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Logistics and Supply Chain
Management: An Overview
A Presentation to

NAPM-Wichita
by

Thomas L. Tanel, CTL,C.P.M.,CCA
President and CEO

CATTAN Services Group, Inc.
© 2010 CATTAN Services Group, Inc.
Definition of Logistics
Logistics is:
the process of planning, implementing, and
controlling the efficient, effective flow and storage
of raw materials, in-process inventory, finished
goods, services, and related information from
point of origin to point of consumption (including
inbound, outbound, internal, and external
movements) for the purpose of conforming to
customer requirements.
Source: Council of Logistics Management
Global Manufacturing
• Supplier selection
• Location selection
• Product availability
• Logistics
• Cost
• Timing
• Demand requirements
• Physical
• Labeling
• Quality
• Formula
• Electrical
• Origin
Global Distribution
• Intermodal

• Licensing

• INCOTERMS

• IFF/CHB Links

• Banking

• Sales Terms

• Customs

• Other

• Export Packing

Send anywhere . . .
to anywhere—
"Whatever it takes!"
The Logistics Process
Order Processing

Seller

Inventory
Management

Production Planning

Warehousing

Customer

Raw Material

Manufacturing

Traffic Management

Deliver to Customer

Transportation
Third Party Logistics
WHAT IS IT?
• The use of an outside logistics company to perform all or part
of a company’s material management or product distribution
function.
• It is the integration of information, inventory, warehousing,
and transportation services.
Third Party Logistics Providers
• What
• Why
• Who
• When
• How
Global Pipeline Visibility
Where is my stuff?
• Via the IFF/CHB
• Via the IMC
• Via the carrier
• Via the internet
• Via proprietary software

Supplier

Inbound
Transport

Manufacturing
Distribution

Outbound
Transport

Supply Chain Information Systems Requirements

Ultimate
Customer
Supply Chain Information Systems
PLAN

EXECUTE

MANAGE

MRP

ORDER
PROCESSING

ACCTS RECEIVE

WAREHOUSE

FIXED ASSETS

FORECASTING

IMPORT
EXPORT
TRAFFIC

ACCTS PAYABLE

DRP

PURCHASING

GEN LEDGER
Milestone Measurements

• Milestone tracking
• Alert Notification
• Plan versus actual
Tracking and Tracing
Primary Numbers
MODE
Motor
Rail
Air
Ocean

TYPE OF REFERENCE
Pro Number
Waybill Number
Air Waybill
Bill of Lading Number

Secondary Numbers
• Shipper’s invoice number
• Shipper’s bill of lading number
• Consignee’s order number
• Marks and numbers (on the packages)
• Date of pickup
• Car initial and number
• Container number
• Flight or voyage number
ASNs and Shipping Information
• What is it ?
• What does it show ?
• Types of Information ?
Data Collection
In the future, you MUST become
literate about the following:
Order No. 123456
Carton No. 789

• Scanners

F1=SPL IT

F2=OV/ UNDER

F3=COM PLETE F4= CANC EL

CLR

F UNC

SHF

CTL

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

U

R

S

W

T

Y

X

B KSP

7
4
1
0

F7
F4
F1
F10

8
5
2

F8
F5
F2

9
6
3

F9
F6
F3

ENTER

Integrated Hand-Held Radio Frequency Scanning Terminal

• Symbology

BASE
STATION

• Labels/Tags
• Radio Frequency

V

Z

• Decoder/terminals

SCANNER/RF COMBO
WITH DECODER

PWR

A

ANTENNA
IF NEEDED

• Voice Recognition
CONTROLLER

HOST COMPUTER
WITH SOFTWARE
Computer System Integration Issues
BATCH
PROCESSING

“REAL-TIME”
PROCESSING

SCAN

SCAN

ACCUMULATE

SEND TO HOST

SCAN

SCAN

ACCUMULATE
SEND TO HOST
SCAN

ACCUMULATE

SEND TO HOST

SCAN

SEND TO HOST
Legacy Systems & SCM Interface
MRP

DRP

SOP

WMS

TMS

OP

SUPPLIERS

ASN

CARRIERS

STATUS

FORWARDERS

PLAN

SHIPPERS

BOOK

CONSIGNEE

All manner of DATA is shared !

