WK9 Logistics Lecture


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WK9 Logistics Lecture

  1. 1. WK9 Agenda<br />Revised homework<br />Logistic lecture and exercise<br />Pacademy Case Study<br />1<br />MIB, BBA 2010<br />
  2. 2. Logistics Myths<br />True or false<br />Logistics mean logic.<br />Logistics is about transportation cost.<br />3PL logistics company handle custom for its customers.<br />MIB, BBA 2010<br />2<br />
  3. 3. Logistics Exercise<br />In three groups, choose your product.<br />Write the process flow of supply chain starting from raw material to customers.<br />What are the issues to consider?<br />Where are the cost incur?<br />Where can we add value?<br />How can we improve efficiency?<br />MIB, BBA 2010<br />3<br />
  4. 4. Logistics<br />Council of Logistics Management definition:<br />“Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.”<br />MIB, BBA 2010<br />4<br />
  5. 5. Logistics<br />MIB, BBA 2010<br />5<br />
  6. 6. © 2008 Prentice Hall<br />1-6<br />Activities in the Logistical Channel<br />Customer service<br />Facility location decisions<br />Inventory management<br />Order management<br />Production scheduling<br />Returned products<br />Transportation management<br />Demand forecasting<br />Industrial packaging<br />Materials handling<br />Parts and service support<br />Procurement<br />Salvage and scrap disposal<br />Warehousing management<br />
  7. 7. © 2008 Prentice Hall<br />1-7<br />The Systems and Total Cost Approaches to Logistics<br />Total Cost Approach<br />Cost trade-offs: changes to one activity cause some costs to increase and others to decrease<br />Total Logistics Concept: to find the lowest total cost that supports an organization’s customer service requirements<br />
  8. 8. Logistical Relationships within the Firm<br />Finance<br />LIFO<br />FIFO<br />Production<br />Marketing<br />Place Decisions<br />Price Decisions<br />FOB origin/FOB destination pricing systems<br />Landed costs<br />Phantom freight<br />Freight absorption<br />MIB, BBA 2010<br />8<br />
  9. 9. © 2008 Prentice Hall<br />1-9<br />Responsibilities of Logistics Managers<br />A specialist<br />Freight rates<br />Warehouse layouts<br />Inventory analysis<br />Production<br />Purchasing<br />Transportation law<br />A generalist<br />Understands functional relationships<br />Relates logistics to other firm operations, suppliers, customers<br />Controls large expenditures<br />The CEO of Wal-Mart began his Wal-Mart career in the logistics area!<br />
  10. 10. © 2008 Prentice Hall<br />2-10<br />Different Supply Chain Configurations<br />
  11. 11. © 2008 Prentice Hall<br />2-11<br />Supply Chain Management and Integration<br />Third-Party Logistics (3PL)<br />Logistics outsourcing<br />Contract logistics<br />3PL provides transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.<br />Fourth-party logistics (4PL) primarily used in global companies: assembles and manages the resources, capabilities, and technology to deliver a comprehensive supply chain solution.<br />Lead logistics provider (LLP)<br />Supply chain software<br />
  12. 12. General Types of Information Management Systems<br />MIB, BBA 2010<br />12<br />
  13. 13. Electronic Commerce and Logistics<br />Internet impacts include:<br />Logistics functions<br />Transportation<br />Order management<br />Channel design<br />Intermediaries <br />4 categories of logistics exchanges<br />Enhancing procurement services<br />Matching shippers and carriers<br />Executing relevant transactions<br />Transacting with partners<br />What are the differences between Electronic and Traditional Fulfillment? Think about your online purchasing.<br />MIB, BBA 2010<br />13<br />
  14. 14. Order Management<br />Order management is the activities that take place in the period between the time a firm receives an order and the time a warehouse is notified to ship the goods to fill that order<br />Order planning-connected to sales forecasting<br />Order transmittal<br />Order processing<br />Order picking and assembly<br />Order delivery<br />Order cycle defined by the buyer: time from when an order is placed to when the goods are received. Also called replenishment cycle<br />Getting shorter<br />More precise delivery times<br />Customer can track orders<br />Quality is important and is benchmarked<br />MIB, BBA 2010<br />14<br />
