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