Supply Chain Management An Overview

Topics: Supply chain management, Supply chain, Logistics Pages: 39 (9853 words) Published: April 2, 2015
Chapter 1: Supply Chain Management:
An Overview
Five major forces are driving changes in logistics and
supply chain management:
globalization
technology
organizational consolidation
the empowered consumer
government policy and regulatory reform

Development of the Supply Chain Concept
 Started

in the 1960s, with the development of the
physical distribution concept for finished goods
 During the 1980s, the integrated logistics
management concept developed
 The total cost concept is important in logistics
management
 Supply chain management can be viewed as a
pipeline for the efficient and effective flow of
products/materials, services, information, and
funds

Nike Supply Chain

Physical supply
Materials management
Inbound logistics

Physical distribution
Outbound logistics

US Logistics Cost as % of GDP

US Logistics Cost Fell to 7.7.% of GDP in 2009

Major Supply Chain Issues
 Technology


 Logistics


Optimizing the Supply Chain

Management

Getting the right product, to the right customer, in
the right quantity, right condition, at the right place,
right time, and the right cost

 Supply


Application

Challenge is to select and implement technology
successfully

Chain Security

Important concern since 9/11 terrorist attack

Chapter 2: Role of Logistics in Supply Chains
Logistics Definitions


By Customer:
 Getting the right product, to the right customer, in the right quantity, right condition, at the right place, right
time, and the right cost



Council of Supply Chain Management
 The art and science of management, engineering,
and technical activities concerned with requirements,
design, and supplying and maintaining resources to
support objectives, plans, and operations

Four Subdivisions of Logistics

Business Logistics Flows
(Source Naula 2007)



Business logistics:




The design and integration of all aspects of support for the operational capability of the military forces (deployed or in garrison) and their equipment to ensure readiness, reliability, and efficiency. The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources for an event to take place and to efficiently withdraw after the event.

The acquisition, scheduling, and management of the facilities/assets, personnel, and materials to support and sustain a service operation or business.

PROOF OF DELIVERY

CUSTOMS

Physical flow
TERMINAL

PORT/AIRPORT

PORT/AIRPORT

TERMINAL

PRE-CARRIAGE

ON-CARRIAGE
WAREHOUSE

Service logistics:


HOUSE WAYBILL

CUSTOMS

Event logistics:




Information flow
HOUSE WAYBILL

SHIPPING INSTRUCTIONS COMMERCIAL INVOICE, BOOKINGS, TRACKING&TRACING, MASTER WAYBILL

Military logistics:




That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, service, and related information from point of use or consumption in order to meet customer requirements.

LOADING

WAREHOUSE

Money flow

LOADING

PRE-CARRIAGE
CUSTOMS
EXW

LETTER OF CREDIT

CUSTOMS
TERMINAL HANDLING

TERMINAL HANDLING
MAIN CARRIAGE

DDU

ON-CARRIAGE

List of Logistics Activities















Transportation
Warehousing and storage
Industrial packaging
Materials handling
Inventory control
Order fulfillment
Demand forecasting
Production planning/scheduling
Procurement
Customer service
Facility location
Return goods handling
Parts and service support
Salvage and scrap disposal

Importance of Spatial Relationships in
Logistics:

The impact of logistics upon Return on Assets
(ROA) is large


ROA is defined as follows:



ROA = (Revenue – Expenses)/Assets
ROA = Gross Profit/Assets

Good logistics practice increases Gross Profit and
reduces Assets required to sustain the business.
It leads to dramatic...
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