Basic Logistics Course

(BLC)
Topic:Overview of Supply
Chain Management
By:Allan F.Galvez, Ph.D.

Interactive
T discussion
Business Perspective
 What is Supply Chain Management

Supply Chain: “A system of organizations, people, technology,

activities, information and resources involved in moving a product or
service from the supplier to customer.

For example supply chain activities transform natural resources, raw materials and
components into a finished product that is delivered to the end customer.”
 What is Supply Chain Management

• Integration of activities:
 Procure Materials and Services;
 Transform it to intermediate goods and final
product
 Deliver the product through a Distribution system
 Supply Chain Management

Philippine Institute of Supply Management (PISM) identified

four (4) pillars of Supply Management:
• Purchasing
• Demand and Replenishment
• Logistics Management
• Customer Service
Demand Management
Product choices
What is
Logistics?
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Bataan Death March
Expired Relief Goods
Logistics
 LOGISTICS
DEFINITION
 It is derived from French word
“LOGER” which means art of war
pertaining to movement and supply of
armies.

 Logistics means the art of

managing the flow of raw materials and
finished goods from source to the user
or customer.

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 Supply Chain Management - Logistics
• Logistics Operation has the following main elements:
 1. Warehousing*
 2. Handling and Storage*
 3. Inventory Management*
 4. Transportation and Delivery
 CATEGORIES OF
LOGISTICS

INBOUND LOGISTICS

It is concerned with the smooth and

cost-effective inflow or receiving of
materials and other manufacturing
process from suppliers to plant.

For proper management, the management must maintain a

continuous interface with the suppliers or vendors.

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CATEGORIES OF
LOGISTICS

INBOUND LOGISTICS

 Material Handling
 Warehousing & Storage
 Inventory Control
 Transportation

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 CATEGORIES OF
LOGISTICS

OUTBOUND LOGISTICS

It is concerned with the flow of finished

goods and other related information
from the firm to the customer.

For proper management, the management must maintain a

continuous interface with the transport operators and
channels of distribution.
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CATEGORIES OF
LOGISTICS

OUTBOUND LOGISTICS

 Order Processing
 Warehousing & Storage
 Transportation
 Distribution

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7 R’s OF LOGISTICS

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Warehousing

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 Warehousing
It is the act of storing
goods that will distributed
or sold later.
A good definition of a
warehouse is “a planned
space for the efficient
storage and handling of
goods and materials.
 Type of Warehouse Operation
• Raw Materials storage – to ensure continuous production
• Finished Goods Storage – provide or safety stock for companies.
• Consolidation or transit warehouse – a form of warehousing that pools together
small shipments from a number of suppliers in the same geographical area.
• Cross-docking centers. Products from a supplier or manufacturing plant are
distributed directly to customers. Receiving products through an inbound dock and
then transferring them across the dock to the outbound transportation dock
 Top 5 Warehouse
Challenges

1. Inventory Accuracy
• problem of either running
out of stock at the wrong
time or carrying too much
stocks.
Top 5 Warehouse
Challenges
.2.Inventory Location
• Without adequate insight
into location, pickers take
longer to find the item to
ship, which slows the
loading process
 Top 5 Warehouse
Challenges
3. Space utilization / Warehouse
Lay-out
• It is not about how much space
you have; its about optimizing
the space to avoid unnecessary
labor
 Top 5 Warehouse
Challenges
4. First in First Out
(FIFO)
• Item which is moved in
first will be moved first
out of the system.
 To avoid having expired products inside the Warehouse
To Assure a First-In First-Out (FIFO) policy

STORAGE AREA

Fresh Stocks

Older Stocks
PICKING AREA

STAGING AREA

Shipping Door
 Top 5 Warehouse
Challenges
5. Picking Optimization
• For warehouses that still have manual
processes in place, there tends to be no
common route taken to pick item for
shipment, which adds unnecessary
time to the process.
First In First Out (FIFO)
 Logistics - Warehousing
Warehouse Management System (WMS)

A warehouse management system (WMS) is a software application

that supports the day-to-day operations in a warehouse. WMS
programs enable centralized management of tasks such as tracking
inventory levels and stock locations.
 Pallets
A pallet is a horizontal platform, with a bottom
deck which allows it to be lifted and moved by
material handling equipment
Standard pallet size = 1M x 1.2M

