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Logistics Management
Introduction to the Course
Jing YuanFeb, 2008
Introduce Yourself
Let’s me know who you are.What’s logistics management?Supply chain management Vs. logistics management
…
Outline
Introduce yourselfWho I amCourse introduction
– Course description
– Learning objectives
– Textbooks
– Grading policy
– Schedules
Outline
Introduce yourselfWho I amCourse introduction
– Course description
– Learning objectives
– Textbooks
– Grading policy
– Schedule
Course description
An introductory course in the analysis, design and operation of logistics and supply chain
Presented through lectures along with several case studies and experiments
The lectures consist of nine parts
Learning objectives
Knowledge the strategic role of the supply chain
An understanding of logistic systems & their management problems
Ability to devise workable solutions in business situations
Textbooks
Textbook– Harrison, A. and Hoek, R. V. (2006) Logistics
Management, second edition, 机械工业出版社
References (not required)– Christopher, M. (2006) Logistics and Supply
Chain Management: Creating Value-adding Network, third edition, 电子工业出版社
–张余华,现代物流管理,华中科技出版社, 2006年。
Lecture Organization
LecturingVideosGroup exercisesCase discussionCase study presentations
Grading Policy
Grading– Assignment and Quiz 10%
– Midterm 20%
– Final Project 70%
Midterm– Case study
– Final presentation
Final project– A closed examination held in the last week of term
Schedule
Lectures– 14 weeks
Case study presentations– 2 weeks
Experiments– 2 weeks
Logistics and supply chain
Logistics Management
logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
Seven-eleven convenience store– Describe the key logistics processes at 7-11.
– What differences between the early reform and the regional distribution center at 7-11.
– What do you think are the main logistics challenges in running the 7-11 operation.
Case study
Case study
Centralized distribution
No distribution center
Built its own distribution center---joint distribution
First stage Second stage Third stage
Key issues
1111What is supply chain, and how is it structured?
2222What is the purpose of a supply chain?
The Supply Chain Concept
Development of the Concept– Total systems cost - remains an important element
of logistics analysis.
– Outbound logistics – the warehousing and distribution of finished goods.
– Inbound logistics – the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required.
– Value chain analysis integrated logistics activities.
Business Logistics in a Firm
A supply chain is a group of partners who collectively convert a basic commodity (upstream) into a finished product (downstream) that is valued by end-customers, and who manage returns at each stage.
The Supply Chain management Concept
DefinitionDefinitionDefinitionDefinitionPlanning and controlling all of the processes that link partners in a supply chain together in order to serve needs of the end-customer.
The process starts with several external suppliers that move milk, cardboard, and plastic to the processing plant.After the milk is processed and packaged, it is delivered to retailers, who sell it to customers. The alternative delivery system is delivery from a warehouse directly to customers’ homes.
Supply chain: structure and tiering
Supply chain: structure and tiering
Supply chain can be fairly complex. The supply chain for a car manufacturer includes hundreds of suppliers, dozens of manufacturing plants (for parts) and assembly plants (for cars), dealers, direct business customers, wholesalers, customers, and support functions such as product engineering and purchasing.
Logistics concept
DefinitionDefinitionDefinitionDefinitionThe task of coordinating material flow and information flow across the supply chain.
Activity 1
Wheat Flour
Praline Wafers
ChocolateConfectionerymanufacturer
Packing
Creamery(milk)
Cocoabeans
SugarVegetable
oilCocoabutter
LecithinEmulsifiers,
Salt, etc.
Printedmaterials
Aluminium Fiberboard
Multipleretailers
Wholesalers
Others(hospital etc.)
Endcustomers
logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
Key issue
1111What is the relationship between material flow and information flow?
Case study: Seven-eleven
Case study: Seven-eleven’s distribution strategy
Delivery arrives from over 200 plantsDelivery is cross docked at DC (over 80
DCs for food)Food DCs store no inventoryCombined delivery system: frozen foods,
chilled foods, room temperature and hot foods
11 truck visits per store per day (compared to 70 in 1974)
No supplier (not even coke!) delivers direct
Case study: Seven-eleven’s Information Strategy
Quick access to up to date information (as contrasts with data)
– High speed data network linking stores, headquarters, DCs and suppliers
– Store hardware– Store computer– POS registers linked to store computer– Graphic Order Terminals– Scanner terminals for receiving
Integrated Logistics Management
Material and information flow
Material and information flow
Material flow
Information flow
Activity 2
Describe the material and information flow in the supply network affecting one of the major products in Activity 1.
logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
Key issues
1111How do products win orders in the marketplace?
2222How does logistics contribute to competitive advantage?
Creating logistics advantage: three basic ways
Logistics advantageLogistics advantage
quality time
cost
Creating logistics advantage: controlling variability
Variability undermines the dependability with which a product or service meets target.
Order winners and order qualifiers
Order winnersare factors that directly and significantly help products to win orders in the marketplace.Customers regard such factors as key reasons for buying that product or services.
Different logistics performance
objectives
Order qualifiersare factors that are regarded by the market as an ‘entry ticket’.Unless the product or service meets basic performance standards, it will not be taken seriously.
Activity 3
Compare the details for characteristics of both household appliance and mobile phone’s product lines.
Go on to identify the principal order winners and qualifiers for each product.
Vs.
logistics and Supply chain1
Material and information flow2
Competing through logistics3
Logistics strategy4
The value chain: Linking supply chain and business strategy
NewProduct
Development
Marketingand
Sales Operations
Business Strategy
New ProductStrategy
MarketingStrategy
Supply Chain Strategy
New product Development
Marketingand sales
Operations Distribution Service
Finance, Accounting, Information Technology, Human Resources
How to Achieving Strategic Fit
Understanding the Customer– Lot size
– Response time
– Service level
– Product variety
– Price
– Innovation
How to measure?Implied Demand Uncertainty
Levels of Implied Demand Uncertainty
Detergent High Fashion
Low High
Price Responsiveness
Customer Need
Implied Demand Uncertainty
Understanding the Supply Chain: Cost-Responsiveness Efficient Frontier
High
High
Low
Low
Cost
Responsiveness
Achieving Strategic Fit
Implied uncertainty spectrum
Responsive supply chain
Efficient supply chain
Certain demand
Uncertain demand
Responsiveness spectrum Zone o
f
Strateg
ic Fit
Strategic Scope
Suppliers Manufacturer Distributor Retailer Customer
Competitive Strategy
Product Dev. Strategy
Supply Chain Strategy
Marketing Strategy
Drivers of Supply Chain Performance
Efficiency Responsiveness
Inventory Transportation Facilities Information
Supply chain strategy and structure
Drivers
Competitive strategy
Considerations for Supply Chain Drivers
Driver Efficiency Responsiveness
Inventory Cost of holding Availability
Transportation Consolidation Speed
Facilities Consolidation /Dedicated
Proximity /Flexibility
Information What information is best suited foreach objective