Logistics Management 3380 Topic 1: What is Logistics
Seven Rights of Logistics
1. right product 2. right customer 3. right time 4. right condition 5. right quantity 6. right place 7. right cost
Logistics Management
That part of supply chain management that plans, implements, and controls the efficient, effective forward and reserves 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
Eight waste: excess processing
activities that the customer does not add value and is not willing to pay for
Service logistics
all the people, facilities and supplies in place to effectively deliver services to customers
Eight waste: defects
any work or product that is less than perfect
sweep
clean and organize each day as you use things - put them away benefit: will reduce and prevent miscommunication and duplicated effort
sustain
continuously follow this approach and implement it throughout your company Benefit: improved warehouse performance and employee satisfaction and engagement
repeat
continuously revisit lean techniques until a state of perfection is reached in which the right value is created with no waste
Possession Utility
created by marketing when it translates customer needs into product and service requirements, promotes the resulting product's value, and facilitates exchange so the customer may "possess" it goal: to make you desire to "possess" the item
Utility
economic term used to describe perceived value. there are five utilities
sort
eliminate unneeded items from the area, store things not needed now-organize Benefit: free up floor space; have more efficient filling of orders as fast moving items are located closer to each other and closer to the front of the warehouse
lean practices
eliminating all processes, steps and materials that do not add value
Supply Chain Management
encompasses the planning and the management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies
Eight waste: inventory
excess material that customers or manufacturing don't currently need
Processing
flow of information and the visibility of shipments during movement and storage
Quantity Utility
focuses on delivering customers the right amount of product
Kaizen events
gathering of people who are involved in the day-to-day management of a process who evaluate the process to search for ways to eliminate the eight wastes and improve the process
Tradeoffs
giving up something in order to get something else. In logistics, there is often the trade-off of paying more to get product moved faster
inventory costs
go up because more dollars are tied up in inventory, insurance costs will be higher, more security is needed, and the loss is higher if something negative occurs
simplify
have a logical place where everything belongs benefit: inventory accuracy, order accuracy, and fill rate will improve. Fewer split shipments or expediting
standardize
have a standardized processes and procedures to maintain workplace order, ease training of new people benefit: will reduce and prevent miscommunication, improve service levels
product density
how much space a product takes up versus how much it weighs. Dense products weigh a lot for their size
eliminate process waste
identify and evaluate all the processes in the supply chain for each product, eliminating all activities and processes that do not add value
Eight waste: waiting
idle/wasted time when resources are not ready/available to use
eliminate wasted time and space
improves the flow to the customer
transportation costs
increase for many of the same reasons and inventory costs, plus you want to use more expensive models to get the product where it is going faster - to close a sale and free up cash faster
packaging costs
increases because you want to protect the product from loss, damage, or pilferage toa greater extent due to the greater potential loss/
Place Utility
involves delivering an item exactly where it is needed
Eight waste: overproduction
making more than the customer wants or than you have known demand for
Gross Domestic Product
monetary value of all the finished goods and services produced within a country, generally calculated on an annual basis
Eight waste: transportation
movement of materials or information that does not add value
Eight waste: motion
movement of people that does not add value
Military logistics
moving groups of people and supplies, setting up camps, replenishing supplies and people, breaking campu down again and moving out
Passenger logistics
moving people
Storage
must try to balance inventory levels, locations, and choice of transport mode to serve your customers quickly
Eight waste: not utilizing staff talent
not challenging employees or listening to and encouraging their ideas. If this is blatant, employees can actually undermine your efforts to improve on the other seven wastes
Time Utility
occurs when a product arrives when it is needed
Humanitarian Logistics
planning the effective flow and storage of goods as well as the exchange of information to alleviate the suffering of people
Form Utility
primary responsibility of purchasing and operations managers who acquire inputs and transform them into products or services of greater customer value
cube
the amount of space that a product uses
Infrastructure
the processes, equipment, people and flow that support a particular industry or activity. For example, logistics infrastructure includes information systems, roadways, airports, truck drivers, distribution centers and much more to make logistics operations possible
Event Logistics
the resources (facilities, people and infrastructures) used to organize, deliver and execute an event from initial schedule through teardown and clean up
Disposal
to discard a product, possibly into a landfill, when its useful is over
Reuse
to salvage something and use it again rather than dispose of it
Movement
transportation permits goods to flow from one place to another, making global trade possible
look through the eyes of the customer
understand a product's value proposition as the end customer sees it
eight wastes
wastes that lean processes aim to reduce or eliminate. They are: defects, overproduction, waiting, not utilizing staff talent, transportation, inventory, motion, and excess processing
weigh out
when a product fills the weight requirement for a truck before it fills the available space
cube out
when a product fills up a trailer in terms of space before it hits the imposed weight limit
Recycling
when a product is reduced to its basic elements, which are reused