Logistics management 2

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Logistics management 2

  1. 1. Logistics
  2. 2. Objective of information and logistics managementMinimise logistics costs Deliver maximum customer service
  3. 3. Objectives of the supply chain manager1. Communication increase along chain – uninterrupted flow2. Cost control: decreasing inventory, keeping high C-service levels … decrease supplier base and develop supplier relationships3. Standardisation of parts … on time, happy customers, reduced inventory …
  4. 4. Factors to be taken into consideration• IT systems• Cost• Customers
  5. 5. ITData on:• Inventory• Transportation• Distribution facilities• Customers throughout supply chain• Invoices and payments
  6. 6. Cost & C-service Transport Inventory Stockout Communication Materials handling Dependability Warehousing Time Order processing ConvenienceTotal logistical cost factors Customer service factors
  7. 7. How customer service standards will differ by type of firmType Customer service standardWholesaler At least 98 percent of orders filled accuratelyManufacturer Order cycle time of no more than five daysRetailer Returns accepted within 30 daysAirline At least 90 percent of arrivals on timeTrucker A max of 5 percent loss and damage per yearRestaurant Lunch served within 5 minutes of order
  8. 8. PRINCIPLES OF SUPPLY CHAIN MANAGEMENT1. Communication2. Flexibility, inventories and customer service3. Decision-making4. Metrics and data-collection:• Quality• Delivery• Flexibility• Cost• After-sales support
  9. 9. COMMUNICATIONA clever retailer would share the point-of-sale data and forecasts with suppliersTill point link from retailer to supplier …automatic ordering …
  10. 10. THE BASIS FOR GOOD CUSTOMER SERVICE InfluenceFlexibility Customer service Influence Influence Inventory
  11. 11. DECISION-MAKING strategic tactical operational
  12. 12. PRINCIPLES OF SUPPLY CHAIN MANAGEMENT1. Communication2. Flexibility, inventories and customer service3. Decision-making4. Metrics and data-collection:• Quality• Delivery• Flexibility• Cost• After-sales support
  13. 13. METRICS AND DATA COLLECTIONMetric = standard of measurementagainst performance … benchmarkCan only KNOW if have data …
  14. 14. Logistics costs: • Transportation • Operation of distribution centres • Management of finished goods inventories • Order processing for salesSource: Kerin, Hartley, Berkowitz & Rudelius, 2006: Marketing, McGraw Hill
  15. 15. (1) quality• functionality• conformance• reliability• durability• safety• serviceability• aestetics
  16. 16. (2) delivery• speed• reliability
  17. 17. (3) flexibility• mix flexibility• changeover flexibility• design flexibility• volume flexibility
  18. 18. (4) costJust so that ops and supply chain usually account formost of organisations’ cost … thus target for costreduction …
  19. 19. (5) after-sales supportEspecially if there is a high price tag to product …
  20. 20. Pitfalls of supply chain inventory management and their symptoms
  21. 21. Pitfalls1. No supply chain metrics2. Inadequate definition of customer service3. Inaccurate delivery status data4. Inefficient information systems5. Ignoring the impact of uncertainties6. Simplistic inventory stocking policies7. Discrimination against internal customers
  22. 22. Pitfalls8. Poor coordination9. Incomplete shipment methods analysis10. Incorrect assessment of inventory costs11. Organisational barriers12. Product-process design without supply chain considerations13. Separation of supply chain design from operational decisions14. Incomplete supply chain
  23. 23. • Higher competition i.e. pimp local manufacturing• Longer order-to-delivery times• Less-dependable forecasts• Reduced production flexibility• Higher levels of inventory• Thus, coordination should be better
  24. 24. Improving supply chain management• Integration• Coordination General coordination Multi-plant coordination
  25. 25. = systematic approach toexamining the development of competitive advantage
  26. 26. Firm infrastructure HRMSupportactivities Technology department margin Procurement Inbound Operations Outbound Marketing Service logistics logistics And margin Sales Primary activities
  27. 27. Core business processes• Product development• Inventory management• Order-to-payment• Customer service

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