Professional Documents
Culture Documents
Supply Chin Management
Supply Chin Management
Supply Chin Management
Logistics in SCM
Macro Perspective
Logistics impacts and has relationship with economy Cost of business logistics increasing Percentage of GDP decreasing Transportation largest percentage of logistics costs (rising due to inventory management practices)
Macro Perspective
Logistics adds value to a product Place utility - moving goods to points where demand exists Time utility - moving goods to points at a specific time Allows for economic development and specialization Affects land values due to increased accessibility
Micro Perspective
Interfaces with production in determining the length of the production run Interfaces with marketing in selling the product
price - size, quantity product - dimensions, packaging promotion - inventory, channels customer service
Balanced System Heavy Inbound Ex Boeing aircraft Heavy Outbound Ex Crude oil Reverse Systems Ex Ink catridges in HP printers Trade offs
Cost centers
Nodes versus links nodes - points where goods stop for processing links - transportation connecting nodes Logistics Channels - network of intermediaries that contribute to efficient flow of goods
System - is a set of interacting elements, variables, parts or objects that are functionally related to one another and that form a coherent group. Optimization always the best alternative (water transportation example) Level 1: organization Contain marketing, finance, production Level 2 supply chain Contain customers and other channel partners Level 3: Environment Contain social ,political and economic
Order Cycle
shorter order cycle, less inventory required more substitutable product, higher customer service level required increase inventory, reduce cost of lost sales increase transportation costs, reduce cost of lost sales
Substitution
Inventory Effect
Transportation Effect
Product factors Dollar Value - product value increases, cost of warehousing, transportation and inventory increases Density- higher the density, more efficient use of warehouse and transportation space Damage -greater the risk of damage, higher the transportation and warehousing cost Special Handling Requirments