The document discusses objectives and principles of logistics and supply chain management. The key objectives are to minimize costs while maximizing customer service. Principles discussed include increasing communication along the supply chain to ensure smooth flow, controlling costs through inventory reduction while maintaining service levels, and standardizing parts. Metrics and data collection on factors like quality, delivery, flexibility, and cost are important for benchmarking performance. Customer service standards will differ depending on the type of firm.

1. Logistics

3. Objective of information and
logistics management
Minimise logistics costs
Deliver maximum customer service

4. Objectives of the supply chain
manager
1. Communication increase along chain –
uninterrupted flow
2. Cost control: decreasing inventory,
keeping high C-service levels …
decrease supplier base and develop
supplier relationships
3. Standardisation of parts … on time,
happy customers, reduced inventory …

5. Factors to be taken into
consideration
• IT systems
• Cost
• Customers

6. IT
Data on:
• Inventory
• Transportation
• Distribution facilities
• Customers throughout supply chain
• Invoices and payments

7. Cost & C-service
Transport
Inventory
Stockout Communication
Materials handling Dependability
Warehousing Time
Order processing Convenience
Total logistical cost factors Customer service factors

8. How customer service standards will differ by type
of firm
Type Customer service standard
Wholesaler At least 98 percent of orders filled accurately
Manufacturer Order cycle time of no more than five days
Retailer Returns accepted within 30 days
Airline At least 90 percent of arrivals on time
Trucker A max of 5 percent loss and damage per year
Restaurant Lunch served within 5 minutes of order

10. PRINCIPLES OF SUPPLY CHAIN
MANAGEMENT
1. Communication
2. Flexibility, inventories and customer service
3. Decision-making
4. Metrics and data-collection:
• Quality
• Delivery
• Flexibility
• Cost
• After-sales support

11. COMMUNICATION
A clever retailer would share the point-of-
sale data and forecasts with suppliers
Till point link from retailer to supplier …
automatic ordering …

12. THE BASIS FOR GOOD
CUSTOMER SERVICE
Influence
Flexibility Customer service
Influence Influence
Inventory

13. DECISION-MAKING
strategic
tactical
operational

14. PRINCIPLES OF SUPPLY CHAIN
MANAGEMENT
1. Communication
2. Flexibility, inventories and customer service
3. Decision-making
4. Metrics and data-collection:
• Quality
• Delivery
• Flexibility
• Cost
• After-sales support

15. METRICS AND DATA
COLLECTION
Metric = standard of measurement
against performance … benchmark
Can only KNOW if have data …

16. Logistics costs:
• Transportation
• Operation of distribution centres
• Management of finished goods inventories
• Order processing for sales
Source: Kerin, Hartley, Berkowitz & Rudelius, 2006: Marketing, McGraw Hill

17. (1) quality
• functionality
• conformance
• reliability
• durability
• safety
• serviceability
• aestetics

18. (2) delivery
• speed
• reliability

19. (3) flexibility
• mix flexibility
• changeover flexibility
• design flexibility
• volume flexibility

20. (4) cost
Just so that ops and supply chain usually account for
most of organisations’ cost … thus target for cost
reduction …

21. (5) after-sales support
Especially if there is a high price tag to product …

22. Pitfalls of supply chain inventory management and
their symptoms

23. Pitfalls
1. No supply chain metrics
2. Inadequate definition of customer service
3. Inaccurate delivery status data
4. Inefficient information systems
5. Ignoring the impact of uncertainties
6. Simplistic inventory stocking policies
7. Discrimination against internal customers

24. Pitfalls
8. Poor coordination
9. Incomplete shipment methods analysis
10. Incorrect assessment of inventory costs
11. Organisational barriers
12. Product-process design without supply
chain considerations
13. Separation of supply chain design from
operational decisions
14. Incomplete supply chain

26. • 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

27. Improving supply chain
management
• Integration
• Coordination
General coordination
Multi-plant coordination

28. = systematic approach to
examining the development of
competitive advantage

29. Firm infrastructure
HRM
Support
activities
Technology department margin
Procurement
Inbound Operations Outbound Marketing Service
logistics logistics
And margin
Sales
Primary activities

30. Core business processes
• Product development
• Inventory management
• Order-to-payment
• Customer service