INTRODUCTION TO LOGISTICS AND SUPPLY CHAIN MANAGEMENT

HP code: 016021S

- Lecturer: Nguyen Dang Le Huan (Howard)

- Bachelor of Engineering Sea Transport Economics (UTH)
- MSc International Shipping and Logistics (UTH & Solent University)

1
 COURSE DESCRIPTION
- Understand the concept of Logistics and Supply Chain
- Master the aspects of Supply Chain
- Awareness of the Importance of Logistics and Supply Chain Management

2
 COURSE AIMS
- Understand the concept of Logistics and Supply Chain.
- Master the aspects of Supply Chain.
- Awareness of the Importance of Logistics and Supply Chain Management .

LEARNING OUTCOMES STANDARDS

- Distinguish the difference between Logistics and Supply Chain.
- List the major aspects of the supply chain and describe the role of each aspect.
- Understand how aspects of the supply chain interact, link, and influence each other.
- Describe how Logistics and Supply Chain Management contributes to organizational
success and creates competitive advantage.

3
 CONTENT

Chapter 3: Information
Chapter 1: Overview
Chapter 2: Overview of technology in logistics
of Supply Chain
logistics and supply chain
Management (SCM)
management

Chapter 4: Distribution Chapter 5: Current and Chapter 6: Electronic

channels and related future types of commerce and E-
components transportation logistics

4
 CHAPTER 1: OVERVIEW OF
SUPPLY CHAIN
MANAGEMENT (SCM)

1.1 Past, present & future of SCM

1.2 Basic concepts of SCM
1.3 Benefits from SCM for business
1.4 Steps to adjust SCM to suit the enterprise
1.5 Members in SCM
1.6 Processes in SCM
1.7 SCM coordination work
1.8 Future SCM trends

5
1.1 Past, present & future of SCM

This Video will brief on the evolution of Supply chain Management:

https://www.youtube.com/watch?v=B9OSy-JM8mQ

6
7
1.2. Basic concepts of SCM

Definition:
Supply Chain
Supply Chain Management
Logistics

8
 “The system of people and things that are
Supply Chain involved in getting a product from the place
where it is made to the person who buys it”
(dictionary.cambridge.org).

“A supply chain is a network of facilities and

distribution options that performs the functions
of procurement of materials, transformation of
these materials into intermediate and finished
products, and distribution of these finished
products to customers.” (Ganeshan and Harrison, “An Introduction
to Supply Chain Management”, 1995).

• A supply chain is the process of assembling

the raw materials parts and assemblies and
delivering them to the customer.

9
 Steps to
create Nylon
Supplex
Parkas for
men

10
Series (chain) of firms in a coordinated / integrated system (pipeline)

•  firms  activities  resources

Move product, material or service

•  from supplier (inbound)

11
•  to customer (outbound)
Parts of the chain

•  vendors/suppliers  manufacturers
•  wholesalers  service providers
•  sales channels (retailers)  consumers
Supply Chain Flow

12
Explore and provide
examples of the
supply chain for a
specific product from
a company?

13
Thi s Photo by Unknown Author is licensed under CC BY
Supply Chain Management

14
 Supply Chain Management
• Supply chain management is coordination of production, inventory,
location, transportation, and information among the participants in a
supply chain to achieve the best mix of responsiveness and efficiency for
the market being served.” (Hugos, Essentials Of Supply Chain Management, 4th Edition, 2018)

15
 SCM encompasses the planning and controlling of
all processes involved in procurement, conversion,
transportation and distribution across a supply
chain. SCM includes coordination and collaboration
Supply Chain between partners, which can be suppliers,
intermediaries, third party service providers, and
Management customers. In essence, SCM integrates supply and
demand management within and between
companies in order to serve the needs of the end-
customer. (Council of SCM Professionals-CSCMP, 2010).

16
 Logistics
• Logistics is the process of planning and
executing the efficient transportation
and storage of goods from the point of
origin to the point of consumption.
• 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 customer requirements
(CSCMP, 2012).

17
 Logistics
Logistics is the positioning of resource
at the right time, in the right place, at
the right cost, at the right quality.
(CILT, 2012).

18
 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 Reverse Logistics
• Salvage and scrap disposal

19
SUPPLY CHAIN MANAGEMENT IS THE PROCESS THAT STARTS WITH THE
EXTRACTION OF RAW MATERIALS AND ENDS WITH GUARANTEEING TO GET THE
FINAL/FINISHED GOODS AND DELIVERING THE SAME TO THE RIGHT CUSTOMER IN
THE RIGHT QUANTITY AND AT THE RIGHT TIME.

