Logistics and
Supply Chain Management
• Lecturer: Vo Quynh Mai
• Office: Room O2.602
• Email:
[email protected]• Consultation: Tue, 1 pm – 3 pm or by
appointment
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Course Objectives
- Understand the requirements of successful operations and supply
chain practice in modern business.
- Identify and apply a range of operations management initiatives and
techniques that can be considered in the development of an operations
strategy.
- Develop a conviction that operations can be managed as a strategic
resource.
- Understand the models, processes and tools used to analyse, design
and implement operations and supply chain management solutions.
- Develop a thorough understanding of the components of supply
chains, the material and information flow interactions between them and
the analytical and management processes that facilitate successful
supply chain performance.
- Understand the role and importance of logistics in competitive
business performance.
- Describe and evaluate purchasing strategy options.
- Apply benchmarking and comparative performance techniques.
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References
• Text book: Waters, D. (2003). Logistics: an
introduction to supply chain management.
• Reference books: Bowersox, D. J., Closs, D. J., &
Cooper, M. B. (2002). Supply chain logistics
management (Vol. 2). New York, NY: McGraw-Hill.
Grading
Midterm Exam 30%
Group Presentation 20%
Homework & Quizzes 10%
Final Exam 40%
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Lecture 1:
Fundamentals of Logistics &
Supply Chain Management
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Learning Objectives
■ DEFINE ‘logistics’ and associated terms
■ UNDERSTAND the role and structure of supply
chains
■ LIST different activities of logistics and understand
the
relationships between them
■ DISCUSS the aims of logistics
■ SHOW how logistics contributes to customer
satisfaction
■ RECOGNISE the importance of logistics to every
organisation
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Outline
1. Definitions
1.1. Products
1.2. Materials
1.3. Logistics
2. The Supply Chain
3. Aims of Logistics
4. Logistics activities
5. Importance of logistics
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1. DEFINITIONS
1.1. Products (1 of 2)
• Products : Goods (tangible) and Services
(intangible)
• Every organisation supplies a product, which is the
combination of goods and services that it passes to
its customers
Figure: Spectrum of Product
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1.1. Products (2 of 2)
Operations: include manufacturing, serving,
transporting, selling, training, and so on. The main
outputs are products.
Figure: Operations transform inputs to desired
outputs
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1.2. Materials
• Materials: all the things needed to make a product , and
these can be both tangible (such as raw materials) and
intangible (such as information)
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1.3. Logistics (1 of 2)
• Definition of Logistics: Logistics is the function
that is responsible for the movement of materials
(and information). It is responsible for the
transport and storage of materials between
suppliers and customers.
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1.3. Logistics (2 of 2)
Inbound logistics: activities between external suppliers and the
organization
Outbound logistics: activities between external customers and
the organization
Operations within the organization: activities between internal
suppliers and internal customers
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2. THE SUPPLY CHAIN
A SUPPLY CHAIN consists of the series of activities
and organizations that materials move through on
their journey from initial suppliers to final customers.
Every product has its own unique supply chain
Supply chains develop to give efficient flows of
materials
The resulting movements can be very complex, so
some people prefer terms like supply networks or
supply webs
Supply chain management is responsible for the
flow of materials through a supply chain. It is another
term for logistics
Supply Chain Illustration
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Structure of the supply chain (1 of 2)
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Structure of the supply chain (2 of 2)
• Activities in front of the organisation
(moving materials inwards) are called
upstream; activities after it (moving
materials outwards) are called downstream.
• Upstream activities are divided into tiers of
suppliers.
• Downstream activities are divided into tiers
of customers.
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Exercises
• Consider the purchase of a can of soda at a
convenience store. Describe the various stages
in the supply chain and the different flows
involved (minimum 5 levels of parties.
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3. AIMS OF LOGISTICS
• Minimize the overall costs
• Achieve high customer
satisfaction
=> However, higher customer
service needs more resources that
come with higher costs. A realistic
aim is to provide the best balance
of customer service and costs.
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4. LOGISTICS ACTIVITIES
• Procurement or purchasing: finds suitable suppliers, negotiates terms and
conditions, organizes delivery, arranges insurance and payment… to get
materials into the organization
• Inward transport or traffic management: moves materials from suppliers to
the organization’s receiving area.
• Receiving: makes sure that materials delivered correspond to the order,
acknowledges receipt, unloads delivery vehicles, inspects materials for
damage, and sorts them.
• Warehousing or stores: moves materials into storage, and takes care of
them until they are needed.
• Stock control: sets the policies for inventory
• Order picking: finds and removes materials from stores.
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4. LOGISTICS ACTIVITIES
• Materials handling: moves materials through the operations within
an organisation
• Outward transport: takes materials from the departure area and
delivers them to customers
• Physical distribution management: deliver finished goods to
customers, including outward transport
• Recycling, returns and waste disposal
• Location
• Communication
• Others: sales forecasting, production scheduling, customer
service management, overseas liaison, third party operations,
and so on.
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Summary of logistics activities
•
5. IMPORTANCE OF LOGISTICS
Logistics is important because it:
• is essential for all organisations
• has strategic importance
• is expensive
• has effects on most operations
• directly affects profits, lead time, reliability
and other measures of organisational
performance
• forms links with upstream suppliers
• forms links with downstream customers
• determines the best locations and sizes of
facilities
• gives public exposure and familiarity
• is inherently risky
• prohibits or discourages some operations
• can encourage growth of other organisations 23
OTHER INFORMATION
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Case Study
• NIKE logistics center
http://www.youtube.com/watch?v=NkfHVYv5n
Uo&feature=related
• How UPS Cargo Containers Work
http://www.youtube.com/watch?v=MyeqlieHhi4
• Simulation
http://www.youtube.com/watch?v=_0UJ0lKnn_
o&feature=related
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Organizing Logistics
Fig1.8. Organizing Logistics
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Current trends
• Improving communication
– Electronic data interchange (EDI)
– Electronic point-of-sales data (EPOS)
– e-purchasing of e-procurement
– …
– Support of EDI:
• Item coding (often bar-coding)
• Electronic Fund Transfer (EFT)
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Current trends
• Improving customer service
– Lower lead-times
– synchronized material movement
– mass customization
• Other significant tendencies
– Globalization
– Reduced number of suppliers
– Concentration of ownership
– Outsourcing.
– Make or Buy.
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Current trends
• Other significant tendencies
– Cross-docking
– Direct delivery
– Stock reduction methods
– Increasing environmental concerns
– More collaboration along the supply
Three important themes for logistics consider
chain
LEANNESS, AGILITY and INTEGRATION. Ideally,
logistics should aim for all three of these
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Current themes
• LEAN Logistics
– faster deliveries, reduce stock levels,
reduce handling, lower costs, reduce
waste etc.
• AGILE Logistics
– flexible and responsive, customized
service, respond quickly to a changing
demand.
• INTEGRATION Logistics
– co-operate with other organizations
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Thank you
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