packaging
    Warehousing
    Materials handling
    Information maintenance

    CR (2004) Prentice Hall, Inc.

    Customers
    Transportation
    Inventory maintenance
    Order processing
    Product scheduling
    Protective packaging
    Warehousing
    Materials handling
    Information maintenance

    Focus firms internal supply chain

    1-14

    Key Activities/Processes

    Primary
    - Setting customer service goals
    - Transportation
    - Inventory management
    - Location

    Secondary, or supporting
    - Warehousing
    - Materials handling
    - Acquisition (purchasing)
    - Protective packaging
    - Product scheduling
    - Order processing

    CR (2004) Prentice Hall, Inc.

    1-18

    The Supply Chain is Multi-Enterprise


    Scope
    in reality
    Focus
    Company
    Suppliers

    Customers
    Customers/
    End users

    Suppliers
    suppliers

    Acquire

    Convert

    Distribute

    Product and information flow

    CR (2004) Prentice Hall, Inc.

    1-19

    Reality of SC Scope

    CR (2004) Prentice Hall, Inc.

    1-20

    co
    ord
    na
    l
    un
    cti
    o
    erf

    n
    rdi
    oo
    lc
    na
    tio
    iza

    SUPPLY
    CHAIN
    MANAGEMENT

    on
    ati

    Int

    n
    rga
    ero
    Int

    ina
    tio
    n

    The Multi-Dimensions of SC

    Activity and process


    administration
    CR (2004) Prentice Hall, Inc.

    1-21

    Objectives of Business
    Logistics/SCM

    A workable financial objective for


    scm/logistics can be expressed in the ratio
    known as ROLA (Return on Logistics Assets).
    ROLA is defined as:
    ROLA = (Contribution to revenue Logistics
    operating costs) / Logistics Assets

    1-22

    The Logistics Strategy Triangle


    Inventory Strategy
    Forecasting
    Transport Strategy
    Storage fundamentals
    Transport fundamentals
    Inventory
    decisions

    Transport decisions
    Purchasing and supply
    scheduling decisions
    Customer
    Storage decisions
    service goals
    The product
    Logistics service
    Information sys.
    Location Strategy
    Location decisions
    The network planning process

    CR (2004) Prentice Hall, Inc.

    1-23

    Relationship of Logistics to
    Marketing and Production
    PRODUCTION/
    OPERATIONS
    Sample activities:
    Quality control
    Detailed production
    scheduling
    Equipment maint.
    Capacity planning
    Work measurement
    & standards

    Interface
    activities:
    Product
    scheduling
    Plant
    location
    Purchasing

    LOGISTICS
    Sample
    activities:
    Transport
    Inventory
    Order
    processing
    Materials
    handling

    Interface
    activities:
    Customer
    service
    standards
    Pricing
    Packaging
    Retail
    location

    Productionlogistics
    interface

    Marketinglogistics
    interface

    Internal Supply Chain


    CR (2004) Prentice Hall, Inc.

    MARKETING
    Sample
    activities:
    Promotion
    Market
    research
    Product
    mix
    Sales force
    management

    1-21

    Marketing

    Relationship of Logistics to Marketing


    Product
    Promotion

    Price

    Logistics

    Place-Customer
    service levels
    Transport
    costs

    Inventory
    carrying costs
    Lot quantity
    costs

    CR (2004) Prentice Hall, Inc.

    Order processing
    and information
    costs

    Warehousing
    costs

    1-22

    Relationship of Logistics to Production


    Coordinates through scheduling and strategy

    make-to-order or make-to-stock
    An integral part of the the supply chain
    Affects total response time for customers
    Shares activities such as inventory planning
    Costs are in tradeoff
    Production lot quantities affect inventory
    levels and transportation efficiency
    Production response affects transportation
    costs and customer service
    Production and warehouse location are
    interrelated
    CR (2004) Prentice Hall, Inc.

    1-26

    Application:
    Logistics/SC in Diverse Areas
    Manufacturingmost common
    Environmentcausing restrictions
    Serviceemerging opportunities
    Non-profitslittle explored
    Militarylong history
    CR (2004) Prentice Hall, Inc.

    1-27

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