SUPPLY CHAIN MANAGEMENT CONTROLS THE DEVELOPMENT OF RAW

MATERIALS INTO FINISHED GOODS THAT MOVE FROM THE SUPPLIER TO
PRODUCER, TO WAREHOUSE, TO RETAILERS AND TO END USERS.

SUPPLY CHAIN MANAGEMENT SUPPORTS ALL ASPECTS RELATED TO

PURCHASING, PRODUCTION AND DISTRIBUTION OF GOODS. A SUPPLY CHAIN
PARTNER CAN ENSURE SMOOTH AND EFFICIENT OPERATIONS BY REDUCING
COSTS AND DELIVERING VALUE TO THE CUSTOMERS.

20
 1.3. Benefits from SCM for business

• Type of business firm that can be benefits from Supply Chain

Management: Manufacturing firms, retailers, transportation
companies, third party logistics firms and services firm, etc.
• Top business organizations that heavily reply on Supply Chain include
FMCG companies (Fast moving consumer goods), producers and
merchants of consumer durable products, the automotive industry, e-
commerce companies and retail firms.
• Supply chain management does not look the same all business firm
and it varies according to the nature, objectives, limitations and
strengths of each business.

21
• Manufacturing business organizations are among the most significant in
the field of SCM, because supply chains start with the manufacturing
process and end with getting the products into hands of customers.
• Supply Chain Management is the process that starts with the extraction
of raw materials and ends with guaranteeing to get the final/finished
goods and delivering the same to the right customer in the right
quantity and at the right time.
• Supply Chain Management controls the development of raw materials
into finished goods that move from the supplier to producer, to
warehouse, to retailers and to end users.

22
 1.3. Benefits from SCM for business

Advantages of Supply Chain Management

• Strong supply chains enable business organizations to respond to issues
more rapidly and carry on with order fulfilment even under challenging
circumstances.
• Businesses can establish enduring relationships with their customers and
retain a strong image in the industry by using effective supply chain
management.
• Inventory management, a function of supply chain management can be
used to control the cost of manufacturing, transportation and storing of
goods.
• Effective supply chain systems can increase a manufacturing unit's
productivity and output by maximizing resource utilization.

23
• Supply chain management solutions enable the business
organizations to select the finest suppliers and make strategic choices
in this area.
• Effective supply chain management systems enable business firms to
increase business revenue.
• Effective Supply Chain Management systems help business firms to
grow their business.
• Effective supply chain management systems help business firms to
reduce the costs of transportation, collection, and other supply chain
components, which would benefit the profitability of the individual
businesses.

24
1.4 Steps to adjust SCM to suit the enterprise

Importance of Supply Chain Management

• Wal-Mart, superior design, planning, & operation of SC, $1 billion sales in 1980 →
$408 billion in 2010
• Seven-Eleven Japan, highly responsive replenishment, ¥1 billion sales in 1974 → ¥3
trillion in 2009
• Webvan, delivering groceries to your home, turned inventory (marginally) faster than
supermarkets, but much higher transportation cost, folded in two years
• Borders, failure to adapt to compete with Amazon, $4 billion sales in 2004 → $2.8
billion in 2009
• Dell, direct sales model, rapid & low-cost customization

25
 Supply Chain Drivers
“Increase throughput 1. 2.
PRODUCTION INVENTORY
while simultaneously What, how, and How much to
reducing inventory when to produce make, how much
and operating to stock

expense.”
5.
Goldratt, The Goal, INFORMATION
Basis for making
these decisions

Responsiveness 4.
TRANSPORTATION
3.
LOCATION
vs. How and when to Where best to do
move product what activity
Efficiency

26
 Responsiveness vs. Efficiency
Supply Chain Drivers
Responsiveness Efficiency
1. Production - Excess capacity - No excess capacity
- Flexible manufacturing - Narrow product focus
- Many smaller plans - Few large plans
2. Inventory - High inventory levels - Low inventory levels
- Wide range of items - Narrow range of items

3. Location - Many locations close - Few central locations serve

to customers wide areas

4. Transportation - Frequent small shipments - Few large shipments

- Fast & Flexible modes - Slower and cheaper modes

5. Information - Collect & share timely - Cost of information drops

and accurate data while other costs rise

27
28
Different types of Vertical Integration strategies

29
 Old Supply Chains vs New

• VERTICAL
INTEGRATION
• has given way to
“VIRTUAL INTEGRATION”

Companies now focus on their

core competencies, and partner
with other companies to create
supply chains for fast moving
markets.