  15. 15. Customer Service<br />Activity to make customers happy<br />Value-added activities provided by customer service include:<br />Placing bar code labels on cartons<br />Arranging a carton, pallet, or truck in the sequence the customer would like to unload it<br />Shrink-wrapping<br />Inserting documents into cartons<br /> Blending products<br />Adding price tags<br />Adding graphics for export goods<br />Assembling kits<br />Establishing a customer service program<br />Ask the customer what is important to them<br />Investigate the service offered by competitors<br />Consider the cost of alternative service programs<br />Analyze the information and write the objectives<br />Using the Internet to improve customer service<br />MIB, BBA 2010<br />15<br />
  16. 16. Element of Logistics System<br />Protective Packaging and Materials Handling<br />Product characteristics :physical, chemical, environmental, etc.<br />Packaging: box, wooden pallet, label, etc.<br />Material Handling: automation, flexibility, safety, layout, cost, maintenance, unit load, ergonomic, requirement, JIT, energy, etc.<br />MIB, BBA 2010<br />16<br />
  17. 17. Element of Logistics System<br />2.) Transportation(domestic): node, links, air, water, motor carriage, rail, pipeline, intermodal transportation, routing guides<br />Small volume shipper: Fedex, UPS, DHL, NTC, TNT, Post office <150 pound<br />LTL shipper(less than truckload, <150<10,000 pounds): Yellow Freight, Roadway, ABF<br />Truckload and carload shipper: Schneider National Van Carriers, J.B. Hunt Transport<br />MIB, BBA 2010<br />17<br />
  18. 18. Element of Logistics System<br />3.) Distribution Center, Warehouse, and Plant Location<br />Number of facilities: service level, software, time to customers<br />Facilities location: natural resource, labor, market, tax, subsidies, transportation, customers, trade pattern<br />Lowest cost location: grid system, center of gravity approach<br />MIB, BBA 2010<br />18<br />
  19. 19. Element of Logistics System<br />4) Inventory management<br />Inventory Turnover= Cost of goods sold/average inventory<br />Turnover, carrying costs, and stock out costs<br /><ul><li>Reorder pointROP = Daily Demand x Replenish Cycle + Safety Stock under uncertainty</li></ul>Economic order quantity EOQ= √2AB/C<br />JIT, Inventory Tracking, Vendor manage inventory, <br />MIB, BBA 2010<br />19<br />
  20. 20. Element of Logistics System<br />5)Warehousing<br />Public, private, contract warehousing<br />Design warehousing: quantity, character of goods, purposelayout<br />Safety, security and stock control<br />MIB, BBA 2010<br />20<br />
  21. 21. Element of Logistics System<br />6) Procurement<br />MIB, BBA 2010<br />21<br />
  22. 22. Element of Logistics System<br />7) International logistic<br />MIB, BBA 2010<br />22<br />
  23. 23. Element of Logistics System<br />8) Financial and accounting control<br />Worker productivity: scheduling, monitoring<br />Goal to achieve lowest cost per volume of output<br />Product recall: Batch ID, Six Sigma<br />Security: building, computer, document, etc.<br />Energy saving<br />MIB, BBA 2010<br />23<br />
  24. 24. Element of Logistics System<br />9) System Analysis<br />Customerprofitability analysis<br />Warehousing productivity analysis<br />Transportation cost analysis<br />Consolidation analysis<br />Direct product profitability analysis<br />Benchmarking<br />Industry standards analysis<br />MIB, BBA 2010<br />24<br />
  25. 25. Pacademy Case & Homework<br />Revised homework due this Friday<br />Read Pacademy case and apply our strategy formulation concepts. Draw the diagrams.<br />What other information would be beneficial for your case analysis?<br />What are your recommendations?<br />MIB, BBA 2010<br />25<br />