PO
Integrated Supply Chain Links
Supplier
Base/ERP

Wholesaler
Distributor

HQ
Advanced
Planning
Systems

Transportation
Carriers

Transportation
Carriers

Host ERP

Operations Management
Systems
Plant's
MES

Customer
Base/ERP

TMS and CRM

Warehouse's
WMS

Distribution
Center's WMS
EXTERNAL ENVIRONMENT

TURBULENCE
TURBULENCE
Supply Chain Optimization
Supply Chain Drivers
• Pull system focus

• Aligned for change

• Preferred Supplier

• Logistics excellence

• Electronic commerce

• Product sold is
“service”

• Customer Driven
• Synchronized supply
chain planning and
systems.

• Market value creation
Logistics—Big Picture Benefits
• Integrated logistics functions translate
into various profit contributions:
– Total logistics costs shaved by 20%
– Pretax contribution is 2.4% higher

• A typical $100 million business that
switches over can realize a savings of
2.4 million.
More Profit Potential--$$$
Any “cost saving” that can be made in total
logistics reflects savings at the rate of the
company’s cost of capital and frees up that
capital for other business purposes.
1.Logistics can have a dramatic impact on whether a
company’s profit picture will be colored red or black.
2.Logistics (other than Purchases) may account for
more than 15% of a company’s sales dollars, and
improvements of 5-25% in the various logistics
functions are within reason.
Supply Base Costs and the
Logistics Pipeline
Why consider the supplier’s
supplier and the logistics pipeline?
• The majority of supplier costs are controlled or
influenced by the pipeline.
• If we are to understand the market, we must
understand the factors which influence the
market.
• The pipeline influences the market.
General Pagonis and Logistics
A decade after taking the job of VP
of Logistics at Sears, Pagonis said,
“people just don’t pay attention to
logistics, and I try to use whatever
technique I can get visibility for it to
show that good logistics equals sales
and profits.”
The Supply Chain--Logistics Cycle
Demand Planning
• Forecasting
• Market Trends
• Market Conditions
• Business Strategies
Warehouse and Dist'n
• Inventory Control
and Accuracy
• Material Handling
• Pull and Ship
• Disposal Actions
• Documentation
Accounting Actions
• Invoice Matching
• Payables
• Volume/Qty Discounts
• Cash Discounts

Needs Recognition
• Design/Needs Specs
• Quality Standards
• Materials Planning
• Requisition Issued

Logistics
Logistics
Management
Management

Receiving Actions
• Receive, Count, Inspect
• Accept/Reject
• Returns/Reverse Logistics
• Loss and Damage Claims
• Documentation

Purchasing Actions
• Source Selection
• Source Evaluation
• Price / Cost Analysis
• Negotiation
• Contract Mgm't
• Transportation
• Supplier Certification
• Value Analysis

Traffic Actions
• Carrier Selection
• Routings
• Rates and Classifications
• Tracing / Expediting
• Freight Bill Audits
Synchronized Supply Chain Management
Network optimization software contains advance planning engines to
synchronize and optimize the supply chain channel for supplier/carrier
selection, production sourcing, and inventory pre-build decisions.
Reduce
Transportation Costs

On-Time
Delivery
Reduce
Manufacturing Costs

Orders Filled
Complete
Responsive
Production
increase turnover
reduce Waste and
obsolescence

Rapid Order
Fulfillment

reduce inventory
International Transportation and Distribution
CARRIER TYPES:
Usage, Costs
Dependability

FINANCIAL
INSTRUMENTS

versus
DRAWBACKS
IMPORT

LANDED COST
LICENSES

EXPORT
ADC in the Supply Chain
Goods
characteristics,
capacity, availability,
status

