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The wonderful world ofLOGISTICS

STEFAN NYSTRÖM

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LOGISTICSAGENDA

The macrophilosophy History Logistics within the company Working as a logistician

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WHAT IS LOGISTICS ?

Approach and principles to plan, organize, coordinate, direct and control the flow of material from rawmaterial supplier to end consumer.

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THE LOGISTIC CHAIN

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Skriv namn hä rSkriv tite l h ä r

Skriv namn hä rSkriv tite l h ä r

Skriv namn hä rSkriv tite l h ä r

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PRIMARY GOAL ?

PROFITABILITY

RECIPE:

1. Flexible manufacturing 2. Quick distribution

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the DuPont Chart SALES + GROSS COST OF PROFIT SALES

- NET PROFITDEPRECIATION - OTHER / NET PROFITFINANCIAL EXPENSES MARGININCOME + SALES x RETURN ON

INVESTMENTCURRENT / INVESTMENTASSETS TURNOVER +INVENTORIES TOTAL + INVESTMENTS

FIXED AND OTHER ASSETS

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HISTORY

French general, Marquis de Longis, planning the supply of the front line, late 17th century.

World War 2, invasion in Normandie. ’Desert storm’, 10.000.000 tons of arms

ammunition and materials from USA and Europe.

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MARKETING MIX Philip Kotler

4PPRODUCTPRICE

PROMOTIONPLACE

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COST APPORTIONMENTProduction Distribution

1800 19002000

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LOGISTICS within the company

PUR CHASINGD EPT

PROD UCTIOND EPT

SAL ESD EPT

SU PPL IESD EPT

M AN AG IN GD IR EC TO R

The ´Pipe´syndrom

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INVENTORY

What levels?

When?

Where?

WHY?

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WHY INVENTORY ?

Lead time is longer than promised delivery time

Seasonal fluctuation in raw materials Seasonal fluctuation in demand Achieve transportation economy Forecast errors Achieve production economy Advantage of quantity purcase discounts

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ABC - classification

SALES

0%

20%

40%

60%

80%

100%

VALUE

20% 40% 60% 80% 100%

Assortment / Customer

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Purchasing

Economic Order Quantity or the ’Wilson formula’

Q = 2KDVW

Q = Optimum purchase quantityK = Cost per orderD = quantity needed per periodV = value of product per unitW = Storage cost / 100 ( Internal interest rate)

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Purchasing, scheme.

Purcasing quantity

Cost

Cost per order

Total cost

Storage cost

Economic order Quantity

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Purchasing, safety buffer

Leadtime

Safety buffer

Ordered quantity

Time

Stock

Ordering point

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Purchasing, philosophies Closer relationships seller - buyer Outsourcing Customer ordered production Just - in - time philosophy Computer aid through MRP-systems

(Materials Requirements Planning) VMI ( Vendor Managed Inventory) Selfbilling

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Production

JIT TQC Flexible manufacuring Kanban Shorter adjustment times Simplify things Lean

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Rationalization of capital

Rawmtrl. Production

Factorywarehouse

Transport

Terminal

Time

Capital tied up

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Customer service

What does our competitors offer ?

Vhat does our customer demand and what does he need ?

What does a higher service level give in higher sales ?

What will it cost us ?

Cost

Income

Profit

Service

currency

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The purpose of a logistic system

the right product in the right amount at the right place at the right time at the right cost

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The logistic chain,again!

Information system

Components Inventory

Supplier Customer

Purchasing Manufacturing Distribution

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