LOGISTICS

&
MANAGEMENT
CONTROL
Basic Concepts
S. IDDIK
Maître de Conférences
FSJES, Ait Melloul.
2023-2024
Course presentation

• Course Title : Fundamentals of Logistics and Control Management

• Instructor : Pr. Sadia IDDIk
• Office Hours: Friday– 8:30 am to 10:30 am
• Course Format: Seminar type
Course Content

• Chapter 1. An introduction to logistics and SCM

• Chapter 2. Audit Logistics
• Chapter 3. ISO management systems for Logistics
• Chapter 4. Outbound Inbound Logistics
• Chapter 5. Production Planning and Control
• Chapter 6. Warehousing inventory and control
• Chapter 7. Audit of transportation
• Chapter 8. Supply Chain Risk Assessment
• Chapter 9. Logistics Performance
• Chapter 10. SCOR ASLOG
Our Classroom Rules

1. Come on time
2. Prepare for class
3. Eyes on board
4. Be respectful and kind
5. Share with others
6. Raise your hand to speak
7. Listen when others talk
8. Be an active participant
Course Objectives

• To provide an understanding of differences between logistics and SCM,

• To describe the increasing significance of logistics and its impact in
business,
• To incorporate and learn new terms and critical elements of logistics
and Supply chain management,
• To understand the impact of logistics functions and their integration
with other business functions,
• To provide an understanding of tools and techniques useful in SCM
implementation.
Today’s content

1.
Logistics
2. SCM
3. Supply
Chain
 CHAPTER 1.
AN INTRODUCTION TO
LOGISTICS
 Question 1

The concept of Logistics may sound complicated, but it really isn’t. try
to define Logistics based on your Knowledge.
 Question 2

Amine is in charge of logistics management within a specific company,

in your opinion, what are the tasks that Amine is in charge of ?
Definitions of Logistics
DEFINING LOGISTICS
• Art and science of obtaining, producing, and distributing material and
products in proper place and in proper quantities.

• Logistics is the transport, storage and handling of materials from point

of origin to point of destination and final consumption (McKinnon,
Browne, Whiteing, & Piecyk, 2015:3).
DEFINING LOGISTICS

“as the process of planning, implementing and controlling the

efficient, cost effective flow and storage of raw materials, in
process inventory, finished goods and related information from
point of origin to point of consumption for the purpose of
conforming to customers’ requirements”.
American Council of Logistics Management.
LOGISTICS’ 7 RIGHTS

Logistics refers to the process

of sending the right product
in the right conditions &
quantity at the right cost to
the right customer at the
right place and time (7R).
Historical development of
Logistics
 ORIGIN OF LOGISTICS

The concept of logistics started many years ago in order to

describe all the procedures for the army’s procurement on food,
clothing ammunition, etc.
Ancient Roman and Greek wars are the basis for today's logistics
systems. Rome developed a highly efficient logistic system to
supply its legions. Military officers called “logistikas” were
responsible for ensuring the supply and allocation of resources,
so that soldiers could move forward efficiently.
 ORIGIN OF LOGISTICS

The logistics was defined in the military as

“the discipline of planning and carrying out the movement,
supply, and maintenance of military forces”.

Starting from the 60s, many factors such as : competitive

pressures, information technology, globalization, contributed to
the increase of logistics science in the form we know it today.
HISTORICAL DEVELOPMENT OF LOGISTICS

• Around 2700 B.C:

Since the construction of the pyramids in
ancient Egypt, the material handling and
blocks of stone transported and assembled
in the construction site.
 HISTORICAL DEVELOPMENT OF LOGISTICS

• Around A.D. 700 :

Construction of the famous Mezquita
Mosque in Cordoba, Spain, began in 756
under the Caliph of Cordoba in the
Umayyad dynasty. It is considered to be the
largest mosque in Europe. Extraordinary
procurement logistics was required to
transport the pillars of the mosque from all
parts of the Islamic empire.
HISTORICAL DEVELOPMENT OF LOGISTICS

• Around 1940:
Military logistics during the world
wars – transfer of military logistics
concepts to the business world.
 HISTORICAL DEVELOPMENT OF LOGISTICS
• 1956:
Invention of the sea container by
Malcolm McLean is considered a
major turning point in global trade.
– a structural evolution of world
trade and the boom of international
flows of goods.
HISTORICAL DEVELOPMENT OF LOGISTICS

• Around 1970 – 1980:

Kanban and just-in-time – logistics
concepts with a special emphasis on
procurement.
 HISTORICAL DEVELOPMENT OF LOGISTICS
• Today:
• Supply chain management – a look
at the entire logistics chain from
the vendor’s supplier to the end
customer.
• Advancing globalization – efficient
logistics as a competitive edge in
the era of globalization.
Scope of Logistics
SCOPE OF LOGISTICS
• The goal of logistics is to meet customer requirements by
Seven R’s

