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Chapter Fourteen. Supply Chain and Logistics Management. Unlike real estate, location is becoming progressively less relevant. The three critical factors for the Internet age are logistics, logistics, logistics. - William B. Lipsin, CEO, Ironside Technologies. Objectives.

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chapter fourteen

Chapter Fourteen

Supply Chain and

Logistics Management

slide2

Unlike real estate, location is becoming progressively less relevant. The three critical factors for the Internet age are logistics, logistics, logistics. - William B. Lipsin, CEO, Ironside Technologies

objectives
Objectives
  • Describe key supply chain & logistical issues
  • Examine tradeoff between customer satisfaction & costs in distribution
  • Understand a total cost approach to distribution
  • Examine varied transportation modes
  • Identity elements of logistics management
  • Understand pervasive nature of materials management activities
definitions

In-process inventory

Component parts

& Raw material

Finished goods

Definitions

Logistics

Supply Chain

logistics
Logistics
  • Manage incoming parts & materials
  • Monitor stock, materials, inventory
  • Dispose of waste & by-products
  • Handle finished goods
  • Monitor distribution channel
competitive advantage in physical distribution
Competitive Advantage inPhysical Distribution
  • Reliable/faster delivery
  • Zero error order processing
  • Zero damage delivery
  • Technology based
  • Automated
physical distribution activities
Physical Distribution Activities
  • Inventory management
  • Order processing
  • Warehousing and storage
  • Materials handling
  • Protective packaging & containerization
  • Transportation
total cost a systems approach

Handling

Costs

Shipping

Costs

Transportation

Costs

Total Cost: A Systems Approach
improving physical distribution systems
Improving Physical Distribution Systems
  • Automation & Robotics
  • Warehouse consolidation
  • Process efficiency
  • Transportation mode
  • Re-location
  • Cost shifting
modes of transportation

Rail

Motor

Water

Air

Pipeline

Modes of Transportation
modes of transportation13
Modes of Transportation
  • Motor carrier
    • Medium reliability
    • Good speed
    • Good flexibility
    • Above average damage
    • Now more competitive and unregulated
modes of transportation14
Modes of Transportation
  • Air transport
    • Expensive
    • Very fast
    • Above average reliability
    • Average flexibility
    • Average reputation for undamaged goods

HUB-AND-SPOKE

APPROACH

modes of transportation15
Modes of Transportation
  • Water transportation
    • Low cost
    • Low reliability
    • Limited flexibility
    • Limited damage
modes of transportation16
Modes of Transportation
  • Railroads
    • Medium cost and speed
    • Low reliability
    • Many damaged goods
    • Good Geographic flexibility
modes of transportation17
Modes of Transportation
  • Pipeline
    • Mostly gas and petroleum
    • Low cost
    • High reliability
    • Limited flexibility

Texas

Kansas

modes of transportation18
Modes of Transportation
  • Intermodal transportation
    • Ship + Truck (fishyback)
    • Rail + Truck (piggyback)
    • Air + Truck (birdyback)
warehousing20
Warehousing
  • Inventory Control
    • Acquisition costs
    • Holding costs
    • Out-of-stock losses
    • Economic Order Quantity (EOQ)
    • = Forecasting!

Balancing act

slide22

Vendor Analysis

1. Delivery time

2. Delivery reliability

3. Order accuracy

4. Databased process

5. Damage history

6. Ease of doing business

review
Review
  • Describe key supply chain & logistical issues
  • Examine tradeoff between customer satisfaction & costs in distribution
  • Understand a total cost approach to distribution
  • Examine varied transportation modes
  • Identity elements of logistics management
  • Understand pervasive nature of materials management activities