INTRODUCTION TO LOGISTICS MANAGEMENT
MODULE OUTLINE
Introduction Logistics supply chain Supply chain concept Supply chain issues Supply chain networks
INTRODUCTION
What is logistics?
That part of the supply chain process that plans, implements, and control 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 requirement Council of Logistics Management (CLM)
Material flow
Information flow
INTRODUCTION
What is logistics mission?
The mission of logistics is to get the right goods or services to the right place, at the right time, and in the desired condition, at the right price and right quantity in relation to customers order
INTRODUCTION
Logistics is not confined to manufacturing operations alone, it is relevant to all enterprises, including: Government Institutions: hospitals and schools Service organizations: retailers, bank, and financial service organizations
INTRODUCTION
Many logistics activities are dependent upon natural, human, financial, and information resources for inputs
Management actions Planning Inputs into logistics Natural resources (land, facilities, and equipment) Human resources Implementation C ontrol Output of logistics Marketing orientation (competitive avantage) Time and place utility
Logistics management Raw materials In process inventory Finished goods
Suppliers
C ustomers
Financial resources
Efficient movement to customer
Information resources
Proprietary assets
Logistics services C ustomer service Demand forecasting Distribution communications Inventory control Material handling Order processing Parts and service support Plant and warehouse site selection Procurement Packaging Return goods handling Salvage and scrap disposal Traffic and transportation Warehouse and storage
LOGISTICS SUPPLY CHAIN
Supply Chain Management (SCM) is an emerging concept that provides the great deal of benefits to companies But not many companies implemented all SCM business processes Four categories of different school of thoughts available to discuss about the logistics supply chain: Chain awareness school of thoughts Linkage logistics school of thoughts Information school of thoughts Integration school of thoughts
SUPPLY CHAIN CONCEPT
What is supply chain?
A supply chain is the alignment of firms that bring products or services to market.from Lambert, Stock, and Ellram in their book Fundamentals of Logistics Management
A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. From Chopra and Meindl in their book Supply Chain Management: Strategy, Planning, and Operations
SUPPLY CHAIN CONCEPT
A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.from Ganeshan and Harrison at Penn State University in their article An Introduction to Supply Chain Management
SUPPLY CHAIN CONCEPT
The term supply chain management arose in the late 1980s Came into widespread use in the 1990s. Prior to that time, businesses used terms such as logistics and operations management Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service
SUPPLY CHAIN CONCEPT
Businesses depend on their supply chains to provide them with what they need to survive and thrive Companies that learn how to build and participate in supply chains will have a competitive advantage in their markets.
quality
time
Logistics advantage
cost
SUPPLY CHAIN CONCEPT
There is a difference between the concept of supply chain management and the traditional concept of logistics: Logistics typically refers to activities that occur within the boundaries of a single organization Supply chains refer to networks of companies that work together and coordinate their actions to deliver a product to market.
SUPPLY CHAIN CONCEPT
Also traditional logistics focuses its attention on activities such as procurement, distribution, maintenance, and inventory management. Supply chain management acknowledges all of traditional logistics and also includes activities such as marketing, new product development, finance, and customer service.
SUPPLY CHAIN CONCEPT
Supply chain management views the supply chain and the organizations in it as a single entity. It brings a systems approach to understanding and managing the different activities needed to coordinate the flow of products and services to best serve the ultimate customer.
Supply chain of manufacturing company
SUPPLY CHAIN CONCEPT
Each supply chain has its own unique set of market demands and operating challenges Companies in any supply must make decisions individually and collectively in five areas:
1. Productionwhat products? How much? When? 5. Informationhow much data should be collected and how much information should be shared? 2. Inventorywhat inventory and how much should be stocked at each stage in a supply chain?
4. Transportationhow should inventory be moved from one supply chain location to another?
3. Locationwhere should facilities for production and inventory storage and cost effective
SUPPLY CHAIN ISSUES
Most supply chain management facing the following problems:
Distribution network configuration
Distribution strategy
Information
Inventory management
Cash-flow
SUPPLY CHAIN NETWORKS
Supply chain network enables the companies to figure out the members, position, and identify key members in the supply chain. Each company has existing supply chain; in fact each company buys some raw materials from some suppliers and sells some products to end customers or users. Identifying network structure can be very confusing after certain point
SUPPLY CHAIN NETWORKS
Network structure can explode after a while and it would be overwhelming to identify all members, and even harder to manage all the links in the system. It is critically important to identify the key members of the supply chain Link the business processes and management components with more important ones