Capacity,
schedules,
status receipts

Capacity,
schedules,
status receipts,
inventory

Demands goods,
requests services,
requests receipts

Service,
capacity,
schedules,
routes, receipts
Where Have We Been?—Survival of
the Fittest
Supply Chain Compass-Five Stages
Source: Manugistics
 

The
Fundamentals

CrossFunctional
Teams

Integrated
Enterprise

Extended
Supply Chain

Supply Chain
Communities

Business Pain

Cost of quality

Unreliable order 
fulfillment

Cost of customer 
service

Slow growth, 
margin erosion

Non-preferred 
supplier

Driving Goal

Quality and cost

Customer service

Profitable 
customer 
responsiveness

Profitable growth

Market 
leadership

Organizational 
Focus

Independent 
departments

Consolidated 
operations

Integrated supply 
chains (internal)

Integrated supply 
chains (external)

Rapidly 
reconfigurable

Process 
Change

Standard 
operating 
procedures

Cross-functional 
communication

Cross-functional 
processes

Customerspecific 
processes

Reinvented 
processes

Metric

Predictable costs 
and rates

On-time, 
complete delivery

Total delivered 
cost

Share of 
customer

Net worth

IT Focus

Automated

Packaged

Integrated

Interoperable

Networked

Key Tools/
Planning

Spreadsheets

Point tools

Enterprise supply 
chain planning

Point-of-sale 
supply chain 
planning

Synchronized 
supply chain 
planning

Execution

MRP and other 
homegrown 
applications

ERP

Customer 
management 
systems

Network-centric 
commerce

MRP II
Benefits of Tracking ROI for
SCM Source: Anderson Consulting
• Improving return on assets
benefits
• Revenue growth benefits
• Improved operating
efficiencies benefits
Measuring Up – A Best Practice Model for
Evaluating Supply Chain Performance
Source:Arthur D. Little
Goal

Measure

Improved customer-order
fulfillment

Fill rate

Improved customer
satisfaction

Survey
Supplier order
fulfillment

Definition
Portion of custom orders (either external or internal)
that are on time and accurate as the customer would
determine
Systematic feedback obtained directly from
customer(external or internal); likely using a sampling
survey
Portion of supplier orders that are on time and
accurate

Supplier quantity

Non-conforming or defective items or services divided
by total at supplier interface

Procurement
effectiveness

Year-over-year cost reduction on like items (i.e., by
commodity family)

Days of supply on
hand

Inventory investment on hand (in dollars) divided by
daily ship rate (in dollars)

Inventory turns

Cost of Goods Sold (COGS) divided by average annual
inventory investment

Timing

Cash-to-cash

Elapsed time from payment of suppliers to collection
of payment from customers

Quality

Quality

Non-conforming or defective items or services divided
by total at customer interface

Operational integrity

Productivity loss

Operational productivity lost due to supply chain nonperformance

Better procurement/supplier
management

Inventory
Lord Kelvin on Measures
When you can measure what you’re
When you can measure what you’re
speaking about and express it in numbers,
speaking about and express it in numbers,
you know something about it; but when you
you know something about it; but when you
cannot measure it, when you cannot
cannot measure it, when you cannot
express it in numbers, your knowledge is of
express it in numbers, your knowledge is of
a meager and unsatisfactory kind.---Lord Kelvin
a meager and unsatisfactory kind.---Lord Kelvin
Prospects for the 21 Century
st

• A competitive advantage today may not be a
competitive advantage in the future.
• Market mobility is the key to sustainable
competitive advantage. That requires a well- oiled
supply chain.
• Darwin is often misquoted by people who say,
“Only the strong survive.” What Darwin
actually said is that it is not the strongest of the
species or the most intelligent that will
survive—it is the ones who are most responsive
to change.
Optimizing the Supply Chain
What it Means to Your Company
Supply Chain
Management