30
Make to order (MTO)?
Push vs Pull Strategy?
Lean Supply Chain strategy?
Agile supply chain strategy?

31
32
• Lean Supply Chain Management is a philosophy that
champions waste reduction and process simplification.

• Agile supply chain strategy: Focuses on flexibility and

responsiveness to changes in demand or market
conditions. It allows organizations to quickly adapt to
changing circumstances by being able to make quick
decisions, change production processes, and quickly
move products to different locations.

33
34
35
• Demand-driven Supply Chain Strategy?
• Leagile Supply Chain Strategy?

36
Adjust Supply Chain Management
1. Assessment 2. Define 3. Alignment
4. Optimize 5. Technology
of Current Strategic with Business
Processes Integration
State Objectives Strategy

6. 9. Data 10.
7. Risk 8. Talent
Collaboration Analytics and Performance
Management Development
with Partners Visibility Monitoring

11. Customer- 13.

12. Regulatory
Centric Continuous
Compliance
Approach Improvement

37
 1.5 Members in SCM

Suppliers
Manufacturers/Producers
Distributors/Wholesalers
Retailers
Customers/Consumers
Services Providers

38
1.6 Processes
in SCM

39
 • Planning
The components in the supply • Sourcing
chain management process are • Manufacturing
• Distribution & Delivery
as follows: • Returning.

40
 PLANNING:

• The planning phase is the first step

in the supply chain management
process.
• The business organisation must
develop or come up with a strategy
to address how its products can
satisfy customers' needs, demands
and desires.
• Making a plan that will boost sales
or maximise profit should be the
major objective of planning at this
point.

41
 SOURCING:

• Planning is followed by sourcing.

• At this phase, the primary focus of the business firm will
be on building strong working relationships with the raw
material suppliers needed for the production of their
finished/final products.
• • This requires selecting reliable suppliers and various
planning strategies for shipping, delivery, and payment of
raw materials (by monitoring its inventory) necessary for
the production of their finished/final products.

42
 MANUFACTURING:
• Manufacturing is the third phase of the supply chain management process.
• Here the business organisation takes the necessary steps towards the
manufacturing process of their final /finished products that were needed /demanded
by the customers.
• Thereafter final /finished products are tested for quality, then packaged and
arranged for delivery.

43
DISTRIBUTION & DELIVERY:

• The fourth phase in the supply chain management process is

distribution and delivery phase.
• Here, the business firm arranges to deliver the final /finished products to
the customers at the destined locations.
• In essence, this step is the logistics phase, during which customer
orders are accepted and product deliveries are scheduled by using a
network of warehouses and delivery locations along with the
development of a system for issuing invoices and collecting payments
for the delivered goods.

44
DISTRIBUTION & DELIVERY:
• TO ENSURE PROMPT PRODUCT
DELIVERY, IT IS ALSO VITAL TO DECIDE
ON THE TRANSPORT ROUTES DURING
THIS PHASE.
• TO HANDLE ALL FACETS OF
TRANSPORTATION, SHIPPING, AND
DELIVERY, MANY BUSINESS
ORGANIZATIONS ENTER INTO
AGREEMENTS WITH OUTSIDE
SERVICE PROVIDERS. 45
 RETURNING:

• This is the last and final phase of supply chain management process.
• This marks the conclusion of the supply chain management process.
• In this phase, buyers return damaged or defective goods to the sellers /suppliers.
Companies/business firms in this situation need to establish a 'return procedure'
and need to handle customer inquiries and complaints, etc.

