Logistics Supply Chain Processes

1
Logistics Supply Chain Processes

• Chapter 2

2
Why EMC Profile?

• What were the goals of EMC?
•  What  happened to inventory levels?
• What is size of market?
• What is the scope of the organization?

3
4Rs of Logistics

• Right product
• Right quantity
• Right condition
• Right place
• Right time
• Right customer
• Right cost

4
Time Periods

• 1970s decade for products and markets
• 1980s decade for finance
• 1990s decade for logistics
• 2000s decade for supply chain management

5
What is happening to the role of logistics in the
business world?

• What is logistics?  What is its mission?
• What is table 2-2 illustrating?
• Explain figure 2-2.
• Explain the analogy between health care and
  logistics costs.  see figure 2-3.
• What is utility?  What kinds of utility does
  logistics provide?

6
Utility Creation
Corporate Functions
Types of Utility
7
How does Logistics Impact World Society?

• Explain impact on variety of goods available.
• Explain impact on prices.
• Explain impact on land values.
• Explain impact on labor rates. 

8
Basic Logistics Issues

• How can an organization respond to seasonal
  demand? (fruits and vegetables, cereals, holiday
  gifts, back to school, Thanksgiving turkeys)
• What is materials Requirement Planning? Why does
  it have to be done?
• What is distribution Requirements planning? Why
  should it be done?

9
Logistics and Marketing

• Why should logistics be involved in traditional
  marketing decisions/ What decisions should they
  be involved in?
• What is the difference in push vs. pull marketing
  efforts?
• Is one easier to forecast demand? Why is demand
  forecasting important?

10
Marketing and Logisticsin the Customer Firm
Customer Service
11
Logistics Savings Can MAGNIFY Corporate
Profitability

• A Logistics Savings of
• 1
• 2
• 10
• 100
• 5000
• 40,000

• Equals a Product Sales Increase of
• 25
• 50
• 250
• 2,500
• 125,000
• 1,000,000

12
Customer Service

• How important is customer service?
• What is customer service?
• See table 2-4.

13
Lead Time

• What is lead time?
• from the customers perspective?
• From the supplier's perspective?

14
Balance

• Why does it matter about the balance between
  inbound and outbound shipments?

15
Logistics Analysis

• What do tables 2-5 and 2-6 illustrate about the
  use of activity center analysis?
• How does Figure 2-6 illustrate the need for nodal
  analysis?
• How do Figures 2-7 and 2-8 illustrate the
  logistics channel approach?
• Which is the best approach to analyzing costs
• Activity center
• Node
• Channel

16
Channels

• What type of channel is more common?
• See Figure 2-9

17
Systems Analysis

• What is systems analysis?
• How do you optimize a system?
• What is a short run/static analysis?
• What is a dynamic analysis?
• To do dynamic analysis why do you need to
  understand relationships between each activity
  and the systems objective.

18
Systems Objectives

• Price
• Customer Service
• How does the order cycle effect price and
  customer service?
• How does product substitutability influence cost
  and customer service?
• How does inventory influence cost and customer
  service? Fig 2-13.
• How does transportation influence cost and
  customer service? Fig 2-14.

19
Competitive Factors Affecting the Cost and
Importance of Logistics

• Order Cycle

• Substitutability
• Other like products on the market
• Inventory Effect
• Transportation Effect
• Trade off inventory and transportation costs
  against decreasing lost sales

Units of Inventory Needed by Customer
Order Cycle Length (Days)
pp. 58 -60
20
U.S. Logistics Costs for 1997(Billions of U.S.
dollars)
21
Logistics Costs as Part of GDP
22
Last Slide