Optimization

Fulfillment and
Replenishment
Processes

Computer
Assisted Ordering
& Demand Flow
Technology

Integrated
Planning &
Forecasting
Processes

Integrated Logistics
Planning,
Forecasting &
Collaboration
Logistics—Putting It All Together
• The Logistics Celerity Challenge
• What it Means to Your Company
• Sensitivity
• Satisfaction
• Circadian Rhythm
• Synergism
Global Logistics Strategy
Source: Coopers & Lybrand Consulting
Aligning worldwide
distribution strategies
around sourcing/selling
business models

Key Requirements
• Centralized management/worldwide
integration
• Customer service options
• Sourcing initiatives and alliances
• Procurement/supplier integration
• Global network optimization
• Process-driven information systems

Reengineering the
movement of product to
improve availability and
lower net landed cost

Key Performance Measures
Shareholder Measurements
• Inventory turns
• Asset utilization
• Operating costs
• Customer satisfaction
• Loss management (asset protection)
Customer Measurements
• Product availability
• Flexibility
• On-time performance
• Speed
• Responsiveness
• Consistency
• Quality

Synchronizing
processes
across all
regions/markets

Key Organizational Processes
Planning and Control
• Configuration and scheduling
• Demand management and
communication
• Sourcing strategy
• Manufacturing strategy
• Supply chain integration
• Product life cycle
Support
• Infrastructure
• Information and technology
• Key performance indicators
World-Class Logistics
Customer
Focus

Delight the Customer
• Perfect orders
• Responsive
• Very short OTD cycle time
• On-time delivery
• Tailored logistics systems
• Easy to do business with

Focus on Growth
• Partnerships
• Tailored programs
• Product availability
• “Mutual” success

Provide
Shareholder
Value

Minimize Asset Base
• Asset consolidation
• Cross-docking, flow-through
• In-transit merge
• Greater use of third parties
• Worldwide contracting
• Network optimization
• Replace inventory with information

Understand True Logistics Cost
• Activity-based costing
• Net landed cost vs. functional lowest
costs
• External partner linkage
• Competitive cost index

Enable and
Exploit
Information
Technology

Integrate Systems
• Common applications
• Decision support tools
• Leverage capabilities of suppliers
• Real-time tracking
• Reverse logistics

World-Class Infrastructure
• Internal and external resources
• Training
• World-class people
• Constant upgrade of capabilities
• “Interest in change”
What It Means to You Personally
• Ability to view the big picture
• Grasp of supply chain concepts
• Understand the key
performance indicators of
logistics
• Use of information, enablers,
and technology

Control of the Supply Chain
THANK YOU FOR COMING

CATTAN Services Group, Inc.

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Logistics and Supply Chain Management-Overview

