1. Logistics

2. Overview of logistics Logistics of business is big and important
The logistical value proposition
The work of logistics
Logistical operations
Logistics integration objectives
Logistical operating arrangements
Flexible structure
Supply chain synchronization

3. What is Logistics?
Logistics is the design and administration of systems to control movement and geographical positioning of raw materials, work-in-process, and finished inventories at the lowest total cost.

4. Logistics
Logistics involves the management of order processing, inventory, transportation, and the combination of warehousing, materials handling, and packaging, all integrated throughout a network of facilities.
The goal of logistics is to support procurement, manufacturing, and customer accommodation supply chain operational requirements.

5. Logistics
To achieve lowest total cost means that financial and human assets committed to logistics must be held to an absolute minimum. It is also necessary to hold operational expenditures as low as possible.
The combinations of resources, skills, and systems required to achieve superior logistics are challenging to integrate, but once achieved, such integrated competency is difficult for competitors to replicate.

6. Logistics will continue its renaissance in the future
Information technologies will automate many of the traditionally manual logistical functions:
Automated port and rail operations
RFID tagging of materials
Advanced technologies for warehousing and inventory operations
Removal of trade barriers will continue to expand global trade and logistics

7. Logistical value Proposition
Logistical value proposition consists of a commitment to key customer expectations and requirements at a minimum cost
The two elements of this value proposition are Service and Cost Minimization
Firms must make appropriate tradeoffs between service and cost for each of their key customers

8. Service benefits are created by logistical performance in 3 areas
Availability involves having inventory to consistently meet customer material or product requirements
Operational performance deals with the time required to deliver a customer’s order
Key metrics for this area involve delivery speed and consistency
Service reliability involves the quality attributes of logistics
Key to quality is accurate measurement of availability and operational performance over time

9. Different perspectives on cost minimization
Traditional Cost Logistics Model
Total Cost Logistics Model
Minimize order processing cost +
Minimize inventory cost +
Minimize transportation cost +
Minimize warehousing, materials handling and packaging cost +
Minimize facility cost
_______________________ ___
Lowest logistics cost
Minimize (order processing + inventory + transportation + warehousing, materials handling and packaging + facility) cost
_______________________ __
Lowest total logistics cost

10. Malfunction is concerned with the probability of logistical performance failure, such as damaged products, incorrect assortment, or inaccurate documentation.
When it happens, recovery time can measure a firm’s logistical competency.
What is malfunction ?

11. Figure 2-1 Integrated Logistics

12. How is a sound inventory strategy?
Core customer segmentation;
Product profitability;
Transportation integration;
Time-based performance;
Competitive performance.
Pareto principle
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13. transportation
Three fundamental factors that influence transportation performance: cost, speed, consistency
two kinds of costs:
The payment for shipment;
The expenses related to maintaining in-transit inventory.
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14. Consistency of transportation
Consistency of transportation refers to variations in time required to perform a specific movement over a number of shipments, which also reflects the dependability of transportation.
Speed and consistency combine to create the quality aspect of transportation.
Consistency of transportation

15. Logistical Operations

16. Figure 2-2 Logistical Integration
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17. How to understand CA’s implication?
CA is the movement of finished product to customers.
CA aligns manufactures, wholesales, and retailers into supply chain arrangements to provide customers product availability.
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18. Dealing with the varied aspects of customer accommodation is typically called customer relationship management.
CRM

19. Manufacturing support
The overall concern of manufacturing support is not how production occurs but rather what, when, and where products will be manufactured.
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20. Logistical operating arrangements

21. Echelon-structured logistics

22. Either break-bulk or consolidation warehouses
echelon
Total cost analysis
Either break-bulk or consolidation warehouses
Utilize warehouses to create inventory assortments and achieve consolidation economies with large-volume transportation shipments
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23. Figure 2-4 Combined Echelon and Direct Delivery

24. Nodes are facility locations. Forms of communications and transportation represent links between the nodes. Most logistical work takes place at nodes whereas links represent the interface among locations. Nodes represent network facilities where materials are processed and base inventories and safety stocks are maintained. Inventory that is in between nodes is called “in transit”.
Compare and contrast a performance cycle node and a link. Give an example of each

25. Figure 2-5 Flexible Echelon and Direct Delivery

26. Supply chain synchronization
Multifirm operational integration across a supply chain is referred to as supply chain synchronization
At the heart of supply chain integration is the goal of leveraging member core competencies to achieve overall reduction of inventory dwell time.

27. Performance cycle structure
It represents the elements of work necessary to complete the logistics related to customer accommodation, manufacturing, or procurement.
It is the primary unit of analysis for logistical design and synchronization
Performance cycle structure

28. Performance cycle structure
Information and transportation must link all firms functioning in SC;
The operational locations that are linked by information and transportation are referred to as nodes.
Performance cycle structure

29. Performance cycle structure
⑴Nodes
⑵Links
⑶Inventory assets
⒈base stock (one-half of the average shipment size received)
⒉safety stock: exists to protect against variance in demand or operational lead time.
Performance cycle structure

30. Nodes are facility locations. Forms of communications and transportation represent links between the nodes. Most logistical work takes place at nodes whereas links represent the interface among locations. Nodes represent network facilities where materials are processed and base inventories and safety stocks are maintained. Inventory that is in between nodes is called “in transit”.
Compare and contrast a performance cycle node and a link.

31. SC output is the level of performance expected from the combined logistical operations.
SC efficiency is a measure of resource expenditure necessary to achieve such logistical effectiveness sc

32. The effectiveness and efficiencyof logistical performance cycles are key concerns in SCM.
It is important to realize that transaction frequency and intensity will vary between performance cycles.
A complicating fact is that any operation or facility in one supply chain may simultaneously be participating in a number of other arrangements.
scm

33. Conclusions
the logistics performance cycle is the basic unit of supply chain design and operational control, in essence, the performance cycle structure is the framework for implementation of integrated logistics across the supply chain.
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34. Performance cycle uncertainty
Major objective of logistics in all areas is to reduce performance cycle uncertainty
Operational variance is randomly introduced during the cycle through
The structure of the performance cycle itself
Operating conditions
The quality of logistical operations

35. Figure 2-6 Logistical Performance Cycles

36. One of the major objectives of logistical management is to reduce the uncertainty in performance cycles. Since the performance cycles are made up of many activities, each with its own volatility or variance, variance over the entire cycle can significantly impede the logistics organization’s efficiency and effectiveness.
To control variance, the firm must conform expected cycle time to actual cycle time. If cycle time is less than expected, the delivered product becomes inventory to be stored. If the cycle time is longer than expected, then the firm must rely on safety stocks to satisfy customer demand. In either case there are costs associated with variance. The ides is to eliminate variance by equating actual cycle time to the expected cycle time. This may require adjustments in product flows into or out of the organization.
Discuss uncertainty as it relates to the overall logistical performance cycle. Discuss and illustrate how performance cycle variance can be controlled.