Lm slide chapter 3

ĐẠI HỌC GIAO THƠNG VẬN TẢI THÀNH PHỐ HỒ CHÍ MINH CHAPTER 3: TYPICAL LOGISTICS SYSTEMS TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh LEARNING OBJECTIVES After completing this Chapter, students should be able to: ü Identify and describe the basic Logistics systems ü Explain the component activities of each Logistics flow ü Explain the key issues in each component activities that form a typical Logistics flow TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh CHAPTER OUTLINE 3.1 Introduction about Logistics systems 3.2 Components of a typical Logistics system TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh REFERENCE LIST [4]-Douglas M.lambert James R.Stock,Lisa M Ellram, Fundamentals of Logistics Management, Mc grow Hall,1998 – Chapter [15]-James C.Johnson, Donald F.Wood, Daniel L.Wardlow, Paul R.Murphy,Jr (1999), Contemporary Logistics, Prentice Hall – Chapter TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 3.1 INTRODUCTION ABOUT LOGISTICS SYSTEMS Distribution centers Raw materials, parts Customers G Pre-processing Production plant B Retailers F Finished goods warehouses H B G G Inbound logistics Outbound logistics Return logistics Logistics TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 3.1.1 Inbound Logistics activities q Sourcing q Order placement q Transportation q Receiving q Storages and preservation of materials q Materials handling q Information management TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 3.1.2 Outbound Logistics activities q Industrial packaging q Warehouse management q Inventory management q Order fulfillment q Transportation, delivery q Information management q Customer service TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh vIn the Outbound Logistics, distribution centers (DCs) play a key role: + DCs as consolidation centers Plant A A B Plant B A,B,C DCs Customers C Plant C TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh + DCs as break-bulk centers: A Plant A b a Customer X a b DCs B a Plant B Customer Y b Customer Z + DCs as product-mixing centers: Plant A A ABC B Plant B C Customer X DCs ABC Customer Y Plant C TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 3.1.3 Return Logistics activities - Return the faulty or unsold products - Return to disassemble the used products - Return and recycle the packages Finished goods distribut ion Customer Collecting Suppliers Redistribute +Burning +Recycle +Return +Refurbish +Repair Disposal Rehandling +Checking +Selecting +Sorting Direct fix +Redistribute +Reuse +Resale TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh Secondary market 10 3.2 COMPONENTS OF A TYPICAL LOGISTICS SYSTEM Material handling Inventory forecasting Inventory and Inventory control Transportation Warehouse and Warehousing Production planning Logistics system’s components Packaging Order fulfilment Customer service Procurement Facility location Production planning Other activities TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 11 3.2.1- Inventory forecasting - Inventory forecasting is the responsibility of Logistics managers - Accurate forecasting of inventory requirements and materials and components is a necessary condition for inventory control, manufacturing efficiency, and customer satisfaction - In order to improve inventory control, ABC method, MRP, … are frequently used - Inventory forecasting needs to be in line with demand forecasting from Marketing function in order to maintain a proper inventory level TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 12 3.2.2- Transportation Vendor Trans Wholesalers Trans Manufacturer Trans Wholesaler Trans Retailer/Customer - One of the key activities in the logistics system - The major focus of transportation is on the movement of raw materials, components and finished goods - Transportation contributes to Time value and Place value - Logistics manager should be responsible for selecting the transportation modes and carriers TS Lê Phúc Hòa, ThS Nguyễn Thị Bảo Khánh 13 3.2.3- Warehouse and warehousing - Warehouses act as the nodes in the Logistics and Supply Chain - Warehouses are used to store the materials, WIP and finished goods Warehouse and warehousing add costs to the products - Warehouse and warehousing also add values to the products rather than increasing cost - Warehouse and warehousing-related decisions should include: + How many warehouses? + Where to locate the warehouses? + Size of the warehouses? +… TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 14 3.2.4- Packaging - Packaging helps to protects the product during transportation and storage - Benefits of industrial packaging: + Protecting the product during transportation and storage + Increasing safety in product’s loading, unloading, handling + Changing the cargo density + Providing information about the product itself - Each selected mode of transportation shall have specific packaging requirements TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 15 3.2.5- Materials handling - This activity includes all the tasks which are related to the movement and placement of goods in a warehouse - Materials handling is important in warehouse design and efficient warehouse operations - Materials handling is also related to other areas in a typical manufacturing organization TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 16 3.2.6- Inventory control - Inventory adds Time value to the products - Fluctuated demand, limited manufacturing capabilitiesg need to keep inventory - Inventory control’s key questions: How much inventory to keep? Where to keep? - Inventory is related to warehousing and manufacturing process Cycle stock inventory Inventory classifications Assuring adequate inventory levels Safety stock inventory Pipeline stock inventory TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh Certifying inventory accuracy 17 3.2.7- Order fulfillment - This activity covers the filling and shipping customer orders - Leadtime: from the time a customer places an order until he/she receives a satisfactory fulfillment of order - Lead time (order cycle)= order transmittal time+ order processing time + order preparation time +order transport time + Order transmittal time: time to sort, arrange the orders, material procurement (direct or via email, fax, …) + Order processing time: time for stock checking, payment checking, … + Order preparation time: time for final assembling, packing, packaging, preparing for documents, etc + Order transport time: time since an order are out for shipment until it reaches the customer Short question: +Plan: Lead time (9) = Placement time(2) +processing time (2)+ preparation time(2) + transport time(3) +Actual case: Lead time (9) = Placement time (2)+ processing time (3)+ preparation time(3) + transport time(?) TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 18 3.2.8- Production planning - Production planning is mainly related to manufacturing function - Production plan also affects logistics function in terms of transportation and inventory forecast - Quantity of products, manufacturing time, multiple product lines g collaboration or control of production planning by logistics 3.2.9- Procurement - Locations of materials, components and parts purchased are related to transportation costs - The quantities purchased should also affect the total logistics cost For example: materials purchased from Chinag manufactured in the USAg manufacturing time g inventory level - The quantities purchased g mode of transportation TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 19 3.2.10- Customer service - Two dimensions of customer service are related to Logistics operations are: (1) The process of interacting directly with the customer to influence or take the order (2) The levels of service an organization offers to its customers - Customer service delivery requires coordination among inventory control, manufacturing, warehousing, and transportation when the order is taken for delivery time and product availability 3.2.11- Facility location - Facility location changes g altering the time and place relationships between facilities (eg: supply point- plant; plant – market) - These changes also affect transportation costs and service, customer service and inventory requirements 3.2.12- Other activities - Returned goods handling - Salvage and crap disposal - … TS Lê Phúc Hòa, ThS Nguyễn Thị Bảo Khánh 20 ... + transport time (3) +Actual case: Lead time (9) = Placement time (2)+ processing time (3) + preparation time (3) + transport time(?) TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 18 3. 2.8- Production... Hall,1998 – Chapter [15]-James C.Johnson, Donald F.Wood, Daniel L.Wardlow, Paul R.Murphy,Jr (1999), Contemporary Logistics, Prentice Hall – Chapter TS Lê Phúc Hòa, Ths Nguyễn Thị Bảo Khánh 3. 1 INTRODUCTION... for selecting the transportation modes and carriers TS Lê Phúc Hòa, ThS Nguyễn Thị Bảo Khánh 13 3.2 .3- Warehouse and warehousing - Warehouses act as the nodes in the Logistics and Supply Chain