After studying this chapter you will be able to understand: Reality of SC scope, the multi-dimensions of SC, study framework, the logistics strategy triangle, relationship of logistics to marketing and production, relationship of logistics to marketing, relationship of logistics to production,...
Logistics Management LSM 730 Lecture 06 Dr Khurrum S Mughal 1-1 Reality of SC Scope 1-2 The Multi-Dimensions of SC on ati Int e rfu nc tio na l co ord ina tio n in ord co al on ati niz rga ero Int SUPPLY CHAIN MANAGEMENT Activity and process administration 1-3 Location Strategy • Location decisions • The network planning process It involves the decision triangle -The focus is here 1-4 CONTROLLING Customer service goals • The product • Logistics service • Ord proc & info sys Transport Strategy • Transport fundamentals • Transport decisions PLANNING Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions ORGANIZING Study Framework The Logistics Strategy Triangle Inventory Strategy Forecasting Transport Strategy Storage fundamentals Transport fundamentals Inventory decisions Transport decisions Purchasing and supply scheduling decisions Customer Storage decisions service goals • The product • Logistics service • Information sys Location Strategy Location decisions The network planning process 1-5 Relationship of Logistics to Marketing and Production PRODUCTION/ OPERATIONS Sample activities: • Quality control • Detailed production scheduling • Equipment maint • Capacity planning • Work measurement & standards Interface activities: • Product scheduling • Plant location • Purchasing LOGISTICS Sample activities: •Transport • Inventory • Order processing • Materials handling Interface activities: • Customer service standards • Pricing • Packaging • Retail location Productionlogistics interface MARKETING Sample activities: • Promotion • Market research • Product mix • Sales force management Marketinglogistics interface Internal Supply Chain 1-21 Marketing Relationship of Logistics to Marketing Product Promotion Price Logistics Place-Customer service levels Lot quantity costs Transport costs Inventory carrying costs Order processing and information costs Warehousing costs 1-22 Relationship of Logistics to Production • Coordinates through scheduling and strategy— • • make-to-order or make-to-stock An integral part of the the supply chain − Affects total response time for customers − Shares activities such as inventory planning Costs are in tradeoff − Production lot quantities affect inventory levels and transportation efficiency − Production response affects transportation costs and customer service − Production and warehouse location are interrelated 1-8 Logistics/SC in Diverse Areas • • • • • Manufacturing—most common Environment—causing restrictions Service—emerging opportunities Non-profits—little explored Military—long history 1-9 ... information costs Warehousing costs 1-2 2 Relationship of Logistics to Production • Coordinates through scheduling and strategy— • • make-to-order or make-to-stock An integral part of the the supply... interrelated 1-8 Logistics/ SC in Diverse Areas • • • • • Manufacturing—most common Environment—causing restrictions Service—emerging opportunities Non-profits—little explored Military—long history 1-9 ... decisions service goals • The product • Logistics service • Information sys Location Strategy Location decisions The network planning process 1-5 Relationship of Logistics to Marketing and Production