Professional Documents
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MANAGEMENT
Lecture outline
1.Definition and main activities of business
logistics
2. Trade-offs analyses
3. Idea of supply chains
4. Supply Chain Management matrix
5. Supply chain performance and efficiency
improvement (SCOR and GSCF models)
6. Japanese and European supply chain
networks
7. Simple EOQ formula
8. Center of Gravity Technique
Logistics (according to CLM) 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 point of origin to
point of consumption for the purpose of
conforming to customer requirements
Revenue
Logistics costs
KEIRETSU
Kaizen
The traditional role and place of small firms within integrated
supply chains was mostly limited):
- delivering raw- materials, parts or modules for the final
goods producers,
- delivering customer goods to wholesalers or selling small
quantities of this goods to the final customers,
- providing transportation and forwarding services,
- manufacturing goods and providing other services for
market niches which are considered as not enough profitable
for big companies (also as a subcontractor),
- trading under well known brand name of large distribution
networks (franchising)
Table:
The directions of SME’s changes as a links in supply chains and networks
Scope of changes in SME’s Hierarchical supply chains Polycentric supply network
2xDx s
Q= √ ---------
Pxi
Facility location factors:
A.Weber, Polander, Thunen classical theories
• Labour cost, land cost, transportation cost
• Aviability and cost of materials, energy, water
• Socio- economic factors (taxes, political
stability, import and export restrictions,
enviromental regulations, quality of life, etc.)
Analytical techniques for facility
location decisions:
• Heuristic approach (e.g. factor rating by
weights reflecting the importance of each
factor)
• Simulation models
• Cost- benefit analisis
• Center of gravity technique
Center of gravity (to find single
location that minimizes of
transportation cost)
Technika „Centrum Grawitacji”
X S3(x3’; y3’)
S1(x1’; y1’)
Z2(x2 ; y2)
c (x,y)
Z1(x1 ; y1)
S2(x2’; y2’)
0 Y
How to calculate the coordinates for
CX and CYthe new facility
location?(Ballu, p.487)
• Parameters:
• Vi – volume at point i
• Ri – transportation rate to or from point i
• Xi and Yi – coordinates of existing locations
∑ Vi Ri Xi ∑ Vi Ri Yi
CX = -------------------- CY= -------------
∑ Vi Ri ∑Vi Ri
Assumptions (disadvantages) of center
of gravity technique
• Transportation rate is a linear function of
transported volume (units, tons, etc.) and the
traveling distance,
• It doese’t consider real traveling distance
which is depended on the roads availability
References:
• [1] Ballu R.H.: Business logistics management, Prentice Hall International,
New Jersey 1999
• [2] Christopher M.: Logistics and Supply Chain Management. Creating
Value – Adding Networks, Prentice Hall 2005
• [3] Gattorna J.: Living Supply Chains. How to Mobilize the Enterprise
Around Delivering What Your Customers Want, Prentice Hall, 2006
• [4] SCOR model http://supply-chain.org/
• [5] CSCMP Supply Chain Management Definitions , www.cscmp.org
• [6] Cooper R., Slagmulder R.: Supply Chain Development for the Lean
Enterprise – Inter- organizational Cost Management, Productivity Press
Portland 1999
• [7] Witkowski J.: Zarządzanie łańcuchem dostaw. Koncepcje, procedury,
doświadczenia, PWE, Warszawa 2010