Supply Chain Management Logistics

Supply Chain Management Legends of Logistics Dabbawala’s (Video)

Supply Chain Management Logistics is “The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of customer Satisfaction” (council of logistics management)

Supply Chain Management Business Logistics The planning, implementation, & control of the efficient & effective flow and storage of goods, services, & related information from point of origin to point of use or consumption in order to meet customer requirements Military Logistics The design & integration of all aspects of support for the operational capability of the military forces (deployed or in garrison) and their equipment to ensure readiness, reliability, & efficiency

Supply Chain Management Event Logistics The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources for an event to take place and to efficiently withdraw after the event

Supply Chain Management Logistics has existed since the beginning of civilization. Raw material and finished products had always to be moved, though on a small scale. Things began changing with the advance in transportation. Population began moving from rural to urban areas and to business centre. No longer did people live near production centre, nor did production take place near residence centre. The geographical distance between the production point and consumption point increased. And logistics gained importance.

Supply Chain Management THE PURPOSE OF LOGISTICS SYSTEM Right quantities of the Right goods to the Right places at the Right time in the Right condition at the Right cost.

Supply Chain Management A Simple Logistics Channel Market Customers Raw materials supply point Production facility Market Customers Raw materials supply point Market Customers Product Flow

Supply Chain Management A Multi-Echelon Logistics Channel Retailer Raw materials supply point Warehouse Retailer Retailer Raw materials supply point Production facility Retailer Raw materials supply point Warehouse Retailer Retailer Product Flow

Supply Chain Management Two Main Types: Inbound logistics:  The management of materials from suppliers and vendors into production processes or storage facilities. Outbound Logistics:  The process related to the movement and storage of products from the end of the production line to the end user.

Supply Chain Management Steps toward improving Logistics performance Make transport a customer service activity instead of a cost Reduce your stock pipeline to cut costs and improve service (go easy by low inventory) Pick as soon as you can (pick once, pick right and cut the cost time and error) Is everything you are doing is really necessary

Supply Chain Management Transportation: Transport or transportation is the movement of people and goods from one place to another. Industries which have the business of providing actual transport, transport of people or goods and services referred to as transport industries.

Supply Chain Management Basic modes of transport By Air By Road By Train By Sea

Supply Chain Management Considerations in Transportation Cost / Rates Reliability Safety / Damages Insurance Speed / Time Mode of Transportation Routes / sectors Vehicles type Urgency / Priority In-house / Outsource

Supply Chain Management

Supply Chain Management 3rd Party Logistic Service providers “Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function.” -- Simchi-Levi (2000)

Supply Chain Management Characteristics of 3PL Perform outsourced logistics activities Process management / Multiple activities More customized services Long-term commitments (1~ 3 years)

Supply Chain Management Advantages Cost reduction Focus on core competency Improved efficiency, service and flexibility Disadvantages Loss of control Impact on in-house workforce

Supply Chain Management Current State -- Market Size 3PL market is growing ( $ Billions )

Supply Chain Management Current use of 3PL by industry Industry Percentage of 3PL use in different industries Computer Consumer Retail Chemical Medical Auto Source "What's ahead for 3PLs“ Modern Materials Handling, April, 2000