1. Introduction to Logistics and Supply chain management

Integrated logistics

"The integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory and finished goods from point-of-origin to point-of-consumption."

3. Logistics system design and strategy aims at defining:

1. the logistics network structure (supply network, production network and dist network) 2. Transportation modes 3. Make or buy policies These decisions must be strongly aligned with the overall company

The evolution of logistics

1970: physical distrubution management 1980: Integrated logistics 1990: Supply chain management

What is the amount of inventory (or finished products) in the warehouses of manufacturers and retailers? (FMCG)

40 days of inventory on average in the warehouses of manufacturers 20 days of inventory in the warehouses of retailers

What is the average value of the on-shelf availability in the stores of the retailers?

93% as an average of all the different types of products (Source GS1:Europe)

What does cupply chain management include?

All the inter-company processes, i.e the processes which extend outside the company boundaries and span over the whole supply chain (Logistics, NPD, marketing etc)

What is the average saturation of transportation from manufacturers to deliver to retailers?

Approximately 70% for single trips

What are the three stacks of logistics management?

Decision level: 1. operational = Logistics Execution 2. Tactical = Logistics Planning 3. Strategic = Logistics System Design and Strategy

Distrubution

Decribes the broad range of activities concerned with efficient movement of finished products from the end of production line to consumer

Efficient

Emphasis on cost reduction

From production line to consumer:

Emphasis on the distribution system

what does FMCG stand for?

Fast moving consumer goods

Physical distrubution management

Focus: distribution of end products with a systemic view of transportation, storage, inventory management, packaging and materials handling Methodologies: systemic approach, total cost analysis, trade-offanalysis, operational research techniques (inventory management models, demand forecasting algorithms, site location, etc.) Organization: "Distribution Manager" Awareness: the National Council of Physical Distribution Management is founded in 1963

Supply chain management (focus, methodologies, organization, awareness)

Focus: focus on the Supply Chain as a whole; competition among supply chains; logistics as a differentiation lever Methodologies: analysis of supply chain performance, supply chain integration, collaborative planning models (VMI, CPFR) Organization: "Supply Chain Manager" Awareness: the Council of Logistics Management becomes the Council of Supply Chain Management Professionals

Integrated logistics (focus, methodologies, organization, awareness)

Focus: focus on the overall logistics system with the integration of the different sub-processes of Materials Management, Production Management, Physical Distribution Methodologies: systemic approach, total cost analysis, integrated planning principles, competitive value of the customer service Organization: "Logistics Manager" Awareness: the National Council of Physical Distribution Management becomes the Council of Logistics Management

Why is logistics & SCM important?

L&SCM must be accomplished to deliver right value to the customer They are expensive activities. The related costs varies between 5 and 15% of revenues Have substancial impact on inventory

Logistics system design and strategy

Logistic System design and strategy aims at defining: (1) the logistics network structure (supply network, production network and distribution network) (2) the transportation modes (road, rail, ship, inter-modal, etc.) (3) the "make or buy" policies

Logistics execution

Logistics Execution includes the design and management of the processes that support the flow of materials (handling, storage, physical transformation and transport activities) and data/documents along the supply chain

Logistics and the supply chain management

Logistics management is a part of amorg comprehensive concept, SCM Logistics is also about the reverse flow of goods and information from the point-of-consumption backward

Logistics managment - CSCPM definition

Logistics management is that part of supply chain management 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 customer requirements

Logistics planning

Logistics planning is the process that plans for the adjustment of the operational capacity and for the execution of the operational activities linking the demand and the supply sides of the supply chain. It aims at "getting the supply chain aligned and tuned"

The three stacks of Logistics management

On a strategic level: Logistics system and design strategy On a tactical level: Logistics planning: On a operational level: Logistics execution

Supply chain based competition (stretegic approaches and implications)

Strategic approach where: Competitiveness of the company is strongly impacted by the actions of the other supply chain members Competitiveness is, first of all, between different supply chains (and not between companies of the same supply chain) Strategic implications Competitiveness of the company can be improved focusing on the interface processes with the other supply chain members, through integration and collaboration In many cases the action on the interface processes is more effective (in terms of impact on KPIs) than that on internal processes

Supply chain management - CSCPM definition

Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-perfroming business model. It includes: - logistics management activities - manufacturing operations It drives: - coordination of processes and activities with and across marketing, sales product design, finance and information technology

2. Logistics planning

The process that plans for the operational capacity and for the execution of the operational activities linking demand and supply sides

What are key performance indicators (KPIs)?

The quantifiable metrics a company uses to evaluate progress toward critical success factors - turnover rates of employees - percentage of help desk calls answered in the first minute - number of product returns - number of new customers - average customer spending All and all - performance measures consists of customer service and logistics costs

Movement of finished products:

emphasis on materials handling and transportation

Integrated logistics - From point of origin to point of consumption:

first inclusion of the (internal) "supply chain perspective"

1. Logistics execution

includes the design and management of the processes that support the flow of materials (handling, storage, etc)

Integrated logistics - Plan, implement and control:

not only execution, emphasis on logistics as a business management discipline

Integrated logistics - Integration

the emphasis on the value of global optimization