SUPPLY CHAIN AND LOGISTICS MANAGEMENT Multichannel Marketing 6218

SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS Logistics – getting the right amount of the right products to the right place at the right time at the lowest possible cost. Logistics Management – the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods from the point of origin to the point of consumption to satisfy customers requirements.

SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS Supply Chain – consists of a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users Supply Chain Management – is the integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to customers

Relating logistics management and supply chain management to supplier networks and marketing channels

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

Paint industry supply chain

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

Aligning a Supply Chain with Marketing Strategy SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT AND MARKETING STRATEGY Aligning a Supply Chain with Marketing Strategy Dell: A Responsive Supply Chain Wal-Mart: An Efficient Supply Chain

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

INFORMATION AND LOGISTICS MANAGEMENT IN A CUSTOMER-DRIVEN SUPPLY CHAIN Total Logistics Cost consists of expenses associate with transportation, materials handling and warehousing, inventory stockouts (being out of inventory), order processing and return goods handling Customer Service is the ability of logistics management to satisfy users in terms of time, dependability, communication and convenience.

How total logistics cost varies with the number of warehouses used based on inventory costs and transportation costs

Supply chain managers balance total logistics cost factors against customer service factors

Time Lead Time Quick Response Efficient Consumer Response INFORMATION AND LOGISTICS MANAGEMENT IN A CUSTOMER-DRIVEN SUPPLY CHAIN CUSTOMER SERVICE FACTORS Time Lead Time Order Cycle Time Replenishment Time Quick Response Efficient Consumer Response

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

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

Out-of-Stock (%) and On-Time-Delivery (%) USING MARKETING DASHBOARDS Diagnosing Out-of-Stocks and On-Time Delivery for Organic Produce Out-of-Stock (%) and On-Time-Delivery (%)

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

UPS and Ryder What are third-party logistics providers?

Advantages and disadvantages of five modes of transportation

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN TRANSPORTATION Railroads Intermodal Transportation Piggy-Back or Trailer on Flatcar (TOFC) Containers

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN TRANSPORTATION Motor Carriers Air Carriers and Express Companies Freight Forwarders/ Express Companies

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN TRANSPORTATION Pipelines Water

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN WAREHOUSING AND MATERIALS HANDLING Storage Warehouses Distribution Centers Materials Handling

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN INVENTORY MANAGEMENT Inventory Costs Capital Costs The opportunity costs resulting from tying up funds in inventory instead of using them in other, more profitable investments. Storage Costs Warehousing space and materials handling costs.

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN INVENTORY MANAGEMENT Inventory Costs Risk Costs Possible loss, damage, pilferage, perishability and obsolescence costs. Inventory Service Costs Items such as insurance and taxes that are present in many states.

KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN INVENTORY MANAGEMENT Supply Chain Inventory Strategies Just-in-Time (JIT) Concept An inventory system that operates with very low inventories and requires fast, on-time deliveries. Vendor-Managed Inventory (VMI) Suppliers determine the product amount and assortment a customer (like a retailer) needs and automatically delivers the appropriate items.

CLOSING THE LOOP: REVERSE LOGISTICS The process of reclaiming recyclable and reusable materials, returns and reworks from the point of consumption or use fro repair, remanufacturing, redistribution or disposal. Results leads to reduced waste in landfills. Subaru’s Plant in Indiana – the first “zero landfill” auto assembly plan in the U.S.