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John Ozment Oren Harris Chair of Transportation University of Arkansas (479) 575-6142 (479) 521-3355 jozment@walton.uark PowerPoint Presentation
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John Ozment Oren Harris Chair of Transportation University of Arkansas (479) 575-6142 (479) 521-3355 jozment@walton.uark - PowerPoint PPT Presentation


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John Ozment Oren Harris Chair of Transportation University of Arkansas (479) 575-6142 (479) 521-3355 jozment@walton.uark.edu. Definition of Business Logistics. Logistics is that part of the supply chain process that

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Presentation Transcript
slide1

John Ozment

Oren Harris Chair of Transportation

University of Arkansas

(479) 575-6142

(479) 521-3355

jozment@walton.uark.edu

slide2

Definition of Business Logistics

Logistics is that part of the supply chain process 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 (CLM).

Coordination of Activities

Flow of Goods

Minimum Cost

Desired Level of Service

slide3

Activities To Coordinate

Customer Service

Order Processing

Traffic & Transportation

Warehousing

Materials Handling

Packaging

Inventory Control

Purchasing

Production Scheduling

Forecasting

Location Analysis

Communications

slide4

(Purchasing)

(Operations)

(Marketing)

Suppliers

Firm

Customers

C

C

C

C

C

S

S

S

S

S

Production

Processing

Repackaging

Logistics

Flow of Goods

slide5

Total Cost Approach

Consider Total "Relevant" Costs

Take Advantage of Cost Trade-Offs

Avoid Suboptimization

slide6

President

VP

Marketing

VP

Operations

VP

Finance

Bookkeeping

Capital Budgeting

Financial Management

Etc.

Sales

Advertising

Marketing Research

Etc.

Machine Shops

Welding Shops

Assembly Lines

Etc.

Traditional Organization Chart

slide7

President

VP

Marketing

VP

Operations

VP

Finance

Bookkeeping

Capital Budgeting

Financial Management

Etc.

Sales

Advertising

Marketing Research

Etc.

Machine Shops

Welding Shops

Assembly Lines

Etc.

Traditional Organization Chart

Customer Service

Part of Order Processing

Field Whsing

Location Analyses

Traffic

Scheduling

Raw Materials Whsing

Packaging/Handling

Part of Order Process

Inventory

Forecasting

Communications

slide8

Development of Business Logistics

Military Experience

Development of the Marketing Concept

Proliferation of Products

Rising Transportation Costs

Technological Peak

Knowledge of Inventory

Recession of 1958

Development of the Computer

Creative Uses of the Computer

slide9

Educational Focus on Logistics

Harvard Air Freight Study (1956)

Bowersox's Textbook (1961)

CLM (1963)

Organizational Name Changes

Supply Chain Management

slide10

Harvard Air Freight Study

Knowledge of Inventory Carrying Costs

Application of Pareto’s Law

Focus on Total Costs/Cost Trade-offs

Use of Premium Transportation

slide11

Harvard Air Freight Study

Knowledge of Inventory Carrying Costs

Application of Pareto’s Law

Focus on Total Costs/Cost Trade-offs

Use of Premium Transportation

slide12

Elements of Inventory Carrying Costs

Interest and Opportunity Cost 10-20 %

Storage and Handling 8-14 %

Depreciation and Obsolescence 6-12 %

Insurance and Taxes 2 -3 %

Total 25-50 %

slide13

Harvard Air Freight Study

Knowledge of Inventory Carrying Costs

Application of Pareto’s Law

Focus on Total Costs/Cost Trade-offs

Use of Premium Transportation

slide14

Percent

of Sales

100

95

80

A

B

C

50

20

100

Percent of Items

ABC Analysis

slide15

Harvard Air Freight Study

Knowledge of Inventory Carrying Costs

Application of Pareto’s Law

Focus on Total Costs/Cost Trade-offs

Use of Premium Transportation

slide16

Focus on Total Costs/Cost Trade-offs

Savings from Inventory Consolidation

vs

Added Transportation Costs

slide17

Harvard Air Freight Study

Knowledge of Inventory Carrying Costs

Application of Pareto’s Law

Focus on Total Costs/Cost Trade-offs

Use of Premium Transportation

slide18

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