Organizing and Analyzing Logistics Systems CHAPTER 14 Organizing and Analyzing Logistics Systems

Learning Objectives To examine the problems and opportunities involved in systems analysis To relate the importance of industry standards to systems analysis To discuss the steps involved in redesigning a logistics system To examine a number of organizational alternatives © 2008 Prentice Hall

Learning Objectives To describe a number of techniques for achieving logistics coordination and integration To distinguish between centralized and decentralized logistics organizations To distinguish between logistics within the firm and outsourcing logistics activities © 2008 Prentice Hall

Logistics Systems: Analysis, Design, and Integration Key Terms Benchmarking Channels audit Competition audit Customer audit direct product profitability (DPP) analysis Key Terms Environmental sensitivity audit Existing facilities audit Integrated service providers © 2008 Prentice Hall

Logistics Systems: Analysis, Design, and Integration Key Terms Linking-pin organization Matrix management Product audit Simulation System constraints Key Terms Systems analysis Third-party, or contract, logistics Unified department organization Vendor audit © 2008 Prentice Hall

What Is Systems Analysis? Systems analysis refers to the orderly and planned observation of one or more segments in the logistics network or supply chain to determine how well each segment functions © 2008 Prentice Hall

General Questions Why do we perform each task? What value is added by it? Why are the tasks performed in the order they are? Can we alter the sequence of the processing steps to increase efficiency? Why are the tasks performed by a particular group or individual? Could others perform this task? Is there a better way for the system to operate? © 2008 Prentice Hall

Problems in Systems Analysis Multiple business functions are impacted There are trade-offs among conflicting objectives Logistics system impacts are difficult to precisely evaluate There are business issues unique to each logistics system Quantitative analysis is essential for intelligent decisions © 2008 Prentice Hall

Figure 14-1: A Scoring Checklist Used to Determine Logistics Planning or Strategy Study © 2008 Prentice Hall

Partial Systems Analysis Customer profitability analysis Warehousing productivity analysis Transportation cost analysis Consolidation analysis Direct product profitability analysis Benchmarking Industry standards analysis © 2008 Prentice Hall

Logistics System Design Establishing objectives and constraints Quality programs World-class logistics programs System constraints Organization of the study team Data collection © 2008 Prentice Hall

Logistics System Design (continued) Product audit Existing facilities audit Vendor audit Customer audit Channels audit Competition audit Environmental sensitivity audit © 2008 Prentice Hall

Figure 14-7: Flexibility Makes It Easier to Work Together © 2008 Prentice Hall

Logistics System Design (continued) Analysis of the data Simulation Design implementation © 2008 Prentice Hall

Figure 14-8: Schematic Drawing of Automated Sorting System © 2008 Prentice Hall

Systems Integration: Logistics within the Firm Dispersion of logistics activities Achieving coordination The status quo The linking-pin concept Linking-pin organization A unified department Unified department organization Centralized versus decentralized Matrix management © 2008 Prentice Hall

Figure 14-9: Becton Dickinson’s Worldwide Sources © 2008 Prentice Hall

Systems Integration: Logistics Activities Outside the Firm Third-party, or contract, logistics Integrated service providers Monitoring third-party performance © 2008 Prentice Hall