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1. LOGISTICS AND SUPPLY
CHAIN

2. WHAT IS SUPPLY CHAIN?
 Supply chain is the network of facilities
(warehouse, factories, terminals, ports,
stores and homes), vehicles (trucks,
trains, planes, ocean vessels, and logistic
information system (LIS) connected by an
enterprises supplier’s suppliers and its
customers’ customers).

3. Supply
Sources:
plants
vendors
ports
Regional
Warehouses:
stocking
points
Field
Warehouses:
stocking
points
Customers,
demand
centers
sinks
Production/
purchase
costs
Inventory &
warehousing
costs
Transportation
costs
Inventory&
warehousing
Transportation
costs

4. WHAT IS SUPPLY CHAIN?
 Supply Chain Management (SCM) is now an
expanded responsibility for business
enterprises to attain value optimisation.
 Integrates Procurement, Production,
Distribution and includes all functions in
fulfilling a customer request. These include
but not limited to new product development,
marketing, operations, distribution, finance
and customer service.

5. Flows in a supply chain
Customer
Information
Product
Funds

6. LOGISTICS vis a vis SUPPLY CHAIN
 Logistics include physical distribution,
warehousing,freight transportation.
 Logistics is defined by the Council of Logistics
management as “that part of the supply chain
that plans, implements and controls the efficient,
effective flow and storage of goods, services and
related information from the point of origin to the
point of consumption in order to meet customers’
requirements”.

7. Why is supply chain management
so important?
• To gain efficiencies from procurement,
distribution and logistics
• To make outsourcing more efficient
• To reduce transportation costs of
inventories
• To meet competitive pressures from
shorter development times, more new
products, and demand for more
customization

8. ELEMENTS OF SUPPLY CHAIN
 Simple supply chain is made up of several elements
A. Customers
B. Planning
C. Purchasing
D. Inventory
E. Production
F. Transportation
linked by movement of products.
 It operates at three levels: Strategic,Tactical,Operational

9. ELEMENTS OF SUPPLY CHAIN
 Strategic -> Product Development, Customers,
Manufacturing, Suppliers,Logistics
 Tactical -> Cost benefit measures viz
Industry Best practices, Purchase Strategy,
Warehouse Strategy, Inventory Control,
Cost effective Transportation
 Operational-> Make schedule changes to production,
Purchasing agreements with Suppliers,
Taking orders from cutomers,
Moving Products

10. KEY DRIVERS OF SUPPLY CHAIN
The Key drivers for best in class supply chain are
 Inventory
Transportation
Information
Facilities
Need to be considred in the Design,Plam and Operation stage

11. KEY DRIVERS OF SUPPLY CHAIN
 Design Phase
- Structuring the Supply Chain, Chain configuration
and the processes at each stage
- Decisions on location, capacities,
warehousing facility, products, mode of distribution
(Multimodal), type of info systems
- Long Term and expensive to alter on short
notice
- To take into account uncertainties in market
conditions

12. KEY DRIVERS OF SUPPLY CHAIN
Planning Phase
 To define set of operating policies that govern short
term operations
 Establish constraint within which planning must
be done.
 Forecast of sale / market to supply point
linkage / planned buildup of inventories
 Make or buy decisions, business continuity,
 size of marketing promotion.
 Consider uncertainty of demand, exchange rate,
taxation issues
 Use the flexibility in the design to optimize the
performance in short term

13. KEY DRIVERS OF SUPPLY CHAIN
Operation Phase
 Time horizon – weekly / daily-
 Implement operating policies in the
best possible manner
 Scheduling process
 Exploit reduction of uncertainty and
optimize performance