Professional Documents
Culture Documents
The supply chain is simply another way of saying the whole process of business.
Chapter 1
CR (2004) Prentice Hall, Inc.
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Transportation
Warehousing
Transportation
Customers
Information flows
Factory
Transportation
Vendors/plants/ports Warehousing
CR (2004) Prentice Hall, Inc.
Transportation
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Logistics Defined
Logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements. Council of Logistics Management
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The contemporary view: Distribution is a new frontier for demand generationa competitive weapon.
Both views are now important!
CR (2004) Prentice Hall, Inc.
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Transportation
Warehousing Order entry
3.34%
2.02 0.43
$26.52
18.06 4.58
Administration
Inventory carrying Total
0.41
1.72 7.65%
2.79
22.25 $67.71
Logistics cost are about 10% of sales w/o purchasing costs
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Order Cycle Time, Days Product Availability--% orders Product Availability--% line items
Days
7 6 5 4
19 9 19 2 9 19 4 96 19 9 20 8 00 20 02
Year
90
Significance of Logistics
Costs are high
About 10.5% of GDP domestically About 12% of GDP internationally A range of 4 to 30% of sales for individual firms, avg. about 10% A high as 70-80% of sales if purchasing and production are included
Desire for quick response Desire for mass customization Generate revenue Improve profit
Local vs. long distance supply Law of comparative economic advantage applies Time and place utilities
Logistics is a key to trade and an increased standard of living Logistics adds value
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Profit G&A
Marketing Logistics Overhead Materials
Profit G&A
Marketing Logistics Tariffs Overhead Materials
Increase
Increase
Labor
CR (2004) Prentice Hall, Inc.
Reduction
Labor
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Physical distribution
Customers
Transportation Inventory maintenance Order processing Acquisition Protective packaging Warehousing Materials handling Information maintenance
Transportation Inventory maintenance Order processing Product scheduling Protective packaging Warehousing Materials handling Information maintenance
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Key Activities/Processes
Primary - Setting customer service goals - Transportation - Inventory management - Location Secondary, or supporting - Warehousing - Materials handling - Acquisition (purchasing) - Protective packaging - Product scheduling - Order processing
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Acquire
Convert
Product and information flow
Distribute
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Reality of SC Scope
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The Multi-Dimensions of SC
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Study Framework
CONTROLLING
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PLANNING
Customer service goals The product Logistics service Ord. proc. & info. sys.
ORGANIZING
Inventory Strategy Forecasting Inventory decisions Purchasing and supply scheduling decisions Storage fundamentals Storage decisions
Productionlogistics interface
Marketinglogistics interface
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