A maximum rating of 1000 kgs as a

safe working load, and not to
exceed 4000 kgs when stacking
loaded pallets on a solid surface.
Empty pallets can be stored 40
high.
The Critical Role That
Pallets Play

They reduce loading and

unloading time.
They improve working
conditions and worker
safety.
 Racking System
Pallet rack is a material
handling storage aid
that allow for the
storage of palletized
materials in horizontal
rows with multiple
levels.
 Pallet Jack

A pallet jack is a tool

utilized around your
warehouse to lift and
move pallets with
relative ease
 Forklifts
Forklift truck, fork truck. a small
vehicle with two power-operated
prongs at the front that can be
slid under heavy loads and then
raised for moving and stacking
materials in warehouses, shipping
depots, etc.
Categories of Logistics

THIRD PARTY LOGISTICS (3PLs)

A firm that outsources the logistics part of

its supply chain to a third party which is
known as a third-party logistics provider.

3PLs provide transportation, warehousing, cross-

docking, inventory management, packaging, and
freight forwarding, which are integrated or bundled
together with the provider.

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Basic Warehouse Lay-
out
 ABC Classification /
Locating Stocks
Fast Moving Items

ABC classification begins by

understanding Pareto’s Law or
the 80/20 rule. This states that
roughly 80 per cent of effects
come from 20 percent of causes
 Warehouse Space Computation
• Assuming we have 80,000 cases or
boxes and we want to know the
floor area of our warehouse where
we can store the said number of
boxes or cases. We will use the 3
options.
Notes:
Pallet Dimension (PD) – 1.2 Sq.meter
For Option 1 PD is 1.7
For Option 2 – 80% is constant
Boxes or cases per pallet is dependent
on the palletizing scheme of the
product
 Boxes
Cases Warehouse Space
Option
1 80,000 = 2720 Sq.meter Number of cases divide by Cases per pallet then Multiply by 1.7
*1.7 is constant for option 1
cases per pallet is given or is dependent on the palletizing scheme of the product

Option
2 80,000 = 2400 Sq.meter Number of cases divide by cases per pallet multiply by 1.2 divide by 80%
cases per pallet is given or is dependent on the palletizing scheme of the product
1.2 actual pallet dimension is constant for option 2, likewise the 80%

Option
3 80,000 = 4000 Sq.Meter Number of cases divide by cases per pallet multiply by 100 divide by 40
cases per pallet is given or is dependent on the palletizing scheme of the product
For every 100 sq.meter total pallets that can be stored is 100, thus 100 and 40 is
Note: 50 cases per pallet is used constant for Option no.3
Transportation
and Distribution

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 Transportation and Distribution

Transportation refers to the

movement of product from
one location to another as it
makes its way from the
beginning of a supply chain
to the customers hand.
 Mode of Transportation
Pros: - Trucks-
1. Loading and unloading in trucks is easy
2. Trucks are commonly found, their availability is one of the biggest
advantage.
3. Using trucks for distribution of warehouse goods in most
economic.
Cons:
1. Delivery time of distribution increases with distance
2. Can be costly when distance is large
 Mode of Transportation
- Railways-
• Railways are another media to deliver goods from one warehousing and
distribution centre to other. They come with their own pros and cons.
• Pros:
• 1. Large quantities of goods are delivered for lower costs
2. Generally, few delays are caused while using railways
Cons:
1. Trains have their own set timetable that they follow so they might not be
too flexible.
 Mode of Transportation – Waterways
• Pros:
• 1. The cost of using waterways for distribution of goods is very low
Cons:
Few of the main cons of this method are:
1. This method is very slow compared to any other method.
2. It is least flexible as waterways have their own timetable to follow and might not be setting
sail for months at times.
3. Delays can be caused by weathers, making the process even more slow.
• Air Transportation:
Almost all well-established warehousing and distribution companies in New Zealand opt for
this method as it is the most reliable and swift.
 Mode of Transportation - Air Transportation

• Pros:
1. Speed wise this method is the fastest.
2. Reliable in terms of time.
Cons:
1. This is the most costly method compared to others.
•
 Intermodal Transportation

• Intermodal transportation is the use of two or more

modes, or carriers, to transport goods (freight) from
shipper to consignee.
RORO Ship
 Two types of Loading and delivery
Palletized Loading and
Delivery Manual Loading and Delivery
Thank You