Logistics - Strategy Formulation & Implementation

1. Logistics Management Logistics - Strategy Formulation & Implementation Anand Subramaniam

4. Link – Firm’s & Logistics Strategy

5. Firm’s - Strategies / Business Model Business Strategy Market Entry / Exit / Compete External PEST Factors Internal Vision Competencies Financial Order Winner / Qualifiers (Competing Priorities) Cost, Quality, Delivery, Flexibility, Service Make To Stock Structural Decisions Infra -structural Decisions Facility / Location Capacity Make To Order Process / Layout Techno-logy SC Design Logistic Design Quality Sourcing People Planning Systems Inventory Org Structure Alignment Alignment

7. Logistics – Goals / Decisions

8. Is this your current situation ? SEND TO “ RIGHT” LOCATIONS MANAGE WAREHOUSES BUY “ RIGHT” PRODUCT MANAGE REPAIRS COMPUTE REQUIRE- MENTS

9. Or have this problem? SEND TO “ RIGHT” LOCATIONS MANAGE WAREHOUSES BUY “ RIGHT” PRODUCT MANAGE REPAIRS No Inventory Or Inventory Obsolescence COMPUTE REQUIRE- MENTS

10. Logistics Definition The task of coordinating Material & Information Flow acros the supply chain

11. Logistics – A Coordinator Carrier Customs broker Customer Receiving location Supplier Distribution center Freight forwarder Manufacturing plant Logistics - A Coordinator Assembly plant Cross dock

12. Align Goals – Firm’s & Logistics Logistics Goals Facility / Location Material Handling Operations & Firm’s Strategy Information Systems Investment Management Planning & Control Performance Measures Logistics Simulation Optimisation Drive Regulatory Compliance Reduce Time to Market Improve Uptime Optimise Operations Supply chain Visibility Traceability Fulfill, Flexible Accurate Improve Capacity, quality Improve Asset, Performance Improve Visibility. Inventory

14. Logistics Challenges Inventory / Materials Inventory levels Control methods Forecasting Inventory Planning Planning & Procurement Wave Management Transport Strategy Modes of transport Routing / scheduling Shipment size / consolidation Distribution Requirements Planning Customer Service Written statement of CS policy Technical services System Accuracy Installation, warranty, alterations, repairs, parts Customer claims/ complaints Facility / Location Number, size & location of facilities Assignment of stocking points to sourcing points Assignment of demand to stocking or sourcing points Location & Yard Management

15. Logistics – Decision Focus Order Releasing & Expediting Suppliers Contracting, Vendor Selection, Forward Buying Developments of Suppliers-Buyer Relationships Purchasing Order Picking & Restocking Seasonal Space Choices & Space Utilisation Equipment Selection, Layout Design Warehousing Expediting Deliveries Priority Rules for Customer Orders Setting Standards Customer Services Processing Orders, Filling Backorders Order Entry, Transmittal & Processing System Design Order Processing Routing, Dispatching Seasonal Equipment Leasing Mode Selection Transportation Replenish Quantities & Timing Safety Stock Levels Stocking Locations & Control Policies Inventories #, Size & Location of Warehouses, Plants & Terminals Facility Location Operational Tactical Strategic Decision Area

16. Logistics - Networks

17. Logistics Networks – Product Flow Links The movement of materials between various inventory storage points ( nodes ). Nodes Points where the flow of inventory is temporary stopped (e.g. retail stores, warehouses, factories, vendors).

18. Logistics Networks – Information Flow Links (Non)/Electronic Methods - Revenues, Product costs, Inventory. levels, Warehouse, Utilisation, Forecasts, Transportation Rates Nodes Data collection & processing points - computerised or manual

20. Logistics – Strategy Formulation

21. Logistics Cycle

22. Logistics – Approach / Framework Current Approach to Market Segmentation Measure Logistics Strategy Drivers Specific Approach to Market Segmentation (Channel) Identify Key Buying Behaviours Customer Value Analysis

23. Logistics – Strategy Drivers Differentiated Distribution Total Cost Concept Mixed Strategy Standardisation Postponement Consolidation

24. Distributed Differentiation ABC Analysis = Product Costs, Sales Volume Shipment = Direct from warehouse or direct to customer Warehouse Movement = Fast (Field), Slow (Centralised) , Medium (Regional) Order = Regular, Back Orders

27. Logistics – Channel Strategies

30. Logistics – Strategy Implementation

31. Implementation Framework Form the Team Understand Current Requirements Baseline The System Understand Business Needs Identify Performance Outcomes Business Case Analysis Establish Agreement/ Business Model Develop Business Model Manage Change Process Implement And Oversight Manage Implementation

32. Measuring Logistics Performance

34. Drivers & Segmentation