BUSINESS LOGISTICS MANAGEMENT

BUSINESS LOGISTICS MANAGEMENT A Supply Chain Perspective THIRD EDITION WESSELJ. PIENAAR and JOHN J.VOGT OXFORD UNIVERSITY PRESS SOUTHERN AFRICA Contents 'If Contributors vi Preface vii 1 Introduction to business logistics (W.J. Pienaar) 1 Introduction 1 Business logistics in a macroeconomic perspective 2 Evolution of the concept of logistics 5 Emergence of logistics in a business context 5 The concepts of logistics and supply chain management 8 Business logistics activities 11 Conclusion 15 2 Competitive advantage created by logistics (W.J. Pienaar) 19 Introduction 19 Logistics linkages with the value chain 19 The value-added role of logistics 22 Customer service 25 Aspects of competitive advantage 29 Wealth creation through logistics 30 Conclusion ' 31 3 Logistics and supply chain strategy planning (J. Louw) Introduction What do strategy and strategic management mean? Organisational strategy The strategy formulation process Developing a logistics and supply chain strategy Implementing a logistics and supply chain strategy Conclusion 34 34 .35 36 .37 39 .48 50 Tactical logistics management and supply chain integration (W.J. Pienaar) 56 Introduction 56 Tactical logistics activities 56 Managing the goods flow Product supply chain processes Time management in supply chains Conclusion Financial aspects of logistics and supply chain management (W.J. Pienaar) Introduction Shareholder value Cost of equity Free cash flow Economic value added Value drivers Return on investment Logistics costing and activity-based costing Marginal costing Cost-volume-profit analysis Worked examples 57 .59 .66 .73 76 .76 .76 .77 78 78 .79 .82 .84 ,86 90 94 6 Forecasting supply chain requirements (W.J. Pienaar) 104 Introduction 104 Features of forecasting 105 Types of forecasting 106 Long-term and short-term forecasting 107 The forecasting process 107 Selecting appropriate forecasting techniques 108 Validating forecasting models 111 Techniques for stationary time series data 112 Techniques for forecasting time series data with a trend 120 Forecasting seasonality 125 Example of the forecasting process 128 Conclusion 134 Appendix 138 7 Network integration (J.Louw) 144 Introduction 144 Network integration and supply chain design 145 Supply chain configuration and functional requirements 147 The stages of supply chain design and implementation 149 Factors to take into account in supply chain design 157 Modelling approaches 159 Conclusion 163 8 Production and operations management (J. van Eeden) 167 Introduction 167 Strategic and planning concepts 170 Quality management 178 Inventory management 182 Operations management: current approaches and philosophies 184 Operations management in the service sector 188 Conclusion 189 9 Procurement management IW.J. Pienaar) 193 Introduction 193 The objectives of procurement management 193 The strategic role of procurement within a business 195 Tiers of procurement management 196 The nature and classification of purchased products 197 Selecting and developing suppliers 200 Procurement-related activities that enhance supply chain success 204 Procurement cost management 205 Electronic procurement 207 Conclusion 209 10 Inventory management (J.N. Cronje) 213 Introduction 213 The purpose of inventory 214 Types of inventories 216 Important inventory concepts 218 Inventory costs 220 Inventory planning 223 Inventory control 240 Conclusion 244 11 The design of storage and handling facilities (J.Vogt) 250 Introduction Initial requirements Sizing the warehouse Operations and warehouse management systems The design process Fire Security Lighting Conclusion 250 251 252 253 253 262 263 264 264 12 Packaging and containerisation (U. Kussing and P. Kilbourn) 267 Introduction 267 Definition and functions of packaging 267 The role of packaging in logistics 269 Marketing 271 Development of packaging solutions 272 Containerisation 276 Integrating technology with packaging and containerisation 279 Packaging: a supply chain perspective 281 Conclusion 282 13 Equipment used in facilities (J. Vogt) 285 Introduction 285 Selection of equipment 285 Risks involved in purchasing equipment 286 Storage methods for small items 286 Pallets and their storage 289 Hanging rail systems 293 Moving loads 294 Moving and sorting 296 Containers 298 Conclusion 300 14 The operation of a warehouse (J.Vogt) 302 Introduction 302 Warehouse processes 302 Errors in operation 304 Stock management 304 Types of warehouses and facilities < 305 Cross-dock operations 305 Efficiency in a warehouse 308 Processes and operations 309 Delivery-transport operations 317 Bar coding, scanning and radio frequency identification technology 317 The challenge of managing continuous change 319 Lean and six sigma operations 320 Safety 321 Conclusion 321 15 The transport system (W.J. Pienaar) 323 Introduction 323 Operational characteristics of the various modes of freight transport 324 Terminals 330 Goods carried in the transport system 331 Freight transport service providers 333 The freight transport user , 335 Government as stakeholder in the transport system 336 Conclusion 337 16 Transport cost structures and pricing principles (W.J. Pienaar) 341 Introduction 341 Efficiency in transport 341 Economies of scale 341 Competition withiri'modes of transport 344 Cost structures of the different transport modes 347 Cost trade-offs in transport 352 Profit planning and control 355 Tariff quoting 356 Conclusion 358 17 Transport management (W.J. Pienaar) 362 Introduction 362 Strategic transport management 363 Tactical transport management 368 Principles of efficient operational transport management 373 Conclusion 379 18 Managing international supply chains (W.J. Pienaar and J. Vogt) 383 Introduction 383 Distribution channels 383 Transporting goods internationally 386 International trade 392 Customs departments 394 Security issues 394 Free-trade agreements and free-trade zones 396 International trade information requirements 397 International trade documentation 398 Data to be submitted for international movement 403 International commercial terms 404 Conclusion 414 Incoterms 2000: a visual guide 418 Appendix 420 19 Product returns and reverse logistics management (U. Kussing and W.J. Pienaar) 421 Introduction 421 The role of reverse logistics within the product returns management process 421 Product returns management: scope and activities 422 The impacts of reverse logistics 426 Product returns and reverse logistics processes 429 Logistics and the environment 431 Closed-loop supply chains 433 Conclusion 434 20 Controlling logistics performance (U. Kussing) 438 Introduction 438 The process of control 439 The concept of quality 442 Performance measurement 444 Benchmarking 450 The SCOR model 453 Business intelligence 455 Conclusion 456 Index 460 . Introduction to business logistics (W.J. Pienaar) 1 Introduction 1 Business logistics in a macroeconomic perspective 2 Evolution of the concept of logistics 5 Emergence of logistics in a business context. concepts of logistics and supply chain management 8 Business logistics activities 11 Conclusion 15 2 Competitive advantage created by logistics (W.J. Pienaar) 19 Introduction 19 Logistics linkages. and reverse logistics management (U. Kussing and W.J. Pienaar) 421 Introduction 421 The role of reverse logistics within the product returns management process 421 Product returns management: