Samenvatting Global Logistics and Supply Chain Management

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Samenvatting Global Logistics and Supply Chain

Management
Logistics and Information Management (Hogeschool van Utrecht)
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Chapter 1 week 1
History of Logistics and SCM(supply chain management) in companies

 60’s: what was produced was sold, no focus on logistics, the golden age of Marketing
 70’s: increasing competition, inventory and production management needed to be
able to deliver the right qty at the lowest cost.
 80’s: continuous improvement techniques: TOYOTA and LEAN
 90’s: Supply Chain Management
 00’s: Reverse logistics and E-business
lean: cutting out extra activities
The evolution of logistics and supply chain management

 Six key developments in logistics and SCM: (supply chain revolution)
 Falling product prices (dvd players)
 Reduced transport intensity of freight (add value to the product, instead of
alive chickens now ready to cook chickens)
 Deregulation of transport (companies are being deregulated by governments,
which means removing unnecessary barriers to competition)
 Productivity improvements (containerisation)
 Emphasis on inventory reduction (inventory management)
 Changes in company structure (outsourcing. Less vertically more specialised)
-Material substitution: replacement of physical product by virtual product

-Cargo= freight+mail
-consignment= a shipment of goods consigned
What is logistics?
Logistics: the detailed coordination of a complex operation involving many people, facilities,
or supplies.
 Logistics involves getting: (these 8 rights)
 the right product,
 in the right way,
 in the right quantity and right quality,
 in the right place at the right time,
 for the right customer at the right cost
 Its not just ‘trucks and sheds’ (warehouses)
 But also procurement, production, recycling =
 Marketing is about selling, Logistics is about making this happen!
The evolution of the integrated supply chain

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3 key flows of csm :

-materials
-information
-recourses ( finance, people, equipment )
Furthermore, not all resources in the supply chain are tangible, for example good quality
inter-company relationships are often cited as a highly important ingredient of effective
supply chains
What is supply chain management?

 The supply chain is the network of organisations that are involved, through
upstream(supplier end of the supply chain) and downstream (customer end of the
supply chain) linkages, in the different processes and activities that produce value in
the form of products and services in the hands of the ultimate consumer
 Supply chain management!(SCM) is the management across and within a network of
upstream and downstream organisations of both relationships and flows of material,
information and resources (your own performance is depended on the performance
of others)
 The purposes of SCM are to create value, enhance efficiency, and satisfy
customers
You can also call it (the end-to-end supply chain (csm)):
-farm to fork
-cradle to grave
-dust to rust
Can you link it to a river?

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Downstream: is to the customers

Upstream: is too supplier
Distinguishing logistics and SCM
traditionalist view: scm as an add-on to logistics

re-labelling view: logistics has been re-labelled
unionist view: logistics is part of scm (from the book)
intersections view: overlap between the 2 parts but still separate
Applications to manufacturing and services

 Logistics and SCM can be used to generate both cost savings and service
enhancements
 e.g. after sales service and delivery add-ons
 Robust logistics strategies enable the entire supply chain to compete
 e.g. Ikea
‘flat packed’ products, simplified & standardized processes
chapter2
 Highlight the growth that has occurred in recent decades in international trade.
Regional and country differences and relative shares will also be illustrated
 Explain what is meant by globalisation, identify the most globalised countries in the
world and explain the drivers for globalisation
 Consider the (unequal) distribution of economic wealth among the world’s countries
 Explore the role of multinational companies and their role in global trade, together
with the impact of overseas investment by companies

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 Finally, look at what happens when unequal volumes or types of freight flow in
opposite directions in freight markets
Growth in international trade

 There has been considerable growth in recent decades in world trade; world exports
grew from $62 billion in 1950 to a peak of $16,000 billion by 2008 before
subsequently declining
 Facilitated (more open trading) by regional trade agreements (examples; EU, ASEAN
(association of south east Asia nations)
 Hence more freight is moving all around the world
 Logistics systems are thus having to play an increasingly important role in the
global economy
GNI; gross national income

Transport mobility: a measure which comprises an assessment of the available services,
quality of the transport infrastructure, ease with which people and freight can move into,
around and out of a country.
Total World Merchandise Exports 1950-2009
Measuring Logistics Performance

 The world bank developed the global logistics performance index (LPI) to measure
logistics performance by country. It ranks 155 countries’ logistics performance
against six key dimensions:
 Customs
 Infrastructure
 International shipments
 Logistics competence
 Tracking & tracing
 Timeliness
http://lpi.worldbank.org/
aim is to benchmark countries’ performance an asses the quality of a country’s connections
to the global market.

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another measure that looks at the logistic performance is; UNCTAD Liner Shipping
Connectivity Index (LSCI) which measures 162 coastal countries.(container shipping)
 Generated from five components:
 Maximum vessel size in a country’s ports
 The number of companies providing services to a country’s ports
 The number of services offered by the liner companies
 The number of ships deployed on services to a country’s ports
 TEU capacity on the deployed ships
Top 10 countries in the global LPI
LPI is more for general these are more sea sector
Globalisation
 Companies must learn to operate as if the world were one large market (Levitt, 1983)
 Multinational companies (MNCs) (companies who establish a presence in an
overseas market)
 Transnational corporations (TNCs) (companies that trade across many
borders, with operations in multiple countries. Often difficult to identify the
‘home’ country)
These three other terms relate to how companies think and behave as they
internationalise:
 Polycentricity: a company adopts the host country perspective
 Geocentricity: a company acts completely independent of geography and adopts a
global perspective, and will tailor to the local environment as appropriate (i.e.
‘glocalisation’)
 Ethnocentricity: a company when doing business abroad thinks and acts as if they
were still operating in their home country

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Foreign direct investment (FDI)(are financial flows from a company in one country to invest
in another country) : factors that have to be considered when deciding on an optimum
location for an overseas facility:
Foreign direct investment

 Financial flows from a company in one country to invest (for example in a factory) in
another country:
 Global capital flows are Very significant in the overall global economy
 Can be key to dictating a countries success
 Strong competition to attract external FDI
 Some countries put in place certain conditions to attract more FDI
E.g. low rates of corporate taxation
Directional Imbalances (also called freight markets)

 When there are mismatches in the volumes or types of freight moving in opposite
directions in a freight market
Offshoring: ….
Freight makes one-way, and no return journeys (it is for consummation or there will be value
added)
Major Trade Corridors

Traditional versus circular routeings

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Traditional versus circular routeings
opposite directions on the same route (for example flowers and foodstuff, need a fride.
Cheaper to have stuff in there on the way back as well). Perishable product not special
refrigerated containers would have to be imported.
Chapter 3
Growth in international trade
Globalization of the manufacturing sector has resulted in the following trends :
 Global competition
 Competitors, partners and customers from around the world
 Global sourcing
 Global presence
 Global value chains resulting in increasing complexity and competition
 Global access to knowledge and new technologies
 High level of customer awareness and expectation
 Rapid pace of technological change
 Fast rate of product commoditization
 SCM expertise and innovation are preconditions for business success

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Outsourcing
Why outsource: flexible, technology, core competences, cost.
 Outsourcing: The transfer of to a third party of the management & delivery of a
process previously performed by the company itself
 Requiring:
 In order to effectively manage the outsource arrangement, companies
generally put in place a Service Level Agreements (SLAs) and performance
metrics. An agreement to know upfront the performance level expected.
Minimum requirements that the new supplier need to held on are called :
order qualifiers. And criteria that allows the supplier to actually be selected
are Order winners.
Supplier development: where both parties interest, improvements efforts are made leading
to, for example, new and better products and solutions being provided by suppliers.
Virtual organizations: online organizations that outsource almost everything.
When thinking of a pyramid, the top tier is the manufacturer or client after that comes the
second, third etc. suppliers. The first tier is also called original equipment manufacturer
(OEM). These are producers of the final product that carries their brand. Sometimes they
make just little (or virtual) changes to the product. Contract manufacturer are also the lower
tiers that do all the work.
Reasons for manufacturing outsourcing

 Reduce direct and indirect costs
 Reduce capital costs
 Reduce taxes
 Reduce logistics costs
 Overcome tariff barriers
 Provide better customer service
 Spread foreign exchange risks
 Share risk
 Build alternative supply sources
 Pre-empt (be ahead of competitors) potential competitors
 Learn from local suppliers, foreign customers or competitors
 Gain access to world class capabilities or attract talent globally
Offshoring
=The transfer of specific processes to lower cost locations in other countries
 Outsourcing involves handing process ownership over to a third party
 In offshoring, the company may still own and control the process itself
in the lower cost location
Nearshoring: moving offshoring closer to home, to have less risk and transaction cost.
backshoring: when abandon affshoring and move the activities back to the original home
market.
Reasons for offshoring

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failures in outsourcing
Most frequently reported problems leading to failure in outsourcing
-Late delivery (most common)

-Consistency of quality
Criteria for evaluating and selecting outsourcees

 Order qualifiers
 Reliability of delivery on time (otherwise pay per hour)
 Quality certifications (otherwise remake)
 Conformance to agreed specifications
 Delivery lead time
 Financial capability
 Performance track record
 Price or cost reduction
 Senior management attitude
 Responsiveness to demand uncertainty (not being fexible to make changes)
 Record of corporate social responsibility
corporate social responsibility (CSR): covers a multitude of activities and issues, and in
essence concerns how ethical a company’s activities are.
order-losing sensitive qualifiers: some order qualifiers will be more critical than others in

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terms of the outsourcers requirements.
A framework for evaluating potential outsourcees
cost to benefit trade off: there are a lot of hidden cost for example you have to monitor the
hole time. Or pay more for transport cost.
Outsourcer and outsourcee relationship development

 Outsourcer-outsourcee relationship can more across 4 stages:
 Master – Servant Stage: in this conventional relationship the outsourcer sets
the expectations and the rules and the outcourcee delivers as expected from
them. Low cost is the main driver of the outsourcing arrangement.
 Consultative Stage: this stage is a type of ‘consultant-client’ relationship. The
outsourcer consults with the outcourcee on a regular basis. In addition to the
cost, other factors such as quality, reliability and responsiveness are also
important for sustaining the outsourcing arrangement.
 Peer to Peer Relationship Stage: this is considered to be the ideal stage
where the outsourcer and the outsoucee share a peer-to-peer relationship.
This stage of collaboration results in a more synergistic long-term relationship
creating ‘win-win’ situations for both the parties.
 Competitive Stage: in this stage the original outsourcee company takes the
lead role and starts to compete with the outsourcing company in global
markets.
Supply chain integration

 Integration embodies various communication channels and linkages within a supply
network
 Integration should not be confused with collaboration.
 Integration is the alignment and interlinking of business processes

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 Collaboration is a relationship between supply chain partners developed over a

period of time
 Integration is possible without collaboration
 Integration is an enabler of collaboration
Example: order processing via electronic data interchange (EDI) or Scala system in the cate
gourmet case are integrated transactions, but do not require the customer and supplier to
operate collaboratively. Conversely, integration is an enabler of collaboration.
EDI: the edi process looks like this- no paper, no people
Supply chain integration
there are 4 primary modes of

integration within the supply chain:
-internal integration: cross-functional

integration within a selected
organisation.
-backward integration: integration
with selected first-ties and
increasingly second-tier suppliers.
-forward integration: integration
with selected first-tier customers or
service providers. Forward
integration with second-tier
customers is uncommon
-forward and backward integration:

integration with suppliers and
customers. This ‘total’ integration is
rare but theoretically ideal.
the latter 3 modes listed above can be classified as external integration (extending beyond
the confines of a single organisation) opposed to internal integration, which limits
integration to within a organisation.
Internal integration
 To integrate communications and information systems so as to optimise their
effectiveness and efficiency

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 Can be achieved by structuring the organisation and the design and / or

implementation of information systems for improved communication and
information sharing
 Non-value adding activity is minimised (duplication of effort)
 Costs are reduced (reducing error rectification)
 Leadtimes are reduced (order processing)
 Service quality is improved (improved order tracking)
 Functional silos are reduced
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External integration
 EDI is a key enabler of supply chain integration
 It streamlines information sharing and processing
 Effective and efficient organisational design is a prerequisite
The Japanese automotive OEMs typically adopt a Keiretsu supply chain structure:
 Original equipment manufacturers work closely with their first tier suppliers
to integrate manufacturing, logistics and information processes; which is
passed upstream
 This enables just-in-time line-side delivery at their assembly plants
 A seamless lean supply chain is created
 The supply chain is viewed as one extended operation
Supply chain collaboration principles

 Collaboration is dependant on the provision of mutual benefit
 In supply chains, mutual benefit between suppliers is difficult to achieve
 Hence trust becomes an issue
The dynamics of trust and collaboration can be explained via The prisoner’s dilemma, an
example of the Nash equilibrium game theory:
You and a partner are suspected of committing a crime and arrested. The police interview
each of you separately. The police detective offers you a deal: your sentence will be reduced
if you confess! Here are your options:
 If you confess but your partner doesn’t: your partner gets the full 10-year sentence
for committing the crime, whilst you get a 2-year sentence for collaborating.
 If you don’t confess but you partner does: the tables are turned! You get the full 10-
year sentence, whilst your partner gets the 2-year sentence.
 If both of you confess: you each get a reduced sentence of 5 years.
 If neither of you confess: you are both free people.
The dilemma you face is ‘do you trust your partner to make the same decision as you?’
The prisoner’s dilemma

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The journey from open market negotiations to collaboration (most open from)
Collaboration has 2 dimensions:

-Vertical: more common and easier to implement
-horizontal:
when achieving both you will gain significant business benefit. It can achieve reduced
inventory-carrying costs, reduce unproductive network, reduce empty running times and
improve lead-time performance by adopting collaborative methods such as joint planning
and technology sharing.
The two dimensions of collaboration applied to transport management

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Humanitarian logistics: competition between supply chain, during humanitarian disaster.

Example: 2 non-government organizations attempting to deliver the same aid to a location
could overstock one area and understock another.
Supply chain collaboration methods

 Suppliers competing for the same orders creates supply chain inefficiencies
 This will inevitably drive down their prices, promise unrealistic leadtimes and
lose their focus on product and service quality
 Supply base rationalisation: periodically a key focus of such organisations
 Example: in 2009 Sony aimed to cut its supply base from 2,500 to 1,200
suppliers by March 2011 to reduce complexity and costs
 A response to market pressures
 It is easier for an OEM to work with a few selected suppliers, than to work
with many suppliers.
 Suppliers who are not directly competing against each other for individual
orders are more likely to collaborate (horizontal collaboratoion)
Supply chain collaboration methods
• Supplier development can enable improved integration and also collaboration (e.g.
Keiretsu)
– Shift suppliers’ mindsets from thinking competitively to collaboratively
– Enables integrated order processing application for aggregated procurement
• Aggregated procurement:
– Rather than individual suppliers tendering for particular orders, specific
suppliers are selected by a supplier selection software package based on their
capabilities
– Each supplier gains a share of the total orders based on their ability to deliver
the order on time and to specification
Consequently, the overall supply base incrementally improves, reducing the likelihood of
future rationalization

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Chapter 4
About the link between strategy and both logistics and SCM.
Strategy
Top-down Perspective on Strategy
-corporate strategy: example: what are the overall financial and growth
targets. (decide on technologies en markets they want to focus on.
-business unit strategy: these focus on specific products and markets.
Example: separate warehousing, transport and other business units.
And may develop different strategies for every separate unit
-functional strategy: refers to development of strategies for specific
areas of activity within a business unit. Example: marketing, IT, logistics.
‘Top down’ : ALDIà overall strategy can be classified as cost leadership

So the functional strategy (logistics strategy) is influenced by corporate strategy
in terms of the type of products purchased, and how the logistics strategy is
being formed.
‘bottom up’ perspective of strategy allows us to see how logistics

can contribute to the wider business unit and firm strategies.
many firms are organised into functional silos. Example: marketing and production and often
the various functions do not integrate sufficiently with each other.
A Holistic View of Logistics and SCM Strategy Formulation

The Evolution of Manufacturing
-Production Strategies

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The evolution of manufacturing
craft production: customised for individual customers

mass production: economies of scale
Lean Production
 Eliminating waste in a pull based value stream of
activities with level production (i.e. even production
runs with neither idle time nor surges in
demand) and just-in-time inventory
management
Toyota production system (TPS) :it sought to eliminate waste in 7 key areas :
The Seven Wastes (Muda)
1. Transportation (moving items from one storage location to another)
2. Inventory (items/paperwork/information waiting to be processed)
3. Motion (excess movement and/or poor ergonomics)
4. Waiting (delays caused by shortages, approvals, downtime)
5. Over-processing (adding more value than the customer is paying for)
6. Overproduction (make-to-stock (MTS) overstocked products that is being held
in a warehouse. Make-to-order (MTO) is the efficient way.
7. Defects (rework & scrap – doing the same job more than once)
8. Note: This is a terrific list and is commonly accepted as all-inclusive. Of course being
“Improvers” we add “Innovation” as #8 which includes failing to tap into the human
potential and creativity of your workforce. We contend that this is perhaps among
the greatest failures and “wastes” in manufacturing today.
push mentality: materials are produces according to a planned forecast and moved to the
next stage of the supply chain. (MTS systems)
pull: is only produced and moved when it is required, and thus is more closely aligned with
actual demand. ( MTO systems)
The Principles of Lean Consumption

 Solve the customer’s problem completely
 Don’t waste the customer’s time
 Provide exactly what the customer wants
 Provide what’s wanted exactly where its wanted
 Provide what’s wanted where its wanted exactly when its wanted
 Continually aggregate solutions to reduce the customers time and hassle (after
Womack & Jones, 1991)
Agile supply chains and mass customization

Agile Supply Chains
 The agile supply chain is a demand-pull chain designed to cope with volatile demand.
All movement upstream in the supply chain.
 Structured so as to allow maximum flexibility
 Mogelijk gemaakt door mass customization

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 Often incorporates postponed production
Mass Customization
 Different product configurations contain a majority of shared components and
features to accommodate volume and variety
 Enabled by postponement (value adding activities are at the end of the supply chain)
 the reconfiguration of product and process design so as to allow
postponement of final product customisation as far downstream as possible
 Not only applied to manufacturing
 E.g. Packaging postponement is merely delaying final packaging of products
until customer orders are received
Principles of Postponement
Left: inefficient
right: efficient
Combined Logistics Strategies
-lean, continuous replenishment: demand is predictable

and replenishment lead times are relatively short.
electronic point of scale (EPOS): retailers supplying
information.
-agile, quick response; replenishment lead times
still short but demand unpredictable. (ZARA)
-lean, planning and execution: demand predictable
and replenishment lead time are long. (Christmas trees)
-leagile: replenishment lead times are long,
and demand unpredictable. This scenario they
combine lean and agile which is called: leagile
supply chain (hybrid) (downstream)

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A Taxonomy for Selecting Global Supply Chain Strategies

Supply demand characteristics Resulting pipelines
Short lead time + predictable demand Lean, continuous replenishment
Short lead time + unpredictable demand Agile, quick response
Long lead time + predictable demand Lean, planning and execution
Long lead time + unpredictable demand Leagile production / logistics postponement
The Leagile Supply Chain
decoupling point: the point where the products is customised. Example: Nike shoes in the
end of the supply chain. And something that you can totally customize then the decoupling
point is in the beginning.
Critical Factors to Consider in Supply Chain Planning

 Focus on processes and flows
 Focus on high level objectives
 The importance of people
 Its supply chains that compete
 Increasingly it is supply chains that compete more so than individual firms and
products

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Chapter 9 – Procurement
Procurement as a strategic activity
Procurement involves specifying requirements,

identifying sources, evaluating options, acquiring
resources that are fit for purpose, cost effective
and sustainable”
Procurement as a strategic and tactical activity

has become increasingly important, because of the complexity supply chains
have these days. Also it has become a more significant in response to
governance issues that companies face with how, why and with whom to spend
money with.
Traditional view of procurement is about spend management and at one level.

A manufacturing company can spend max 70% of its sales on goods and
services.
A service company is less than 70%.
Procurement on different levels

Strategic: Make or buy decision? Procurement policy? Strategic
Alliance?
Tactical: Identifying suppliers Selecting suppliers, Assessing
suppliers
Operational: Placing, monitoring and receiving orders
Payments
Procurement is motivation for the buyer and supplier.

Buyer motivation Supplier motivation

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Wants the lowest price Wants the highest price

Increase scope Decrease scope
Buyer power Supplier power
Best service Fit for purpose
Wants to limit risk Limit liabilities?
This tension between buyer and seller is the essence of competition and this will
have the outcome to satisfy customer and supplier.
The difference between public and private sector procurement

In the public sector procurement in developed markets is subject to directives,
which drive levels of objectivity and transparency that are designed to support
better procurement in decision making. It is the base of procurement.
The private sector is free to make decisions that are discretionary to meet its
own specific objectives and not necessarily subject to the openness and
transparency that the EU procurement directives require.
Characteristic Public sector Private sector
Obligation to publish Subject to appropriate No obligation
contracts financial thresholds for
goods/services
Information generally Must be available Not generally available
available about tender process
Criteria Established at outset Can evolve and change
and applied as process develops
consistently
throughout process
Objectivity Objective criteria is Customer has
basis for decision- discretion about level
making must be of objectivity to be
applied applied.
Transparency Required for all aspects Level of transparency
in tender process in decision-making is
discretionary(naar
belief)
Challenge Unsuccesfull No right to appeal or
candidates can challenge
challenge outcome
Procurement and markets

Procurement strategies are grounded between relationship organization à
markets.
It is not as straightforward as commodity markets, intellectual property can
influence price setting.
Sourcing strategies provide a basis on which to consider a category of spend,

defining when a company should procure items within that category to have the
best deal and continuity of supply. It is the first step on how to secure supply on
local,national,regional or global basis to interact with market and supplier.
Sourcing strategies should include these requirements:
 Level
 Risk
 One-off (project) or recurring procurement
 Market maturity
 Technology lifecycle of market

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 Number of sources and potential suppliers

 Contract duration
 Potential for performance improvement and cost reduction
Leverage is the basic procurement principle to consider, that is to realize

economies of scope or scale. (global or local)
Aggregation Goods that are produced local will probably go global à to the
next level.
Managing value and risks

Kraljic model
Financial impact: Impact on financial results of the company; Percentage of
cost-price in the final product
Supply Risk: The number of suppliers; the reliability of suppliers
• Non-critical items: low supply

risk and low financial impact
• Examples: commodities such as
bolts, nuts, office supplies etc.
Strategy: buying at low prices and
making order processing as
efficiënt as possible.
• Leverage items: low supply risk

and high financial impact
• Examples: purchasing fish by
seafood restaurant, purchasing mattresses for Home & Living stores
• Strategy: Request prices and compare delivery conditions and choose the
cheapest without compromising on delivery conditions.
• Strategic items: high supply risk and high financial impact

• Examples: natural raw materials, car engines
Strategy: close relationship, strategic alliance, co-creation, long-term value
focus
• Bottleneck items: high supply risk and low financial impact.

• Examples: natural flavourings and pigments for paint
• Strategy: Assure supply by engaging in long-term contract agreeing of fixed
prices and delivery times. Keep extra stocks and seek alternative suppliers.
Main goal is to avoid disruption of production.
The role of the buyer
The role of a procurement manager is to create an appropriate level of
competition to manage the level of risk and value that the business faces when
sourcing or procuring goods, services or works.
TABLE 9.4
The procurement process

It should be considered as a process or lifecycle. It is repeated within a company
when contracts mature, expire and are renewed.
How to organize procurement resources and level of authority?

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This should reflect key policies and procedures/processes. This may include a
single location, legal jurisdiction or local economic factors VS. global
organizations that have a wider perspective.
Category managers manage a portfolio of contracts or category of spend with

similar characteristics that can be grouped and considered in strategic terms in
relationship to supplying across different business units or parts of an
organization. They provide leadership to source and manage the procurement.
Stage Description Key issues

Specify Specify the - Requirements should be defined from a
requirements that the technical, commercial and end-user
contract must deliver perspective.
- Organizations Don’t understand market
better than suppliers
- Sometimes the specification is
unclear/ambiguous.
Identify Identify suitable - Advertising and promoting the contract
potential suppliers who opportunity.
are able to meet - Determing an appropriate level of
requirements competition.
- Attracting new/more suppliers who may
able to add value
Select Select a suitable - Picking a winner
supplier(s) to deliver - Evaluation criteria in terms of quality&p
the contract - Balance needed in quality and price
Manage Manage the contract to - Success criteria are required to ensure
make sure highest met
deliverables are met - Lessons learned are applied in contract
Procurement and performance

 Financial Performance: Product Price Variance
 Delivery Performance:
o Throughput time
o Completeness of delivered products
o Damages of delivered products
Ethical sourcing
Sustainability
Procurement and supply chain management

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chapter 9
Procurement as a strategic activity

“Procurement involves specifying requirements, identifying sources, evaluating options,
acquiring resources that are fit for purpose, cost effective and sustainable”
“Purchasing is a subset of Procurement and deals with activities on the operational level
including getting good and arranging payments”
The most basic procurement principle to consider is leverage, that is to realize wconomies of
scope or scale when spend can be aggregated into larger contracts that can be procured
centrally as opposed to locally.
the role of procurement is to manage value and risk on behalf of the organization.
Sourcing strategies
 Clearly defined requirements should include:
 Level of spend being considered
 Risk
 One-off or recurring procurement
 Market maturity
 Technology lifecycle of market
 Number of sources and potential suppliers
 Contract duration
 Potential for performance improvement and cost reduction

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Procurement and relationship strategies

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procurement and markets

Managing value and risk
The role of the buyer
The procurement process
Procurement performance
Ethical sourcing
Sustainability
Procurement and supply chain management
Procurement at several levels

 Make or buy decision?
 Procurement policy?
 Strategic Alliance?
 Identifying suppliers
 Selecting suppliers
 Assessing suppliers
 Placing, monitoring
and receiving orders
 Payments

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Challenges of Purchasing Management

 Are you responsible for bad practises of your supplier?
 How to manage hundreds of suppliers?
 How to make a trade-off between ethical issues and efficiency-related issues?
 Which suppliers are more important?
Procurement: aspects to consider

 Defines the steps needed in order to secure supply
 What are the social and political risks related to my suppliers?
 Flexibility of my suppliers
 Innovative product (Electronics for example)
 Functional product (Food for example)
 What’s the nature of the relationship with suppliers?
 Long-term relationships?
 Short-term relationships?
Strategic procurement process: the Purchasing Portfolio

Two variables play a part in the analysis of the current purchasing situation:
Financial impact: Impact on financial results of the company; Percentage of cost-price in the
final product
Supply Risk: The number of suppliers; the reliability of suppliers
Based on these two variables 4 purchasing situations could be identified, according to Kraljic
(1983).
Which means : four way’s to deal with vendors
As said before, nowadays most companies have dozens or even hundreds of suppliers for
hundreds of components. So the question which arises is, which of my supplies? Which of
my componentsm which of my ingredients are more important than other ones? Well this
question can be answerd by two criteria
1. Profit: impact on financial result by, for instance, added value, effect on the
profitability of the company, percentage of cost-price in the final product.
2. Supply Risk: e.g. shortage of materials, number of suppliers (monopoly vs. oligopoly)
and possible entrance barriers, speed of technological development
Kraljic matrix

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Non-critical items
• Non-critical items: low supply risk and low financial impact
• Examples: commodities such as bolts, nuts, office supplies etc.
• Strategy: buying at low prices and making order processing as efficiënt as possible.
Leverage items
• Leverage items: low supply risk and high financial impact
• Examples: purchasing fish by seafood restaurant, purchasing mattresses for Home &
Living stores
• Strategy: Request prices and compare delivery conditions and choose the cheapest
without compromising on delivery conditions.
Strategic items
• Strategic items: high supply risk and high financial impact
• Examples: natural raw materials, car engines
• Strategy: close relationship, strategic alliance, co-creation, long-term value focus
Bottleneck items
• Bottleneck items: high supply risk and low financial impact.
• Examples: natural flavourings and pigments for paint
• Strategy: Assure supply by engaging in long-term contract agreeing of fixed prices
and delivery times. Keep extra stocks and seek alternative suppliers. Main goal is to
avoid disruption of production.
Procurement and Supplier Performance

 Financial Performance: Purchase Price Variance
 Delivery Performance:

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 Throughput time
 Completeness of delivered products
 Damages of delivered products
MC Question 1:
What’s the difference between outsourcing and offshoring?
a) Offshoring refers to transfering ownership of a business function to a third party,
whereas Outsourcing involves transfering a business function to another country
a) Offshoring involves transfer of a business function to another country, whereas
Outsourcing involves transfer of ownership of a process to a third party
b) Outsourcing involves only production, Offshoring involves all other processes
c) Outsourcing and Offshoring are identical
Offshoring vs. Outsourcing

Outsourcing:
transfer to a third party of the
management and delivery of a process
Offshoring
transfer of specific processes to lower cost locations
In other countries
MC Question
In what situation is the CODP
most upstream?
a) A customer takes a pre-packaged deep-frozen pizza from the freezer in the
supermarket
b) A customer orders a pizza slice which is heated and then handed to him
c) A customer orders a pizza, which is made and heated and than handed to him
d) A Customer takes a pre-packaged deep-frozen pizza from the refridge
Chapter 6
• Understand the cost structures and operating characteristics of the different
transport modes, and the relationships between freight rates and consignment
weight, dimensions and distance to be travelled
• Highlight key terms used in transport

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• Discuss the roles of distribution centres and highlight the concept of factory gate
pricing
• Identify some of the many issues (including the effect of supply chain strategies) that
can impact the efficiency of transport services
• Identify the range of issues to be considered in planning transport infrastructure
• Explain the application of a technique known as the transportation model
Modes of transportation
 Rail
Main
 Road considerations
 Water
 Air in selecting
 Pipeline
 Information superhighway
mode:
- Speed
 INTERMODAL: Combination of modes - Accessibility
- Reliability
Transport is non-value adding - Delivery frequency
- Delivery location
- Security
- Transport costs
- Risk of loss and damage
Intermodal transport
Is Where freight moves within a loading unit (known as an ITU – internodal transport unit),
this unit may move upon a number of different transport modes, But the freight remains
within the unit at all times
• Various types of ITUs:
– Standard sized containers (typically 20 and 40 feet in length)
– ‘Igloo’ containers used in air freight
which transport modality is the best option for each of these criteria
Speed Average time needed to cross the distance between two points (e.g. DC and buyer)
Accessibility Indicates if mode of transport can reach every location
Variability: Referes to the possibility that the delivery is started and ended at the time agreed prio
Delivery At what frequency can the mode of transport be deployed?
frequency
Risk What mode of transport displays the greatest risk with regard to cargo damage?
Freight Rates What are the transport costs per ton-kilometer related to a certain mode of transport?
Relationship between rate and distance- between rate per kilo and consignment weight

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also known as volumetric charging (charging the company for the volume of the product and
not the actual weight )
Chargeable weight: the greater between actual weight and volume weight.
Characteristics of the different transport modes
macro volumes of freight are usually measured in freight tonne kilometres (FTKs), that is
volume of freight measured in tonnes multiplies by the distance the freight travels measured
in kilometres. Macro volumes of passengers are usually measured in revenue passenger
kilometres (RPKs).
Transport operations, distribution centres and factory gate pricing

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The role of distribution centres and particular a concept known as “factory gate pricing”
-in the 1970 and 1980 distribution centres (cd’s) were introduced also called :
regional distribution centres (RDCs) and national distribution centres (NDCs)
(distribution centre is a warehouse where large number of products are deliverd by different
suppliers)
- in the 1990 consolidation centres (CCs) were added and served to consolidate
deliveries from multiple suppliers into full loads, which could be deliverd to a DC.
– Enabling factory gate pricing
-recent retailers take control of the delivery of goods into their DC’s and this is known
as factory gate pricing- FGP. (reduced delays)
Inbound logistics in the retail sector
The evolution of grocery distribution

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Factory gate pricing (the seller repairs the product and retailer needs to deal with the
shipment)
• Retailers take control of the delivery of goods into their distribution centres (via their
CCs)
• This gives a single point of control for the inbound logistics network
• FGP is the use of an ex-works price for a product plus the organisation and
optimisation of transport by the purchaser to the point of delivery
The transportation model

• Seeks to work out a minimum total transport cost solution for the number of units of
a single commodity that should be transported from given suppliers to a number of
destinations
Full container loads

The term FCL is used in transport to refer to full container loads
• The term LCL is used to refer to less than full container loads
• When carriers have a consignment that will not fill an entire loading unit they will
usually try and build a consolidated shipment to make up a FCL
Chapter 8
Learning objectives
 Describe and differentiate the various types of companies that provide logistics
services
 Discuss the role of fourth-party logistics
 Illustrate the use of incoterms and bills of lading to show how responsibility along the
supply chain is clarified and managed
 Examine the range of issues in, and the process employed for, selecting logistics
service providers

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 Also illustrate a number of other pertinent concepts and terms often used in logistics
systems
Classifying logistics companies

Many companies have sought in particular to move away from own-account transportation
to third-party transportation
 Creating logistics service providers (LSPs)
different types of companies operate in this sector. Categorized:
 Hauliers or trucking companies (exception to carry freight)
 Freight forwarders (street travel agents, that arrange transport)
 Non-vessel-owning common carriers (NVOCCs) (smaller shipment
that comprises a number of unique, shipments placed together) also
groupage or consolidated shipment.
 Couriers
 Integrators (e.g. FedEx, UPS and DHL)
3PL
 3PL: A third-party logistics provider is a firm that provides outsourced logistics
services to companies for part or sometimes all of their supply chain management
functions. 3PL companies typically specialize in offering integrated operations-,
transportation-, warehousing and data-management services.
LSPs versus 3PLs

 All companies that provide logistics services are LSPs
 LSPs that provide multiple logistics services, often integrated, are third party logistics
providers (3PLs)
Typical 3PL services

 Transportation
 Warehousing
 Pick and pack
 Light manufacturing
 Vendor managed inventory (see chapters 3 & 12)
 Customs clearance
 Trade financing
 Managing reverse logistics
 Parts distribution
 Inventory management
Fourth party logistics (4PLs)

 Offering total outsource supply chain solutions
 4pl is more coordination not doing anything they give the tasks.
 4PL: manages all logistics activities and acts as “control tower”
Carrier responsibilities
 Once freight leaves a consignor(seller) it is the responsibility of the LSP to deliver it to the
consignee as & when required

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 When the seller ships it, it is called pre-carriage. If it arrives, and is shipped to
another location. It is called main-carriage. From that location, to buyer it is on-
carriage.
 Documentation to identify responsibility in-transit must accompany the freight
o The bill of lading or airway bill (AWB)
 Consolidated shipments are covered by a single master airway bill
 Individual shipments are covered by a house airway bill
o Cost & risk issues with freight during transit are resolved using incoterms (i.e.
international commercial terms)
 But do not replace legal agreements
Incoterms
Incoterms 2010 rules are standard sets of trading terms and conditions designed to assist
traders when goods are sold and transported.

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LSP contracts
 Services to be provided
 Costs and costing approach
 Terms of carriage, applicable incoterms, insurance
 Speed/transit time
 Performance metrics, service levels and reliability
 Information systems and documantation requirements
 Core versus value-adding services required
 Staffing issues
 Reverse logistics issues
 Implementation/termination/ability to alter conditions
 Details on LSP history, client references, etc.

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Generalised costs
 A common concept in transport economics
 Demand for transport is not simply dependent on financial costs but on overall
opportunity costs (including speed, reliability and timetabling of the service)
 Three main component of generalised costs:
 Money costs
 Time taken
 Effects of loss, damage and delay
 Hence the trade-offs in transport decision making
Hierarchy of needs for freight purchasing

-objective appraisal of service
-company image
-ease of use/ convenience factors
-price
-risk avoidance/ reduction factors
chapter 10
Learning objectives
 Explain the significance of inventory in logistics and SCM
 Introduce the costs involved in inventory management
 Introduce common inventory control systems designed to reduce costs
 Identify inventory reduction strategies including just-in-time inventory management
Reasons for holding inventory

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The importance of inventory management

 Inventory is another name for materials and is any material that a firm holds in order
to satisfy customer demand (and these customers may be internal and / or external
to the firm)
 Inventory costs money! It ties up working capital and affects cash flow
 Firms need to hire people to take care of inventory
 The goal in inventory management is to minimise inventory holding while
maintaining a desired customer service level.
Cost related with inventory

 Inventory carrying costs:
Intrest
Risk
Space
 Ordering Costs
 Cost of having to say no: lost sales
Inventory Turnover= cost of all goods sold in a year

----------------------------------------
Value of average inventory held throughout the year
 Says something about efficiency of organization.
ROI

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Inventory reduction strategies

 Inventory centralization: variation of total demand is reduced
(INVENTORY POOLING)
 Delayed product differentiation: reducing variation by combining demand at different
points is the case of a manufacturer making multiple products (RISK POOLING)
 Part commonality: attempts simply to reduce the number of different parts in a
product range wherever possible
 Transit inventory reduction
 Reduce leadtimes: cheaper transport modes may be slower
Inventory centralisation
Inventory reduction principles (cont.)

 Just-in-time inventory system (JIT): making do with the minimum possible level of
inventory holding
 Inventory hides problems!

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 By purposely removing inventory holdings, the problems the inventory

was covering are surfaced, and the problems are then proactively
fixed
 Small lot production
 Ordering in small quantities keeps the average inventory level small
 Hence reduce order processing costs so that the ideal of small
quantity ordering can be accomplished
 The time and effort spent in process setups are the manufacturing
equivalent of order processing costs
 Hence, reduce the time and effort in setups
Small versus large quantities
Inventories
Inventory level can differ considerably per product.