  • 1. Logistics and Supply Chain Management: An Overview A Presentation to NAPM-Wichita by Thomas L. Tanel, CTL,C.P.M.,CCA President and CEO CATTAN Services Group, Inc. © 2010 CATTAN Services Group, Inc.
  • 2. Definition of Logistics Logistics is: the process of planning, implementing, and controlling the efficient, effective flow and storage of raw materials, in-process inventory, finished goods, services, and related information from point of origin to point of consumption (including inbound, outbound, internal, and external movements) for the purpose of conforming to customer requirements. Source: Council of Logistics Management
  • 3. Global Manufacturing • Supplier selection • Location selection • Product availability • Logistics • Cost • Timing • Demand requirements • Physical • Labeling • Quality • Formula • Electrical • Origin
  • 4. Global Distribution • Intermodal • Licensing • INCOTERMS • IFF/CHB Links • Banking • Sales Terms • Customs • Other • Export Packing Send anywhere . . . to anywhere— "Whatever it takes!"
  • 5. The Logistics Process Order Processing Seller Inventory Management Production Planning Warehousing Customer Raw Material Manufacturing Traffic Management Deliver to Customer Transportation
  • 6. Third Party Logistics WHAT IS IT? • The use of an outside logistics company to perform all or part of a company’s material management or product distribution function. • It is the integration of information, inventory, warehousing, and transportation services.
  • 7. Third Party Logistics Providers • What • Why • Who • When • How
  • 8. Global Pipeline Visibility Where is my stuff? • Via the IFF/CHB • Via the IMC • Via the carrier • Via the internet • Via proprietary software Supplier Inbound Transport Manufacturing Distribution Outbound Transport Supply Chain Information Systems Requirements Ultimate Customer
  • 9. Supply Chain Information Systems PLAN EXECUTE MANAGE MRP ORDER PROCESSING ACCTS RECEIVE WAREHOUSE FIXED ASSETS FORECASTING IMPORT EXPORT TRAFFIC ACCTS PAYABLE DRP PURCHASING GEN LEDGER
  • 10. Milestone Measurements • Milestone tracking • Alert Notification • Plan versus actual
  • 11. Tracking and Tracing Primary Numbers MODE Motor Rail Air Ocean TYPE OF REFERENCE Pro Number Waybill Number Air Waybill Bill of Lading Number Secondary Numbers • Shipper’s invoice number • Shipper’s bill of lading number • Consignee’s order number • Marks and numbers (on the packages) • Date of pickup • Car initial and number • Container number • Flight or voyage number
  • 12. ASNs and Shipping Information • What is it ? • What does it show ? • Types of Information ?
  • 13. Data Collection In the future, you MUST become literate about the following: Order No. 123456 Carton No. 789 • Scanners F1=SPL IT F2=OV/ UNDER F3=COM PLETE F4= CANC EL CLR F UNC SHF CTL B C D E F G H I J K L M N O P Q U R S W T Y X B KSP 7 4 1 0 F7 F4 F1 F10 8 5 2 F8 F5 F2 9 6 3 F9 F6 F3 ENTER Integrated Hand-Held Radio Frequency Scanning Terminal • Symbology BASE STATION • Labels/Tags • Radio Frequency V Z • Decoder/terminals SCANNER/RF COMBO WITH DECODER PWR A ANTENNA IF NEEDED • Voice Recognition CONTROLLER HOST COMPUTER WITH SOFTWARE
  • 14. Computer System Integration Issues BATCH PROCESSING “REAL-TIME” PROCESSING SCAN SCAN ACCUMULATE SEND TO HOST SCAN SCAN ACCUMULATE SEND TO HOST SCAN ACCUMULATE SEND TO HOST SCAN SEND TO HOST
  • 15. Legacy Systems & SCM Interface MRP DRP SOP WMS TMS OP SUPPLIERS ASN CARRIERS STATUS FORWARDERS PLAN SHIPPERS BOOK CONSIGNEE All manner of DATA is shared ! PO
  • 16. Integrated Supply Chain Links Supplier Base/ERP Wholesaler Distributor HQ Advanced Planning Systems Transportation Carriers Transportation Carriers Host ERP Operations Management Systems Plant's MES Customer Base/ERP TMS and CRM Warehouse's WMS Distribution Center's WMS
  • 19. Supply Chain Drivers • Pull system focus • Aligned for change • Preferred Supplier • Logistics excellence • Electronic commerce • Product sold is “service” • Customer Driven • Synchronized supply chain planning and systems. • Market value creation
  • 20. Logistics—Big Picture Benefits • Integrated logistics functions translate into various profit contributions: – Total logistics costs shaved by 20% – Pretax contribution is 2.4% higher • A typical $100 million business that switches over can realize a savings of 2.4 million.
  • 21. More Profit Potential--$$$ Any “cost saving” that can be made in total logistics reflects savings at the rate of the company’s cost of capital and frees up that capital for other business purposes. 1.Logistics can have a dramatic impact on whether a company’s profit picture will be colored red or black. 2.Logistics (other than Purchases) may account for more than 15% of a company’s sales dollars, and improvements of 5-25% in the various logistics functions are within reason.
