About the lecturer Dr. Qing Lu (Henry) – Grew up in Shanghai, China – Lived in Singapore from 1994 to 2014 – Came to IEU last September Contact information o Office: C-808, Tel: o o Course materials will be posted online every Thursday, Two-way communication vital, let me know whether you understand or not anything concerned

LOG 408: Global Logistics Management Lecture 1: Introduction

What Is a Supply Chain? Flow of products and services from: – Raw materials manufacturers – Intermediate products manufacturers – End product manufacturers – Wholesalers and distributors and – Retailers Connected by transportation and storage activities Integrated through information, planning, and integration activities 1-3

Focus Company Suppliers Supplier’s suppliers Customers Customers/ End users AcquireConvert Distribute The Supply Chain is Multi-Enterprise Product and information flow Scope in reality 1-4

SUPPLY CHAIN MANAGEMENT Interfunctional coordination Interorganizational coordination Activity and process administration The Multi-Dimensions of SCM 1-5

1-6 Logistics Defined

What is logistics? Logistics involves getting – the right product, – in the right way, – in the right quantity and right quality, – in the right place at the right time, – for the right customer at the right cost Its not just ‘ trucks and sheds ’ 1-7

What is supply chain management? The supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer Supply chain management (SCM) is the management across and within a network of upstream and downstream organizations of both relationships and flows of material, information and resources – The purposes of SCM are to create value, enhance efficiency, and satisfy customers 1-8

Key flows in SCM Physical flows of materials Flows of information that inform the supply chain Resources (especially finance, but also others such as people and equipment) which help the supply chain to operate effectively – Furthermore, not all resources in the supply chain are tangible, for example good quality inter-company relationships are often cited as a highly important ingredient of effective supply chains 1-9

Source Supplier Distributo r Retailer End-User Converte r Consumers Information Flow Funds/Demand Flow Value-Added Services Material Flow Reuse/Maintenance/After Sales Service Flow SCM Definition 1-10

The evolution of the integrated supply chain (1) 1-11

1950s 1960s 1970s 1980s 1990s 2000s Beyond Traditional Mass Manufacturing Inventory Management/Cost Optimization JIT, TQM, BPR, Alliances SCM Formation/ Extensions Further Refinement of SCM Capabilities The evolution of the integrated supply chain (2) 1-12

Progression of Logistics Costs FIGURE 1-3: Logistics costs’ share of the U.S. economy 1-13

Composition of Logistics Costs FIGURE 1-4: Total U.S. logistics costs between 1984 and

Example of Supply Chain Complexity Tracing back the dress you are wearing 1-15

1-16

QC & Shipping [Hong Kong] QC & Shipping [Hong Kong] Product Design [Hong Kong] Product Design [Hong Kong] Zippers+… [Japan+…] Zippers+… [Japan+…] Stitching [Indonesia] Stitching [Indonesia] Weaving [Taiwan] Weaving [Taiwan] Yarn Spinning [Korea] Yarn Spinning [Korea] An Illustration: How Li & Fung Might Make a Dress Globally Dispersed Manufacturing 1-17

The evolution of globalization in logistics and supply chain management Six key developments for globalization of logistics and SCM: – Reduced transport intensity of freight From bulky low-value agricultural products to high- value electronics goods Value-to volume ratio increased a lot (e.g., from live chicken to processed frozen chicken) Lower transportation cost sensitivity – Falling product prices for most manufactured goods (e.g., electronics products) 1-18

The evolution of globalization in logistics and supply chain management (Cont.) – Deregulation of transport More competition in freight market with cost reduction – Productivity improvements Containerization since 1956 Wide IT usage in transportation (e.g., barcode, RFID) – Emphasis on inventory reduction JIT – Changes in company structure Companies are moving from integration to specialization 1-19

Textbook 1-20

Course Objectives and Overview Equip the students on  logistics management strategies  logistics management operations from a global perspective Three parts in this course  SC Context (global environment, relationship, strategy, Ch.2 to 4)  SC Operation (transportation, security, logistics service providers, Ch.6 to 8)  SC Issues (SC risk, sustainability, Ch.15 to 16)

Course Evaluation 10% attendance – Attend lectures as many as you can 20% in-class assignment in group (quiz) – Be aware of incoming quiz 20% in-class case presentation – Arrange grouping and assignment as early as possible 50% final exam at the end of the course – Get familiar with the context, ask questions if you don’t understand