Introduction to Logistics

“Ideal” Armed Forces of Mauryan Empire Infantry Cavalry (War) Elephants Chariots

Ancient Versus 1960s-70s Manufacturing Management Materials Management Distribution and Sales Management Procurement Inventory Control Manufacturing Sales Distribution The purpose of Cost Control Resulted Price-based competition

Support for Military Warfare Transport Supplies Communications Medical Aid Note: Logistics has evolved significantly post-WWII with its integration in business and trade Procurement Inventory Control Manufacturing Sales Distribution

What was 1960s like for Business World? Large number of players entering market Too many products with lacking vision limited cash flow Procurement, inventory, WIP, storage and warehousing, etc were all fragmented Costs were out of control

Ancient Versus 1980s Manufacturing Management Materials Management Marketing and Distribution and Management Procurement Inventory Control Manufacturing Sales Distribution The purpose of profit maximization, volume and cost reduction Resulted in increased productivity, profitability and market share

What was 1980s like for Business World? Oil shocks and inflation Production productivity was at all time low Gradual change with regard to multi-national operations

Ancient Versus 1990s Vendor Management Logistics Customers Procurement Inventory Control Manufacturing Sales Distribution The purpose of core competency Resulted in customer value and harmonious relationship Introduction to Supply Chain Management

What was 1990s like for Business World? Economic liberalization in many developing countries Rapid innovations in science and technology New inventory techniques like JIT Companies developing core competency or competitive advantage. Logistics managers started recognizing customers as their business partners rather than traders Emergence of third-party logistics service provider

Why Core Competency Or Competitive Advantage? A company has a competitive advantage over its competitors by having any or all of the following: – Cost Leadership – Differentiation – Innovation – Operational Effectiveness …this could lead to “Core Competency” 1.It is not easy for competitors to imitate 2.It can be reused widely for many products/services and markets 3.It must contribute to the end consumer’s experienced benefits and the value of the product or service to its customers Advocated by C.K. Prahlad and Gary Hamel

About Logistics Comes from the French word “loger” which means ‘to lodge’ According to Council of Logistics Management, “Logistics is the process of planning, implementing and controlling the efficient, cost- effective flow and storage of raw materials, in- process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer needs”

Today’s Logistics - Military CAPABILITIESSERVICES Operational ReadinessFuel SustainabilityRations Spare Parts Maintenance Ordinance Mail Medical Supplies

Today’s Logistics - Engineering CAPABILITIESSERVICES Design for Supportability Operational Readiness Integrated logistics support Tradeoffs Life-cycle cost management Sustainability Product Support

Today’s Logistics – Business (Inbound & Outbound) CAPABILITIESSERVICES (Inbound) Continuous flow World-class suppliers Shipment Tracking Transportation Network Inventory Management Materials Handling (Inbound) Minimal inventory Reliable Deliveries Warehousing activities Responsive to requirements (Outbound) Customer-driven Computer Systems (?) Regional distribution systems Value-added services Shipment Tracking Carrier Management Information Accuracy (Outbound) Order fill rate Order cycle Damage free delivery Liberal return policy On-time delivery Customer satisfaction

Today’s Logistics - Event CAPABILITIESSERVICES Pre-event planning and staging Support Cleanup (asset withdrawal) Equipment in place Supplies in place Facilities operational Inventory management Asset control and protection Flexible response Participant supports services Spectator support services Media support services Redeployment after avant

Today’s Logistics - Process CAPABILITIESSERVICES (example) Bus Transportation Asset Procurement – vehicle maintenance, Route design, Time schedules, fuel contracts, Safety plans Transportation to School

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