LOGISTICS AND SUPPLY CHAIN

MANAGEMENT
19MBA4003(M1)

MRS.V.MADHU LATHA
ASSISTANT PROFESSOR
DEPARTMENT OF BUSINESS MANAGEMENT
VR SIDDHARTHA ENGINEERING COLLEGE
 LOGISTICS

 Logistics refers to the movement of materials within a production facility

 The shipment of incoming materials from suppliers and the shipment of outgoing materials/ products to
customers

 Materials include all the physical items used in the production process such as raw materials, parts, components,
Fuel, equipment's, tools, office supplies and so on

Definition:
Logistics is defined as the process of anticipating customer needs and wants, acquiring the capital,
materials, people, technologies and information necessary to meet needs and wants.
 Logistics Management

Logistics Management is a part of supply chain management that plans, implements and controls the efficient and
effective flow of goods and services and related information between point of origin to the point of consumption in
order to meet Customer requirement.
 Significance of Logistics Management:

 Cost Reduction and profit maximization

 Efficient flow of manufacturing Operations

 Competitive Edge

 Effective communication System

 Sound Inventory Management

Competitive advantage:
An advantage that a firm has over its competitors , allowing it to generate greater sales or margins and/or
retain More customers than its competitors.

Gaining Competitive advantage through Logistics:

Building Blocks of Competitive
Advantage
Quality

Competitive Customer
Efficiency Advantage Responsivenes
 Low cost
s
 Differentiation

Innovation
Integrated Supply Chain
A supply chain is a dynamic in nature and involves the constant flow of information , product and funds between stages.
A typical supply chain may involve several stages. They are:

 Customers
 Retailers
 Wholesalers/ Distributors
 manufacturers and
 Component/ raw materials / parts suppliers

The integrated supply chain delivers value to the customer by achieving leading-edge performance in responsiveness,
preferred supplier and Convenience of doing business with high degree of cooperation among supply chain partners

 Basic objective of an integrated supply chain is to achieve integration of all supply chain processes across functional
boundaries through “ Real – time” order Management from “order entry” stage to the “ billing” stage and ensure a
smooth flow of both products and services from one end to another
Supply chain and Competitive Performance:

The stages in the Evolution of Supply chain are

• Baseline
• Functional Integration
• Internal Integration and
• External Integration

Firms which wanted to remain in business and grow had to improve the “value” of their products and
services.
STAGE 1: Baseline
Material Flow Customer
Service

Purchasing Material Control Production Sales Distributor

STAGE 2: Functional Integration

Material Flow Customer
Service

Materials Manufacturing Distribution

Management Management Management
STAGE 3: Internal Integration(Logistics Management)
Customer
Material Flow Service

Materials Manufacturing Distribution

Management Management Management

STAGE 4: External Integration(Supply Chain Management)

Internal Supply
Suppliers Customers
chain
Focus Areas in Supply Chain Management

Supply
Change
Chain
Drivers
Drivers
Supply Chain Drivers: Change Drivers:

 Production  The Empowerment of

 Inventory consumer
 Transportation  Shift of power in the supply
 Facility Location chain
 Information  Liberalisation of economic
 Sourcing and policies
 Pricing  Globalisation of business
 Technological developments
or advancements
 Customer Satisfaction:
Customer satisfaction is defined as a measurement that determines how happy customers are
with a company's products, services, and capabilities.

Perceived Customer
Performance < Customer Expected
= Dissatisfaction

Strategy of using logistics competency to gain competitive advantage is based on a broad commitment to
consumer – focused marketing.
 When a customers transact business with a supplier, they have expectations regarding
 Availability
 operational performance and
 service Reliability

Customer success:

Customer success shifts the focus from customer expectations to customers real requirements.