Dr. Mary Collins Holcomb Associate Professor November 16th and 18th, 1999. Fundamentals of Logistics and Supply Chain Management. Agenda. The Role of Logistics Integrated Logistics Management Information Management Implementing Logistics Strategy Supply Chain Management
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November 16th and 18th, 1999
“That part of supply chain management which deals with the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.”
-- Council of Logistics Management
Tangible goods still have to move (and be stocked) through space and time. . . new strategies and methods must create new value.
logistics Cost Components
Inventory Carrying Cost 19.2%
Order Processing 6.5%
Source: Herbert W. Davis & Co.
Transportation costs comprise the single largest element in most physical distribution systems
3rd Party Service
Excellence in distribution & transportation adds value at all levels.
To improve deployment & management of assets . . .
capital expenditures by
improving usage of fixed assets
1. Rationalize distribution networks
2. Outsource select processes
3. Explore shared facilities
4. Understand supply chain tax implications
5. Consolidate warehouses
6. Replace inventories with information
7. Reduce distribution cycle time
8. Implement demand-driven planning
working capital by minimizing inventories
Pressure to reduce cost and improve service
Several different approaches may be used to measure the functional performance of logistics:
Firms evaluate logistics managers primarily on the basis of three factors:
Cisco Systems, USA Today, Sept. 23, 1998
If logistics managers do not understand corporate strategy, they will not be able to make decisions that are in the best interest of the organization.
Strategic Tactical Operational
What is the organization’s overall customer service strategy and what should it be?
What are the best opportunities for cost reduction in the organization’s logistics system?
What are the core competencies of the logistics function, I.e. which activities should be outsourced?
The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage, through to the end user, as well as the associated information flows.
Focus on quality
Serve our customers
Drive business efficiency
Create market value
Be a market leader!