Download Logistics

SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
Multichannel Marketing
Management
6218
SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
KEY CONCEPTS

Logistics – getting the right amount of
the right products to the right place at the
right time at the lowest possible cost.

Logistics Management – the practice
of organizing the cost-effective flow of
raw materials, in-process inventory,
finished goods from the point of origin
to the point of consumption to satisfy
customers requirements.
SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
KEY CONCEPTS

Supply Chain – consists of a sequence of
firms that perform activities required to
create and deliver a good or service to
consumers or industrial users

Supply Chain Management – is the
integration and organization of information
and logistic activities across firms in a
supply chain for the purpose of creating and
delivering goods and services that provide
value to customers
Relating logistics management and supply
chain management to supplier networks and
marketing channels
The automotive supply chain includes
thousands of firms that provide the 5,000 or
so parts in a typical car
Paint industry supply chain
SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
SUPPLY CHAIN MANAGEMENT AND
MARKETING STRATEGY

Aligning a Supply Chain
with Marketing Strategy
• Dell: A Responsive Supply Chain
• Wal-Mart: An Efficient Supply Chain
INFORMATION AND
LOGISTICS MANAGEMENT IN A
CUSTOMER-DRIVEN SUPPLY CHAIN

Information’s Role in Supply Chain
Responsiveness and Efficiency
• Electronic Data
Interchanges (EDIs)
• Extranet
INFORMATION AND
LOGISTICS MANAGEMENT IN A
CUSTOMER-DRIVEN SUPPLY CHAIN

Total Logistics Cost consists of expenses
associate with transportation, materials handling
and warehousing, inventory stockouts (being
out of inventory), order processing and return
goods handling

Customer Service is the ability of logistics
management to satisfy users in terms of time,
dependability, communication and
convenience.
How total logistics cost varies with the
number of warehouses used based on
inventory costs and transportation costs
Supply chain managers balance total
logistics cost factors against customer
service factors
INFORMATION AND LOGISTICS MANAGEMENT
IN A CUSTOMER-DRIVEN SUPPLY CHAIN
CUSTOMER SERVICE FACTORS

Time
• Lead Time
 Order Cycle Time
 Replenishment Time
• Quick Response
• Efficient Consumer Response
INFORMATION AND LOGISTICS MANAGEMENT
IN A CUSTOMER-DRIVEN SUPPLY CHAIN
CUSTOMER SERVICE STANDARDS
USING MARKETING DASHBOARDS
Diagnosing Out-of-Stocks and On-Time Delivery
for Organic Produce
Out-of-Stock (%) and On-Time-Delivery (%)
Out-of-Stock (%) =
# of Outlets Where a Brand/Product is Listed but Unavailable
Total # of Outlets Where a Brand/Product is Listed
On-Time Delivery (%) =
# of Deliveries Achieved in the Timeframe Promised
Total # of Deliveries Initiated in a Time Period
UPS and Ryder
What are third-party logistics providers?
Advantages and disadvantages of five
modes of transportation
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
TRANSPORTATION

Railroads
• Intermodal Transportation
• Piggy-Back or Trailer
on Flatcar (TOFC)
• Containers
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
TRANSPORTATION

Motor Carriers

Air Carriers and
Express Companies

Freight Forwarders/
Express Companies
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
TRANSPORTATION

Pipelines

Water
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
WAREHOUSING AND MATERIALS HANDLING

Storage Warehouses

Distribution Centers

Materials Handling
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
INVENTORY MANAGEMENT

Inventory Costs
• Capital Costs
The opportunity costs resulting from
tying up funds in inventory instead of
using them in other, more profitable
investments.
• Storage Costs
Warehousing space and materials
handling costs.
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
INVENTORY MANAGEMENT

Inventory Costs
• Risk Costs
Possible loss, damage, pilferage,
perishability and obsolescence
costs.
• Inventory Service Costs
Items such as insurance and taxes
that are present in many states.
KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
INVENTORY MANAGEMENT

Supply Chain Inventory Strategies
• Just-in-Time (JIT) Concept
An inventory system that operates
with very low inventories and
requires fast, on-time deliveries.
• Vendor-Managed Inventory (VMI)
Suppliers determine the product amount
and assortment a customer (like a
retailer) needs and automatically delivers
the appropriate items.
CLOSING THE LOOP:
REVERSE LOGISTICS

Reverse Logistics
The process of reclaiming
recyclable and reusable
materials, returns and reworks
from the point of consumption or
use fro repair, remanufacturing,
redistribution or disposal.
Results leads to reduced waste in landfills.
Subaru’s Plant in Indiana – the first “zero landfill”
auto assembly plan in the U.S.