• Right product
• Right quantity
• Right conditions
• Right place
• Right time
• Right customer
• Right price
SCOPE OF LOGISTICS

1. Achieve maximum customer service level

2. Ensure high product quality
3. Achieve minimum cost
4. Be flexible in the constant market changes
Logistics Flows
LOGISTICS FLOWS
 Different flows in Supply Chains

Products: Includes raw Information: Includes

materials, work-in-progress orders, deliveries, marketing
(WIP), sub-assemblies, and promotions, plant capacities,
finished goods. inventory, and so on,

Funds: Includes invoices,

payments, and credits.
Flow of physical products
Supply chains typically involve the movement of physical products from raw
materials to finished goods to the end customer. This flow can be complex
and involve a number of different stages, such as:
• Sourcing: This involves obtaining the raw materials that will be used to
create the finished product.
• Manufacturing: This involves transforming the raw materials into the
finished product.
• Distribution: This involves getting the finished product to the customer.
• Sales: This involves selling the finished product to the customer.
• Customer service: This involves providing support to the customer after
they have purchased the product.
 These stages can be further broken down into
sub-processes, and there may be some variation
depending on the specific industry.
For example, a company that manufactures
clothing might have a different supply chain than
a company that manufactures electronics.
The flow of physical products can be affected by a number of
factors, including:
• Supply and demand: If there is a high demand for a product, there may be
pressure to increase production. This can put a strain on the supply chain and
lead to shortages.
• Transportation costs: The cost of transporting goods can have a significant impact
on the overall cost of the product. Companies are constantly looking for ways to
optimize their transportation networks in order to reduce costs.
• Government regulations: Government regulations can affect the flow of physical
products in a number of ways. For example, there may be regulations on the
import and export of goods, or on the safety of products.
• Natural disasters: Natural disasters can disrupt the flow of physical products by
damaging infrastructure or making it difficult to transport goods.
 By understanding the flow of physical
products, businesses can improve their
efficiency and profitability. They can also
identify and mitigate potential risks in their
supply chains.
Mainly,
The flows of materials, products, inventories, and other
goods in logistics networks, are referred to as physical
flows, the main direction of which is considered to be
from the point of origin to the point of consumption.
However, physical flows also include the backward or
reverse flows of materials; therefore, they involve the
entire process and activities of logistics systems.
FLOW OF INFORMATIONS
The flow of information in a supply chain is crucial for
its efficient and successful operation. It facilitates
coordination, collaboration, and decision-making
among various stakeholders involved, from suppliers to
customers. Here's a breakdown of this vital flow:
1. Upstream Information Flow:
• From Suppliers: Suppliers provide information about:
• Product specifications: This includes details like materials, dimensions, and
functionalities.
• Pricing and quotes: Suppliers submit quotes based on the product
specifications and other factors.
• Production capacity and lead times: Suppliers inform about their ability to
meet production demands and timelines.
• Inventory levels: This allows companies to plan their own production and
stock accordingly.
• Delivery schedules: Suppliers communicate expected delivery times to ensure
timely receipt of goods.
2. Internal Information Flow:
• Within the company:
• Purchase orders: Companies send purchase orders to suppliers once they
decide to procure materials or products.
• Production planning and scheduling: Information about production
schedules, order fulfillment, and resource allocation flows across
departments.
• Inventory management: Data on stock levels, stock movements, and reorder
points is used for inventory management.
• Quality control: Information about quality checks and defects is shared to
maintain product quality and address issues.
3. Downstream Information Flow:
• To Customers:

• Order confirmation and tracking: Customers receive confirmation of their

orders and shipment tracking information.
• Product information and updates: Information about product manuals,
warranties, and updates are provided to customers.
• Invoice and payment information: Customers receive invoices for their
purchases and information about payment options.
By ensuring a smooth and efficient flow of information,
businesses can:
• Improve coordination and collaboration: Information transparency helps
different stakeholders stay informed and aligned, leading to better planning
and execution.
• Enhance decision-making: Real-time data and accurate information enable
data-driven decisions for optimizing inventory levels, production schedules,
and resource allocation.
• Increase efficiency and reduce costs: Streamlined information flow
reduces errors and delays, leading to improved efficiency and cost savings.
• Improve customer satisfaction: Timely and accurate communication with
customers regarding orders, deliveries, and product information enhances
customer experience.
FLOW OF FINANCIAL
The flow of financials in a supply chain refers to the movement of
money throughout the different stages, from the initial purchase of raw
materials to the final sale of the finished product to the customer.

