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Transcript of Chapter 2
![Page 1: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/1.jpg)
Supply Chain Logistics Management
![Page 2: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/2.jpg)
Supply Chain Logistics Management
• Importance of Logistics to Business
• Logistics Value Proposition
• The Work of Logistics
• Logistics Operations
• Logistics Operating Structures
• Supply Chain Logistics Performance
![Page 3: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/3.jpg)
Supply Chain Logistics Management
• Scope of Logistics
• Logistics Operations
![Page 4: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/4.jpg)
Supply Chain Logistics Management
• Scope of Logistics
• Logistics Operations
![Page 5: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/5.jpg)
Supply Chain Logistics Management
• Scope of Logistics
• Logistics Operations
![Page 6: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/6.jpg)
Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
![Page 7: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/7.jpg)
Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
![Page 8: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/8.jpg)
Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
![Page 9: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/9.jpg)
Source: Robert V. Delaney, 11th Annual “State Of Logistics Report” © June 5, 2000
1980 GDP $2.88 trillion Logistics Cost $451 billion
15.7% of GDP Trans. Cost $214 billion
47.5 % of Logistics Cost
1999 GDP $9.26 trillion Logistics Cost $921 billion
9.9% of GDP Trans. Cost $554 billion
60.2 % of Logistics CostLogistics Transportation
$ b
illio
n
0
100
200
300
400
500
600
700
800
900
1980 1999
1000
Year
United States Logistics Costs
![Page 10: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/10.jpg)
Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
![Page 11: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/11.jpg)
Logistics Value Proposition
• Service
• Cost Minimization
Supply Chain Logistics Management
![Page 12: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/12.jpg)
Logistics Value Proposition
• Service
• Cost Minimization
Supply Chain Logistics Management
![Page 13: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/13.jpg)
Logistics Value Proposition
• Service– Logistics Service Quality Process Dimensions– Logistics Service Quality Outcome Dimensions
• Cost Minimization
Supply Chain Logistics Management
![Page 14: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/14.jpg)
Logistics Value Proposition
• Service– Logistics Service Quality Process Dimensions
• Procedures
• Contact
• Information
• Discrepancy
– Logistics Service Quality Outcome Dimensions
• Cost Minimization
Supply Chain Logistics Management
![Page 15: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/15.jpg)
Logistics Value Proposition
• Service– Logistics Service Quality Process Dimensions– Logistics Service Quality Outcome Dimensions
• Timeliness
• Availability
• Condition
• Accuracy
• Cost Minimization
Supply Chain Logistics Management
![Page 16: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/16.jpg)
Logistics Value Proposition
• Service Benefits
• Cost Minimization
Supply Chain Logistics Management
![Page 17: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/17.jpg)
The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling, Packaging
• Facility Network Design
Supply Chain Logistics Management
![Page 18: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/18.jpg)
Integrated Logistics
OrderProcessing
Inventory
Transportation
FacilityNetwork
Warehousing, Material Handling
![Page 19: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/19.jpg)
The Work of Logistics
• Order Processing– order receipt, order assembly, order delivery,
invoicing & collection
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
![Page 20: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/20.jpg)
The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
![Page 21: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/21.jpg)
The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
![Page 22: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/22.jpg)
The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling– sorting, sequencing, product modification &
assembly, and transportation consolidation
• Facility Network Design
Supply Chain Logistics Management
![Page 23: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/23.jpg)
The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
![Page 24: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/24.jpg)
Logistics Operations
Customers
Enterprise
CustomerService
ManufacturingSupport
Procurement(Purchasing)
Suppliers
Information Flow
Inventory Flow
![Page 25: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/25.jpg)
Logistics Operations
• Inventory Flow– Customer Service– Manufacturing Support– Purchasing (procurement) Support
• Information Flow
Supply Chain Logistics Management
![Page 26: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/26.jpg)
Logistics Operations
• Inventory Flow
• Information Flow
Supply Chain Logistics Management
![Page 27: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/27.jpg)
Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
![Page 28: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/28.jpg)
Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
![Page 29: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/29.jpg)
Echeloned Structured Logistics
Supplier
Storage orConsolidation
Warehouse Manufacturer
Wholesaler’s Warehouse
orDistribution
Center
Retailer Customer
![Page 30: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/30.jpg)
Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
![Page 31: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/31.jpg)
Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
![Page 32: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/32.jpg)
Combined Echelon and Direct Structured Logistics
SupplierStorage or
ConsolidationWarehouse
Manufacturer
Wholesaler Warehouse
orDistribution
Center
Retailer Customer
Direct Delivery
![Page 33: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/33.jpg)
Supply Chain Logistics Performance
• Performance Cycle Structure
Supply Chain Logistics Management
![Page 34: Chapter 2](https://reader035.fdocuments.in/reader035/viewer/2022070316/555c6cf8d8b42abb748b56df/html5/thumbnails/34.jpg)
Sources of Performance-Cycle Variation
OrderTransmission
Time Range - Days1/2 31
CustomerDelivery
Time Range - Days1/2 31
OrderTransportation
Time Range - Days2 104
OrderSelection
Time Range - Days1 202
OrderProcessing
Time Range - Days
1 42
Total Performance Cycle
Time Range - Days
5 4010