  • 22. Supply Base Costs and the Logistics Pipeline Why consider the supplier’s supplier and the logistics pipeline? • The majority of supplier costs are controlled or influenced by the pipeline. • If we are to understand the market, we must understand the factors which influence the market. • The pipeline influences the market.
  • 23. General Pagonis and Logistics A decade after taking the job of VP of Logistics at Sears, Pagonis said, “people just don’t pay attention to logistics, and I try to use whatever technique I can get visibility for it to show that good logistics equals sales and profits.”
  • 24. The Supply Chain--Logistics Cycle Demand Planning • Forecasting • Market Trends • Market Conditions • Business Strategies Warehouse and Dist'n • Inventory Control and Accuracy • Material Handling • Pull and Ship • Disposal Actions • Documentation Accounting Actions • Invoice Matching • Payables • Volume/Qty Discounts • Cash Discounts Needs Recognition • Design/Needs Specs • Quality Standards • Materials Planning • Requisition Issued Logistics Logistics Management Management Receiving Actions • Receive, Count, Inspect • Accept/Reject • Returns/Reverse Logistics • Loss and Damage Claims • Documentation Purchasing Actions • Source Selection • Source Evaluation • Price / Cost Analysis • Negotiation • Contract Mgm't • Transportation • Supplier Certification • Value Analysis Traffic Actions • Carrier Selection • Routings • Rates and Classifications • Tracing / Expediting • Freight Bill Audits
  • 25. Synchronized Supply Chain Management Network optimization software contains advance planning engines to synchronize and optimize the supply chain channel for supplier/carrier selection, production sourcing, and inventory pre-build decisions. Reduce Transportation Costs On-Time Delivery Reduce Manufacturing Costs Orders Filled Complete Responsive Production increase turnover reduce Waste and obsolescence Rapid Order Fulfillment reduce inventory
  • 26. International Transportation and Distribution CARRIER TYPES: Usage, Costs Dependability FINANCIAL INSTRUMENTS versus DRAWBACKS IMPORT LANDED COST LICENSES EXPORT
  • 27. ADC in the Supply Chain Goods characteristics, capacity, availability, status Capacity, schedules, status receipts Capacity, schedules, status receipts, inventory Demands goods, requests services, requests receipts Service, capacity, schedules, routes, receipts
  • 28. Where Have We Been?—Survival of the Fittest
  • 29. Supply Chain Compass-Five Stages Source: Manugistics   The Fundamentals CrossFunctional Teams Integrated Enterprise Extended Supply Chain Supply Chain Communities Business Pain Cost of quality Unreliable order  fulfillment Cost of customer  service Slow growth,  margin erosion Non-preferred  supplier Driving Goal Quality and cost Customer service Profitable  customer  responsiveness Profitable growth Market  leadership Organizational  Focus Independent  departments Consolidated  operations Integrated supply  chains (internal) Integrated supply  chains (external) Rapidly  reconfigurable Process  Change Standard  operating  procedures Cross-functional  communication Cross-functional  processes Customerspecific  processes Reinvented  processes Metric Predictable costs  and rates On-time,  complete delivery Total delivered  cost Share of  customer Net worth IT Focus Automated Packaged Integrated Interoperable Networked Key Tools/ Planning Spreadsheets Point tools Enterprise supply  chain planning Point-of-sale  supply chain  planning Synchronized  supply chain  planning Execution MRP and other  homegrown  applications ERP Customer  management  systems Network-centric  commerce MRP II
  • 30. Benefits of Tracking ROI for SCM Source: Anderson Consulting • Improving return on assets benefits • Revenue growth benefits • Improved operating efficiencies benefits
