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BA 308B and LOM 408B/5330 Business Logistics Systems Course Home Page: www.umsl.edu/~campbell/308B/308BSYL_W03.htm www.umsl.edu/~campbell/308B/408BSYL_W03.htm James Campbell’s home page with link to BA 308B and LOM 408B/5330: www.umsl.edu/~campbell Chapter 1: Introduction

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ba 308b and lom 408b 5330 business logistics systems
BA 308B and LOM 408B/5330Business Logistics Systems
  • Course Home Page:

www.umsl.edu/~campbell/308B/308BSYL_W03.htm

www.umsl.edu/~campbell/308B/408BSYL_W03.htm

  • James Campbell’s home page with link to BA 308B and LOM 408B/5330:

www.umsl.edu/~campbell

chapter 1 introduction
Chapter 1: Introduction
  • Syllabus.
  • Definitions.
  • Scope of logistics.
  • Activities.
  • Key Trends.
definitions
Definitions
  • 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)
  • Supply Chain Management - the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. (CLM)
  • Logistics - Science of managing (controlling) the movement and storage of goods (or people) from acquisition to consumption.
definition
Definition
  • Logistics - Science of managing the movement and storage of goods (or people) from acquisition to consumption.
  • NOT concerned with Production.
  • NOT concerned with Military Logistics.
    • Though many of same techniques and analyses are used for business and military logistics.
  • Goods: Raw Materials  Final products, and everything in between.
  • Logistics for services & people similar to goods logistics.
    • Police, fire, ambulance, passenger airlines, taxi cabs, etc.
definition5
Definition
  • Logistics - Science of managing the movement and storage of goods (or people) from acquisition to consumption.
  • Movement = Transportation (between locations).
  • Storage = Inventory, Warehousing (at locations).
  • Difference between acquisition and consumption is a matter of space and time.
  • Focus: Best way to overcome space and time that separates acquisition and consumption.
why things are where they are
Why Things Are Where They Are
  • Why is St. Louis here?
  • Why are New York, Los Angeles, etc. where they are?
  • Why are some things produced in certain places - and other things produced everywhere?
    • See book example with VCRs and software (p. 4)
  • Why are bananas for the USA grown in Central and South America, but oranges for the USA are grown in Florida and California?
bananas and oranges
Bananas and Oranges
  • Cost to grow (¢/lb) Bananas Oranges

in USA25 20

in Central America10 15

  • Logistics cost (¢/lb) to USA to Central America

from USA 10 15

from Central America 20 5

Consume Consume in

Bananas Total Cost in USA Central America

grow in USA 35 = 25 + 10 40 = 25 + 15

grow in Central America 30 = 10 + 20 15 = 10 + 5

Result: Grow bananas only in Central America

bananas and oranges9
Bananas and Oranges
  • Cost to grow (¢/lb) Bananas Oranges

in USA 25 20

in Central America 10 15

  • Logistics cost (¢/lb) to USA to Central America

from USA 10 15

from Central America 20 5

Consume Consume in

Oranges Total Cost in USA Central America

grow in USA 30 = 20 + 10 35 = 20 + 15

grow in Central America 35 = 15 + 20 20 = 15 + 5

Result: Grow oranges in both USA and Central America

inexpensive transportation and inventory
Inexpensive Transportation and Inventory
  • Inexpensive transportation:
    • Allows specialization in space.
    • De-couples supply and demand regions.
    • Increases availability and competition.
  • Inexpensive inventory/warehousing:
    • Allows specialization in time.
    • De-couples supply and demand in time.
    • Increases availability and competition.
scope of logistics
Scope of Logistics

Transportation

Transportation

Supply Production Consumption

Information

Information

Materials Management

Inbound

Physical Distribution

Outbound

served by 5 warehouses

SEA

CHI

NY

LA

ATL

...served by 5 Warehouses

Single stop and multi-stop routes

Retail Outlets

Warehouses

2 plants 5 warehouses

SEA

CHI

NY

LA

ATL

2 Plants, 5 Warehouses

P2

P1

Plants

Warehouses

outbound distribution system

SEA

CHI

NY

Retail Outlets

Plants

Warehouses

LA

ATL

Outbound Distribution System

2 Plants, 5 Warehouses, 52 Retail outlets

P2

P1

inbound distribution system

Plants

Warehouses

Plants

Supply Points

Sub-assembly plants

Inbound Distribution System

9 Suppliers, 3 Sub-assembly plants, 2 Plants

P2

P1

LA

total distribution system

SEA

CHI

NY

Retail Outlets

Plants

Warehouses

Supply Points

Sub-assembly plants

LA

ATL

Total Distribution System

9 Suppliers, 3 Sub-assembly plants, 2 Plants, 5 Warehouses, 52 Retail outlets

P2

P1

total distribution system18
Total Distribution System

9 Suppliers, 3 Sub-assembly plants, 2 Plants, 5 Warehouses, 52 Retail outlets

SEA

P1

CUSTOMERS

LA

CHI

ATL

P2

NY

logistics activities
Logistics Activities
  • Transportation - Chapter 6 & 7.
  • Inventory - Chapter 8, 10, 11, 12.
  • Location - Chapters 13 & 14.
  • Support Activities:
    • Customer service, order processing, packaging, warehousing, purchasing, materials management, information management.
key trends in logistics
Key Trends In Logistics
  • Supply chain integration.
  • Information technology.
  • Global markets and competition.
  • Quality emphasis.
  • Service industries.
  • Product variety.
  • Quick response.
  • Disruptions, shortages, inflation, recession.
  • Regulation.
  • Security.
importance
Importance: $$$
  • $1,000,000,000,000 per year
    • Spent on logistics in U.S.
    • 10.1% of U.S. GDP
  • Transportation 40 - 60%
  • Inventory 30 - 50%
  • Administration 0 - 5%