Introduction to LOGISTICS & Supply Chain Management Qafqaz University Center for Entrepreneurship Development and Research Ahmad Badalov Research Assistant, Member of CEDR

Ahmad Badalov Experience Education Bachelor Degree from Baku State University, 2006-2010 MBA Management from Qafqaz University, 2011-2013 Experience Logistics Specialist at Aztexnika LTD,May, 2012–August, 2014 Course Coordinator at Galaxy Education Center,

Course Outline Introduction Planning of Logistics Description of Terms, Logistics Supply Chain Supply Chain Entegration Planning of Logistics Resource Planning Logistics Network Design Activities in Logistics Procurement Inventory Management Warehousing & Material Handling Transportation

Introduction The aim of all organizations is to supply some products to their customers These products may be goods or service Mainly goods Goods and Service Mainly service Car producers Construction Tailor Restaurants Healty sector Education

Introduction The hearth of all organizations are operations that create and deliver the products. These operations (process) converts inputs into outputs. PROCESS INPUT OUTPUT People Buildings Raw materials Equipment Information Investment Etc.. Manufacture Serve Supply Transport Sell Train Etc. Goods Service Profit Waste Wages Etc. İşlemler değişik girdileri alarak, onları istenen bir çıktıya/ürüne dönüştürürler.. Organizasyonun ürettiği ürünlerde müşterilere aktarılır.

Introduction The products created by an organization is like demand-supply cycle Customer Demad for product Supply of product Operations Other outputs Other inputs Logistics is the function responsible for the flow of material around this cycle

Operations within organizations The Role of Logistics Logistics is responsible for the flow of material : from suppliers into organizations, through operations within organizations, and to customers Operations within organizations External supplier External customers Internal supplier Internal customer Inbound logistics Outbound logistics Materials management Logistics

Downstream activities Supply Chain is a series of activities which provide the flow of goods and services from initial suppliers to manufacturer and final customers. More complex logistics system in which raw materials are converted into finished products and then distributed to the final users Initial supplier Upstream activities Downstream activities final customer 3. tier supplier 2. tier supplier 1. tier supplier 1. tier customer 2. tier customer 3. tier customer ORGANISATION

Supply Chain Information Flow Semi-finished goods Storage goods Suppliers Producer Deliver (3PL) Customer

AIMS of LOGISTICS Logistics is responsible for the flow of materials through a supply chain. This function is also called supply chain management. Logistics: time-related positioning of resources, or the strategic management of the total supply chain Supply Chain: sequence of events intended to satisfy a customer The terms: logistics management, business logistics, distribution management, materials management, etc.

AIMS of LOGISTICS There are 2 main aims: To move materials into, through, and out of their own organizations as efficiently as possible, To contribute to an efficient flow through the whole supply chain The overall aim is to achieve higher customer satisfaction It must provide a high quality service with low or acceptable costs.

Simple Description of Logistics The easiest understanable definition is below and known as 7R Collection of activities to deliver the Right amount of Right material to the Right consumer at the Right conditions at the Right place at the Right time at the Right cost Logistic is responsible for flow of materials along the supply chain,

DEVELOPMENT of LOGISTICS

Development of Logistics Logistics exist with military forces… After the II.WW, companies in USA recognized the importance of logistics, and used it after 1960s. Early studies related to problem of distribution of agricultural products in USA, in 1954’de Paul Converse suggested that physical distribution part of marketing should be investigated by academicians and practitioners, in 1962’de Peter Drucker wrote an article about the importance of distribution

Development of Logistics (2) National Council of Physical Distribution Management, established in 1963 Council of Logistics Management in 1985 Council of Supply Chain Management in 2004 International Society of Logistics in 1966

Development of Logistics (3) Before 1960’s and 1970’s traffic management and Distribution managers, have been responsible for delivering companies products to wholesaler and/or customers. During 1970 and 1980 deregulations in transportation sectors have offered companies various transportation modes

Development of Logistics (4) High interest rates, increases in energy costs and economical globalization in 1970, uncovered the importance of logistics cost As a result of economical globalization; Local firms have been forced to cut down cost due to international firms, Logistics costs became important

Development of Logistics (5) During 1980’s; It is recognized that transportation and distribution of goods is also part of marketing, In order to cut down costs Distribution and transportation, Buying, Production planning, Material management and customer relations needs to be integrated with information techologies and logistics engineering

Development of Logistics (6) Development in information technologies enable firms to easily manage activities such as; demand, movement, Warehousing of products and materials MRP, MRP II, DRP, DRP II, ERP systems enable interconnection of material management activities