Bier: piek met carnaval en in de zomer
Koffie: gelijkmatig
Geschenkartikelen: piek met Sinterklaas en Kerst, constante productie leidt tot toename van
het op voorraad nemen van geschenkartikelen.
Economic Order Quantity: Camp’s Formula

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D: annual use of a particular item, in numbers of items per year

S: order- processing in cost in $/order
P: price per item, in $/unit
H: holding cost per unit per year, in $/unit/year
Q: number of items ordered in one purchase order, in units
T: time periods between purchase order in fraction of a year
SS: safety stock, in units
L: lead time, in fraction of a year
I: current inventory on hand, units
TAC: total annual cost
Inventory policy: techniques

 EOQ: please calculate pharmaceutical
Q: order quantity
D: demand per period (10.000)
K: cost of ordering: 3000 Euro
h, inventory carrying cost per unit (600 Euro) per period (IRS: 10%)
2 KD
Q* 
h
Calculation
 H: 600*0,1: 60
 K: 3000
 D: 10.000
 Q: 1000
 Often used?
Problems of Camp’s Formula

 Weak point in Camp’s Formula:
 Assumption order costs are fixed and KNOWN
 Assumpion cost for holding a product in inventory are constant and KNOWN
 Demand of products is known and fixed

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 The order must be delivered in one instance

These Assumptions are not (always) correct!!
Optimale bestelgrootte is 800 stuks
Inventory level
Inventory level at constant lead time
Inventory level
Inventory level changes in the case of demand/time of delivery that is not constant. Here:
stock-out as a result of bigger demand and a lead time
Nee-verkoop kan voorkomen worden door vervroeging van het bestelmoment/ verhoging
van het bestelniveau
ABC classification

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The BULLWHIP Effect
Supply Chain Pipeline: make arrangements to reduce them: Supply Chain Management
Chapter 11
Learning Objectives
 Define the role of warehousing in contemporary global supply chains.
 Explain how material movements are planned and controlled.
 Explain material handling processes within warehouses and distribution centres.
 Offer insights into how warehouses re managed and how work is organized.
Value-Adding Activities
 Warehousing operations can achieve this by:
 Creating bulk consignments (from small truck into one big one)
 Breaking bulk consignments (from 1 big truck to different small ones)
 Combining goods (assembly)
 Smoothing supply to meet demand (storage in case of seasonal demand)
Generic Warehouse Functions

 All activities within a warehouse are associated with one of the 4 following core
functions

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Cross Docking
 bypasses the storage area in warehouses and distribution centres.
 reduces cost
 improves customer service
 non-value-adding functions are eliminated
 typically employed for fast moving freight with constant demand
Warehouse Management Systems

A Warehouse Management System (WMS) manages information processes and material
requirements transmitted from the management information system (such as ERP enterprise
resource planning) to:
 Trigger the right work …..
 ….. at the right time across the operation ….
 …. to meet demand.
WMS Information Inputs and Outputs
Material Handling and Storage

 Automated material handling improves and standardises warehouse performance by
minimising human intervention

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 Storage solutions vary depending on the volume, variety and throughput of freight in
a warehouse of distribution system.
 Pallet storage
 Non-pallet storage
Storage and Picking Combinations
Work Organisation and Job Design

 Automation and computerisation is reducing human intervention in the physical
handling of freight, and increasing information interaction which has implications for
job design
 Socio-Technical System Theory (STS) focuses on the impact of implementing
warehouse technologies on the workforce
 Fundamental principles of STS theory are
 Joint optimisation of the technical and social system
 Quality of work life
 Employee participation in system design
 Semi-automomous work groups
Socio-Technical Systems Theory

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chapter 16
Learning objectives
• Understand what sustainability involves in the context of logistics and SCM
• Understand key terms such as carbon footprints, food miles, reverse logistics, etc
• Illustrate best practice examples of attempts to reduce environmental footprints
• Understand the link that exists between growth in logistics and concomitant growth
in the demand for transport
• Examine the different aspects of the two key dimensions used in logistics to reduce
environmental impacts, namely scale and efficiency
Sustainability
• Sustainable logistics is concerned with reducing the environmental and other
disbenefits associated with the movement of freight. Sustainability seeks to ensure
that decisions made today do not have an adverse impact upon future generations.
Sustainable supply chains seek to reduce these disbenefits by inter alia redesigning
sourcing and distribution systems so as to eliminate any inefficiencies and
unnecessary freight movements

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The Green Revolution

• The international Kyoto Protocol has called for a 60% reduction in carbon emissions
by 2050
• Carbon footprint: the environmental disbenefits associated with economic activities
such as the movement of freight (larger carbon footprint when the product has
travelled a long distance)
• Food miles: the distance by which the various components of a particular food item
have to travel before final consumption
Measuring the Carbon Footprint

• Greenhouse Gas (GHG) emissions are those that contribute to climate change, with
most (approximately 95%) being in the form of carbon dioxide (CO 2) which results
from, among other activities, the burning of fossil fuels. Various entities have
developed guides on how to measure and report GHG emissions.
Measuring the Carbon Footprint

In the UK defra (the UK Government department responsible for the environment, food and
rural affairs) has given detailed guidelines and look-up tables online but in essence the
calculation comprises:
(Fuel used) x (The appropriate emission factor for the type of fuel used) = kgCO 2eq*
* eq refers to equivalent as this also captures other gases such as methane and nitrous
oxide.

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3ways in Improving sustainability of logistics and Supply chain systems

1 Redesigning supply chains
2 Using scale to reduce the negative environmental effects of logistics activities (i.e. by
moving freight in larger single loads, thus cutting down on both unit costs and
disbenefits)
3 Similarly promoting various efficiency solutions (by transporting and handling freight
more effectively
U rb a n
DC1 R e g io n a l D C L a s t M ile D e liv e r y DC1 R e g io n a l D C C o n s o lid a t io n L a s t M i le D e l i v e r y
C e n te r
O ne M an O ne M an O ne M an
C a r M a il C argo O ne M an P a rc e ls
Tw o M an Tw o M an Tw o M an O ne M an
C a rgo
C a r M a il O ne M an C o u rie r
Tw o M an C a r M a il
C a r M a il O ne M an C o u r ie r
Cargo Tw o M an O ne M an
Tw o M an O ne M an C a rgo Cargo
C argo
C a r M a il C a r M a il P a r c e ls
C o u rie r
C a r M a il
P a rc e ls C a r M a il
C o u rie r C a r M a il
P a r c e ls C a rgo b o th
P a r c e ls P a r c e ls C a r M a il
P a r c e ls P a r c e ls
C o u r ie r P a r c e ls Tw o M an
C o u r ie r
Current Logistics Network Redesign of Logistics Network
Wat is er nodig om 4C mogelijk te maken?

