C1.

Overview of Logistics and

Supply Chain Management
MBA. Võ Thị Xuân Hạnh
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Learning outcomes

Understand the concept of

Logistics and Supply chain

Determine the significance of

Logistics and Supply chain in
business activities

Be able to recognize logistics in

every daily activity
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Contents
I. Supply Chain Management:
•1.1 Definition
•1.2 Flows in supply chain

II. Logistics Management:

•2.1 Definition
•2.2 Economic utility in Logistics
•2.3 Seven Rs in logistics
•2.4 Types of logistics
•2.5. The increased importance of Logistics
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 Knh5
Kênh bán hàng
gián tiÿp
The basic stages of a supply chain

Supplier Manufacturer Warehouse Retailers Consumer

Distributor

Buy Make Move Sell Serve

things things things things things
Procurement Production Transportation
or Purchasing Inventory belong to
Warehousing Marketing
Distribution
belong to management
Operations
management
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1.1 Definitions – Supply Chain Management

Management of material and information flow in a supply chain to
provide the highest degree of customer satisfaction at the lowest possible
cost. Supply chain management requires the commitment of supply chain
partners to work closely to coordinate order generation, order taking, and
order fulfillment.
- Business Dictionary -

Supply chain management is a set of approaches utilized to

efficiently integrate suppliers, manufacturers, warehouses, and stores,
so that merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time, in order to
minimize system wide costs while satisfying service level
requirements.
- Simchi-Levi et al. (2003, p. 1) -
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1.2 Flows in a supply chain
Information flow

Reverse product flow

1. Product flow

2. Reverse
product flow

3. Cash flow Supplier Manufacturer Warehouse Retailers Consumer

Distributor
4. Information Primary Secondary Secondary Secondary
product product product product
flow flow flow flow flow

Primary cash flow

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 Effectiveness:HowwelldoesacompanydowhatifsaysitIsgoin
gtodo?
Efficiency : How well ( or poorly )company resources are

2.1 Definitions
used to achieve what a company promises it can do
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Forward flows and storage : those directed toward the
point of consumption .
Reverse flows and storage ( reverse logistics ) : those that
originate at the point of cosumption

 According to the CSCMP:

“Logistics management is that part of supply chain
management that plans, implements, and controls the
efficient, effective forward and reverse flow and
storage of goods, services, and related information
between the point of origin and the point of
consumption in order to meet customers’ requirements
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2.1 Definitions
Forward flow

Raw material Supplier Manufacturer Warehouse Distributors Retailers End users

Reverse flow

Plans
Logistics
Implements Management
Controls
Economic utility :
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2.2 Economic impacts of logistics
The value orusefulness of
a product in fulfiling
customer needs or wants

 A poor transportation infrastructure 2 key drawbacks that have

 High levels of inventory limited the expansion of
Vietnam’s economy
Economic utility

A product’s being in a form that can be used by the

Form utility customer and is of value to the customer

Having products available where they are needed by

Place utility customers; products are moved from points of lesser value
to points of greater value

Having products available when they are needed by

Time utility customers

Possession The value or usefulness that comes from a customer being

utility able to take possession of a product
2.3 Seven Rs in Logistic

Right product Right quantity

Right
condition/quality

Effectiveness +
Responsiveness
Right place
Right cost/price

12 Right time Right people

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2.4 Types of Logistics

Reverse Logistics

Return Reuse Recycle Disposal

Suppliers Customers
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Mass logistics and Tailored logistics
When companies use one logistics
approach to target ALL their customers. Mass logistics
When companies use various logistics approaches
to target various groups of their customers. Tailored logistics

Urban area/
City centre

Suburban area/
Rural area

Transportation
activities Residential area

Mass Tailored
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Humanitarian logistics
→ Logistics for non-profit situations
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2.5. The increased importance of Logistics
1. Economic deregulation
2. Changes in consumer behavior
• Customized customer
• Changing family roles
• Rising customer expectations
3. Technological advances
• Disintermediation
• Reduction of paper works
• Shipment tracking
4. The growing power of retailers
5. Globalization of trade
➔ 1 Logistics system does not fit all companies