This flow ensures smooth operations and facilitates essential financial

transactions between various stakeholders. Here's a breakdown of this
process:
1. Upstream Financial Flow:
• From the company to suppliers:

• Payments for raw materials and services: The company pays suppliers for the
materials, components, and services they provide. This can involve various
methods like cash on delivery, advance payments, or credit terms based on
established agreements.
• Letters of credit: In international trade, letters of credit can be used to ensure
financial security for both parties.
2. Internal Financial Flow:
• Within the company:

• Internal costs: The company incurs various internal costs like production costs
(labor, materials, overheads), transportation costs, and storage costs.
• Inventory financing: The company may need to finance the cost of holding
inventory before it can be sold.
3. Downstream Financial Flow:
• From customers to the company:

• Customer payments: Customers pay for the finished goods or services they
purchase. This can happen through various methods like cash, credit cards, or
electronic payments.
• Receivables management: The company manages outstanding customer
payments (accounts receivable) to ensure timely collection and maintain a
healthy cash flow.
By understanding and managing the financial flow
effectively, companies can achieve:
• Improved financial health: Efficient cash flow management and timely
payments contribute to a company's financial stability and
creditworthiness.
• Reduced financial risks: Managing credit risks, utilizing appropriate
financial instruments, and maintaining healthy working capital helps
mitigate financial risks.
• Enhanced profitability: Streamlined financial processes and optimized
inventory financing can lead to improved profitability and cost savings.
• Stronger relationships with suppliers and customers: Timely payments
and transparent financial practices build trust and foster strong
relationships with both parties.
Logistics Components
LOGISTICS COMPONENTS

• Transportation,
• Storage and Warehousing,
• Inventory,
• Packaging,
• Procurement
• Reverse logistics,
Logistics Taxonomies
Logistics Three main Phases:

• Inbound Logistics:
• Procurement from suppliers
• Movement of raw materials,
• Process Logistics:
• Operations directly related to processing,
• Manufacturing,
• Outbound Logistics:
• Warehousing,
• Transportation,
• Inventory management of finished goods,
Logistics Three main Phases:
 Inbound logistics
• Outbound logistics is concerned with the
movement of finished goods from the
manufacturing units/organizations to the
end users.

• Inbound logistics is associated with the

movement of products (raw materials) from
the suppliers to the manufacturing units to
facilitate the manufacturing of finished
good,
Outbound logistics
 Chapter 2.
Supply Chain
Management
Supply chain management is
a wider concept than
logistics
SCM
The definition of supply chain management adopted in his book is:
“The management of upstream and downstream relationships
with suppliers and customers in order to deliver superior customer
value at less cost to the supply chain as a whole”.

• Martin Christopher, “Logistics and supply chain management”

Evolution of Supply Chain Management
 The objective of Supply Chain
Management

is to be efficient and cost-effective through

collaborative efforts across the entire system;

To be efficient, To be effective,

Efficiency is defined as the ability to Effectiveness is about doing the

accomplish something with the least right task, completing activities
amount of wasted time, money, and and achieving goals.
effort or competency in performance.

>> how well something is done. >> how useful something is.
The role of Supply Chain Management

is to produce products that conform to

customer requirements,
 The Levels of Supply Chain Management

Encompass the activities

from the strategic level
through the tactical and
operational levels, it takes the
efficient integration of suppliers,
manufacturers, wholesalers,
logistics providers, retailers, and
end users.
An effective logistics and supply chain management can
provide a major source of competitive advantage
 Competitive advantage

- Low cost, - Differentiate offer

- Economies of scale, - High performance

Cost Value Chain

advantage
 Competitive advantage cannot be understood by looking at a firm as a whole.

It stems from the many

discrete activities a
firm performs,

Like : designing,
producing,
marketing, delivering,
and supporting its
product.
The Value Chain of M. Porter
 Chapter 3.
Supply Chain
Supply chain
“A network of connected and interdependent
organizations mutually and co-operatively working
together to control, manage and improve the flow
of materials and information from suppliers to end
users”.

• Martin Christopher, “Logistics and supply chain

management
Supply Chain Enablers:
Human Resource Management

People

Organization Technology

Organizational infrastructure Information technologies

• 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.
 According to the Council of Supply Chain Management Professionals
• Supply chain management,
encompasses the planning and
management of all activities
involved in sourcing and
procurement, conversion, and all
logistics management activities.
Importantly, it also includes
coordination and collaboration
with channel partners, which can
be suppliers, intermediaries, third
party service providers, and
customers. In essence, supply
chain management integrates
supply and demand management
within and across companies.
 To sum up
By the definition, Logistics refers to the process
of sending the right product in the right
conditions & quantity at the right cost to the
right customer at the right place and time (7R).

Supply Chain, on the other hand, refers to a

network of organizations, people, resources,
activities, and technology that is used to deliver a
product from the manufacturing units to the end
users.

Logistics include the activities that take place in an

organization while Supply Chain includes a network of
companies/people who coordinate together in
delivering the product.