46
 1.7 SCM coordination work

1. Information Sharing: Effective information sharing between different stages of the supply chain helps in
better decision making and reduces uncertainty.
2. Communication: Effective communication between suppliers, manufacturers, distributors, and customers is
crucial for successful coordination of the supply chain.
3. Collaboration: Collaboration between different stages of the supply chain can lead to increased efficiency,
improved quality, and reduced costs.
4. Inventory Management: Coordination of inventory levels between different stages of the supply chain helps
to balance the trade-off between inventory costs and stockouts.
5. Transportation Management: Coordination of transportation activities, such as routing and scheduling,
helps to optimize transportation costs and improve delivery times.
6. Performance Management: Performance metrics and targets should be established and monitored to
evaluate the performance of the supply chain and identify areas for improvement.
7. Contract Management: Contracts between different stages of the supply chain should be effectively
managed to ensure that all parties meet their obligations.
47
 The coordination process in Supply Chain
Management (SCM) involves

1. PLANNING: THE 2. MONITORING: ONCE 3. COMMUNICATION: 4. COLLABORATION: 5. PROBLEM SOLVING: 6. CONTINUOUS

FIRST STEP IN THE PLAN IS IN PLACE, EFFECTIVE COLLABORATION WHEN PROBLEMS IMPROVEMENT: THE
COORDINATION IS TO IT IS IMPORTANT TO COMMUNICATION IS BETWEEN DIFFERENT ARISE, IT IS COORDINATION
CREATE A CONTINUOUSLY KEY TO STAGES OF THE IMPORTANT TO WORK PROCESS SHOULD BE
COMPREHENSIVE MONITOR THE COORDINATION. THIS SUPPLY CHAIN IS TOGETHER TO FIND CONTINUOUSLY
PLAN FOR THE ENTIRE PERFORMANCE OF INCLUDES REGULAR CRUCIAL TO ENSURE SOLUTIONS THAT ARE REVIEWED AND
SUPPLY CHAIN. THIS THE SUPPLY CHAIN TO UPDATES ON THAT EVERYONE IS IN THE BEST IMPROVED TO ENSURE
PLAN SHOULD TAKE ENSURE THAT IT IS PERFORMANCE, AS WORKING TOGETHER INTERESTS OF THE THAT THE SUPPLY
INTO ACCOUNT THE MEETING THE WELL AS SHARING TOWARDS COMMON ENTIRE SUPPLY CHAIN IS OPERATING
NEEDS AND ESTABLISHED GOALS INFORMATION ON GOALS. THIS CAN CHAIN. THIS CAN AS EFFICIENTLY AND
CAPACITIES OF EACH AND OBJECTIVES. POTENTIAL INVOLVE JOINT INVOLVE CHANGES TO EFFECTIVELY AS
STAGE OF THE PROBLEMS OR PLANNING, PROBLEM PROCESSES, POSSIBLE. THIS MAY
SUPPLY CHAIN, AS CHANGES THAT SOLVING, AND PRODUCTS, OR INVOLVE CHANGES TO
WELL AS THE COULD IMPACT THE DECISION MAKING. DELIVERY PROCESSES,
OVERALL GOALS OF SUPPLY CHAIN. SCHEDULES. TECHNOLOGY, OR THE
THE ORGANIZATION. STRUCTURE OF THE
SUPPLY CHAIN ITSELF.

48
 Supply Chain Management is
1.8 Future management of the flow of goods, data,
and finances related to a product or
of SCM service, from the procurement of raw
materials to the delivery of the product
at its final destination. Although many
people equate the supply chain with
logistics, logistics is actually just one
component of the supply chain.

Today’s digitally based Supply Chain Management systems include material handling and software for all
parties involved in product or service creation, order fulfillment, and information tracking such as suppliers,
manufacturers, wholesalers, transportation and logistics providers, and retailers. Supply chain activities span
procurement, product lifecycle management, supply chain planning. Supply Chain Management can also
extend to the activities around global trade, such as the management of global suppliers and multinational
production processes.
49
The Evolution of Supply Chain Management
50
TECHNOLOGY
• Block Chain ?
https://www.youtube.com/watch?
v=jMihd-gqb6I

• AI ?

• Drones?
https://www.youtube.com/watch?
v=mzhvR4wm__M

51
 TRENDS?
• Green supply chain management (GSCM) involves
sustainable environmental processes built into
conventional supply chains — from
manufacturing to operations to end-of-life
management — incorporating the principle of
4R1D (reduce, reuse, recycle, reclaim and
degradable).
• A sustainable supply chain is one that fully
integrates ethical and environmentally
responsible practices into a competitive and
successful model. End-to-end supply chain
transparency is critical; sustainability initiatives
must extend from raw materials sourcing, to last-
mile logistics, and even to product returns and
recycling processes.

52
JOB OPPORTUNITIES?
53
Thi s Photo by Unknown Author is licensed under CC BY-SA-NC