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McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS LO1  Logistics Logistics  Logistics Management Logistics Management Cost-Effective Flow Customer Requirements = Service 16-2

SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS LO1  Supply Chain Supply Chain  Supply Chain Management Supply Chain Management 16-3

FIGURE 16-2 FIGURE 16-2 The automotive supply chain includes thousands of firms that provide the 5,000 or so parts in a typical car 16-4

SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT AND MARKETING STRATEGY LO2  Aligning a Supply Chain with Marketing Strategy Understand the Customer Understand the Supply Chain Harmonize the Supply Chain with the Marketing Strategy 16-5

INFORMATION AND LOGISTICS MANAGEMENT IN A CUSTOMER-DRIVEN SUPPLY CHAIN LO3  Information’s Role in Supply Chain Responsiveness and Efficiency Extranet Electronic Data Interchanges (EDIs) Electronic Data Interchanges (EDIs) 16-6

Click to Play Radio Ad UPS Radio Ad How is information technology applied to supply chain management? 16-7

 Dependability  Communication  Convenience INFORMATION AND LOGISTICS MANAGEMENT IN A CUSTOMER-DRIVEN SUPPLY CHAIN CUSTOMER SERVICE FACTORS LO3 16-8

INFORMATION AND LOGISTICS MANAGEMENT IN A CUSTOMER-DRIVEN SUPPLY CHAIN CUSTOMER SERVICE STANDARDS LO3 16-9

 Third-Party Logistics Providers Third-Party Logistics Providers Costs  Service Criteria Dependability Accessibility KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN TRANSPORTATION LO4 Time Capability Frequency 16-10

FIGURE 16-5 FIGURE 16-5 Advantages and disadvantages of five modes of transportation 16-11

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN WAREHOUSING AND MATERIALS HANDLING LO4  Storage Warehouses  Distribution Centers  Materials Handling 16-12

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN ORDER PROCESSING LO4  Order Processing Backorder EDI/EFT 16-13

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN INVENTORY MANAGEMENT LO4  Reasons for Inventory Capital Costs Inventory Service Costs  Inventory Costs Storage Costs Risk Costs 16-14

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN INVENTORY MANAGEMENT LO4  Supply Chain Inventory Strategies Just-in-Time (JIT) Concept Vendor-Managed Inventory (VMI) 16-15