  • 31. Measuring Up – A Best Practice Model for Evaluating Supply Chain Performance Source:Arthur D. Little Goal Measure Improved customer-order fulfillment Fill rate Improved customer satisfaction Survey Supplier order fulfillment Definition Portion of custom orders (either external or internal) that are on time and accurate as the customer would determine Systematic feedback obtained directly from customer(external or internal); likely using a sampling survey Portion of supplier orders that are on time and accurate Supplier quantity Non-conforming or defective items or services divided by total at supplier interface Procurement effectiveness Year-over-year cost reduction on like items (i.e., by commodity family) Days of supply on hand Inventory investment on hand (in dollars) divided by daily ship rate (in dollars) Inventory turns Cost of Goods Sold (COGS) divided by average annual inventory investment Timing Cash-to-cash Elapsed time from payment of suppliers to collection of payment from customers Quality Quality Non-conforming or defective items or services divided by total at customer interface Operational integrity Productivity loss Operational productivity lost due to supply chain nonperformance Better procurement/supplier management Inventory
  • 32. Lord Kelvin on Measures When you can measure what you’re When you can measure what you’re speaking about and express it in numbers, speaking about and express it in numbers, you know something about it; but when you you know something about it; but when you cannot measure it, when you cannot cannot measure it, when you cannot express it in numbers, your knowledge is of express it in numbers, your knowledge is of a meager and unsatisfactory kind.---Lord Kelvin a meager and unsatisfactory kind.---Lord Kelvin
  • 33. Prospects for the 21 Century st • A competitive advantage today may not be a competitive advantage in the future. • Market mobility is the key to sustainable competitive advantage. That requires a well- oiled supply chain. • Darwin is often misquoted by people who say, “Only the strong survive.” What Darwin actually said is that it is not the strongest of the species or the most intelligent that will survive—it is the ones who are most responsive to change.
  • 34. Optimizing the Supply Chain What it Means to Your Company Supply Chain Management Optimization Fulfillment and Replenishment Processes Computer Assisted Ordering & Demand Flow Technology Integrated Planning & Forecasting Processes Integrated Logistics Planning, Forecasting & Collaboration
  • 35. Logistics—Putting It All Together • The Logistics Celerity Challenge • What it Means to Your Company • Sensitivity • Satisfaction • Circadian Rhythm • Synergism
  • 36. Global Logistics Strategy Source: Coopers & Lybrand Consulting Aligning worldwide distribution strategies around sourcing/selling business models Key Requirements • Centralized management/worldwide integration • Customer service options • Sourcing initiatives and alliances • Procurement/supplier integration • Global network optimization • Process-driven information systems Reengineering the movement of product to improve availability and lower net landed cost Key Performance Measures Shareholder Measurements • Inventory turns • Asset utilization • Operating costs • Customer satisfaction • Loss management (asset protection) Customer Measurements • Product availability • Flexibility • On-time performance • Speed • Responsiveness • Consistency • Quality Synchronizing processes across all regions/markets Key Organizational Processes Planning and Control • Configuration and scheduling • Demand management and communication • Sourcing strategy • Manufacturing strategy • Supply chain integration • Product life cycle Support • Infrastructure • Information and technology • Key performance indicators
  • 37. World-Class Logistics Customer Focus Delight the Customer • Perfect orders • Responsive • Very short OTD cycle time • On-time delivery • Tailored logistics systems • Easy to do business with Focus on Growth • Partnerships • Tailored programs • Product availability • “Mutual” success Provide Shareholder Value Minimize Asset Base • Asset consolidation • Cross-docking, flow-through • In-transit merge • Greater use of third parties • Worldwide contracting • Network optimization • Replace inventory with information Understand True Logistics Cost • Activity-based costing • Net landed cost vs. functional lowest costs • External partner linkage • Competitive cost index Enable and Exploit Information Technology Integrate Systems • Common applications • Decision support tools • Leverage capabilities of suppliers • Real-time tracking • Reverse logistics World-Class Infrastructure • Internal and external resources • Training • World-class people • Constant upgrade of capabilities • “Interest in change”
  • 38. What It Means to You Personally • Ability to view the big picture • Grasp of supply chain concepts • Understand the key performance indicators of logistics • Use of information, enablers, and technology Control of the Supply Chain
  • 39. THANK YOU FOR COMING CATTAN Services Group, Inc.