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The link between economic growth and transport growth

• There is a link between economic growth and transport
– i.e. as economies grows, more transport is required to move which will
increase economic growth.
• A core issue for policy makers is to strive to decouple economic growth and transport
growth
– i.e. to find ways of allowing economic growth without comparable growth in
transport
2.The role of ‘scale’ in logistics and SCM

• Only certain ports can handle ultra large vessels
• There is growing traffic concentration at certain other ports
– Increasingly, many mid-sized ports are playing a feeder role to the very large
ports as hub and spoke networks
– In these networks the larger vessels ply between the major transhipment
hubs
– The prosperity of the smaller ports is increasingly dependent on the route
strategies of the major shipping lines
3.Efficiency Solutions
• In addition to looking to increased scale, many logistics operators are also seeking
efficiencies with how they move and store freight so as to reduce the environmental
impact of their activities.
Port Centric Logistics

One advantage of port centric logistics is that it cuts down on the number of empty (return)
containers on roads by ‘stripping’ (i.e. emptying) imported containers at the port. This also
allows faster repositioning of containers to another port where

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Efficiency Solutions
• In logistics, efficiency solutions are not just restricted to transportation. The area of
green warehouse design is also growing in popularity. Many warehouses are vast
structures and their environmental footprints can be reduced by for example more
efficient lighting and heating / refrigeration systems.
Chapter 17
Learning objectives
• Explain the basics of reverse logistics and the reasons for employing reverse logistics
• Describe the various recovery options in reverse logistics such as reuse,
remanufacturing and recycling
• Identify the characteristics of the remanufacturing recovery option and highlight the
difference between forward and remanufacturing recoverable logistics environments
• Explain the key success factors for the implementation of reverse logistics systems
• Identify and understand performance metrics relevant to the recovery options of
reverse logistics.
Definition of reverse logistics

Reverse logistics is a process in which a manufacturer systematically accepts previously
shipped products or parts from the point of consumption for possible reuse.
Reverse Logistics and Green Logistics

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Motivations for reverse logistics

e-waste is the most fast growing
• Government Policy and Legislation
• Economic Considerations
• Environmental Considerations
• Shift Towards Buying Sets of Services
Recovery options in reverse logistics

• Reuse
– Reuse refers to a process in which the recovered product is used again for a
purpose similar to the one for which it was originally designed.
• Remanufacturing
– Remanufacturing involves a process of reducing a product into its constituent
parts. It requires more extensive work, often complete disassembly of the
product.
• Recycling
– Recycling is the process of collecting and disassembling used products,
components and materials, and separating them into categories of like
materials, such as plastic, glass etc., and then processing them into recycled
materials.
Recycling
Increasingly restrictive environmental regulations and a potential economic benefit have
encouraged firms and municipalities to recycle. The success of recycling depends on :
1. whether or not there is a market for the recycled materials; and
2. the quality of the recycled materials.

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A Reverse Logistics Network

A reverse logistics network may occur in either a closed or open-loop system.
• In a closed-loop reverse logistics system origins (sources) and destinations (sinks)
coincide so that flows cycle in the system. Companies adopting this system collect
their used products and either refurbish and resell or remanufacture them or they
recycle them.
A Reverse Logistics Network

• open-loop system, the flows enter at one point of the logistics system and leave at
another. Companies using this system might assume responsibility for collecting and
finding markets for their products, but do not use the recovered materials for
themselves.
Characteristics of the remanufacturing environment in reverse logistics

• Supply – demand balance is one of the most difficult variables to predict in a
remanufacturing environment is de distribution of returns of end-of-life products.
• Accumulation and shortage of parts
– Uncertainty in Timing and Quantity of Returns
– Stochastic Routings and Processing Times: firms involved in remanufacturing
need to assess the condition of parts disassembled from return products and
this means scheduling work stations.m

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• Logistical network
FACTORS FOR SUCCESSFUL REVERSE LOGISTICS IMPLEMENTATION

8 factors which play a significant role in the implementation of reverse logistics.
External factors:
1. Legislation (governments)
2. Customer demand
3. Incentive
Internal factors:
1.Environmental concerns
2.Strategic cost/benefits
3.Volume and quality of returns
4.Resource
5.Integration and coordination
Performance measures in reverse logistics

A performance measure, or a set of measures, is used to ascertain the efficiency or
effectiveness of logistics systems. Traditional measures are typically concerned with:
1. Customer satisfaction,
2. Service level,
3. Responsiveness,
4. Cost
5. Quality

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Samenvatting Global Logistics and Supply Chain

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History of Logistics and SCM(supply chain management) in companies

lean: cutting out extra activities

The evolution of logistics and supply chain management

-Material substitution: replacement of physical product by virtual product

The evolution of the integrated supply chain

Downloaded by Kamalapattie Persaud (kamala.persaud@gmail.com)

3 key flows of csm :

What is supply chain management?

Can you link it to a river?

Downloaded by Kamalapattie Persaud (kamala.persaud@gmail.com)

Downstream: is to the customers

Distinguishing logistics and SCM

traditionalist view: scm as an add-on to logistics

Applications to manufacturing and services

Downloaded by Kamalapattie Persaud (kamala.persaud@gmail.com)

Growth in international trade

GNI; gross national income

Total World Merchandise Exports 1950-2009

Measuring Logistics Performance

Downloaded by Kamalapattie Persaud (kamala.persaud@gmail.com)

Top 10 countries in the global LPI

LPI is more for general these are more sea sector

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Foreign direct investment

Directional Imbalances (also called freight markets)

Major Trade Corridors

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Traditional versus circular routeings

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Virtual organizations: online organizations that outsource almost everything.

Reasons for manufacturing outsourcing

Reasons for offshoring

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-Late delivery (most common)

Criteria for evaluating and selecting outsourcees

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terms of the outsourcers requirements.

A framework for evaluating potential outsourcees

Outsourcer and outsourcee relationship development

Supply chain integration

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 Collaboration is a relationship between supply chain partners developed over a

EDI: the edi process looks like this- no paper, no people

Supply chain integration

there are 4 primary modes of

-internal integration: cross-functional

-forward and backward integration:

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 Can be achieved by structuring the organisation and the design and / or

Supply chain collaboration principles

The prisoner’s dilemma

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Collaboration has 2 dimensions:

The two dimensions of collaboration applied to transport management

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Humanitarian logistics: competition between supply chain, during humanitarian disaster.

Supply chain collaboration methods

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‘Top down’ : ALDIà overall strategy can be classified as cost leadership