LOGISTICS MANAGEMENT
Lecture 1

TOPICS HOURLY
• Risk Management, calculation, Zoning and treatments
• Vertical + horizontal and Virtual integration
• Case study Sony Ericsion
• Transportation n Mode of transportation
• SCM
 Importance of SCM n Logistics
 Difference between LM and SCM
 TQM
 SIX SIGMA
 LEAN
 MUDA<MURI MURA
 Kaizen
 JIDOKA
 VMI
 JIT
 HEJUNIKA
 5S Technique
 G - GETBSU (See Yourself)

Delivering a Burger to You
● When you buy a burger from McDonald or a Zinger from KFC,
have you thought where all of the ingredients came from that
produced your burger?
● Depending on the restaurant’s location, McDonald’s and KFC
source their ingredients from both local and global suppliers.
● The challenge is to ensure that all restaurants in their network
have enough ingredients to meet customer demand.
● This requires planning, implementing, and controlling the
efficient, effective flow and storage of goods and services to
deliver the burger to you

Fighting a War is not easy
planning and carrying out the movement and
maintenance of forces....
those aspects of military operations that deal with the
design and development, acquisition, storage,
movement, distribution, maintenance, evacuation and
disposition of material; movement, evacuation, and
hospitalization of personnel; acquisition of
construction, maintenance, operation and disposition
of facilities
a gigantic task indeed.

Logistics
● The word logistics was first associated with the
military in 1905 as a branch of war that pertains to the
movement and the supply for armies.
● Now, Logistics is not only used in military but also by
managers in almost all spheres of activity to fine tune
the process of delivery through various supply lines
with the primary objective of being able to deliver not
just 'in time‘ but also at 'the desired place'.

Definition of Logistics
● Logistics - ...the process of planning, implementing,
and controlling the efficient, effective flow and storage
of goods, services, and related information from point
of origin to point of consumption for the purpose of
conforming to customer requirements."
– (Reference: Council of Logistics Management)
(Note that this definition includes inbound, outbound,
internal, and external movements, and return of
materials)

THE PURPOSE OF A
LOGISTICS SYSTEM
● RIGHT QUANTITIES of the
● RIGHT GOODS to the
● RIGHT PLACES at the
● RIGHT TIME in the
● RIGHT CONDITION at the
● RIGHT COST.
Creating a logistics strategy Creating a logistics
strategy is a balancing act which takes many variables
into account.

Supply Chain Management
● The network of organizations that fulfill
customer needs
– Can either be product or service oriented
● Product: cars, computers, etc.
● Service: MBA students, Hospitals
● By definition, incorporates multiple firms or
organizations not under central control

Some More Definitions
● Supply Chain Management is primarily concerned with the
efficient integration of suppliers, factories, warehouses and stores
so that merchandise is produced and distributed in the right
quantities, to the right locations and at the right time, and so as to
minimize total system cost subject to satisfying service
requirements.
Simchi-Levi
● Call it distribution or logistics or supply chain management. By
whatever name, it is the graceful, gritty, and bulky process by
which companies move, materials, parts, and products to
customers. Fortune (1994)

Philosophy of SCM
● The entire supply chain is a single, integrated
entity.
● The cost, quality and delivery requirements
of the customer are objectives shared by
every company in the chain.
● Inventory is the last resort for resolving
supply and demand imbalances.

Simplistic Supply Chain
● Customer
● Retailer
● Distributor
● Manufacturer
● Supplier

More Realistic Supply Chain

Why is SCM Important?
● Strategic Advantage – It Can Drive Strategy
* Manufacturing is becoming more efficient
* SCM offers opportunity for differentiation (Dell) or
cost reduction (Wal-Mart or Big Bazaar)
● Globalization – It Covers The World
* Requires greater coordination of production and
distribution
* Increased risk of supply chain interruption
* Increases need for robust and flexible supply
chains

Why is SCM Important?
(continued)
● At the company level, supply chain management
impacts
* COST
– For many products, 20% to 40% of total product
costs are controllable logistics costs.
* SERVICE
– For many products, performance factors such as
inventory availability and speed of delivery are critical
to customer satisfaction.

LOGISTICS MANAGEMENT
Lecture 2

Traditional View of Suppliers &
SCM

More Advanced View of SCM

Shift in focus in supply chains
Kopczak & Johnson, 2003

Shift in focus in supply chains
Kopczak & Johnson, 2003

Shift in focus in supply chains
Kopczak & Johnson, 2003

Process view of a supply
chain
● Cycle view
● Push/pull view

Cycle View of Supply Chains

Push/Pull View of
Supply Chains
● Pull processes: execution is initiated in
response to a customer order
● Push processes: execution is initiated in
anticipation of customer orders

Push/Pull View of Supply
Chains

04 difference b/w goods & services:
•1) Tangibility
•2) Inseparability
•3) Perishability
•4) Variability

Competitive Advantage & 3Cs
• Uniqueness of Product or Service offered
• Leverage over Competitors

Competitive Advantage Commercial
Success

Productivity & Value Advantage Matrix

SCM and Marketing
● Due to increased competition and product
improvements power of brand value is declining.
● Technological difference between company product is
also declining
● Availability at the point of sales is important to retain
even an old satisfied customer, otherwise the sale will
be lost to competitor
● Customer service is a major ‘value advantage’.

Barriers to SC Integration
● Organization Structure
● Measurement Systems
● Inventory Ownership
● Information Technology
● Knowledge Transfer Capability

Logistics/SC Competency
● Network Design
● Information
● Transportation
● Inventory
● Warehousing, material handling and
Packaging

Thank you