1. Organizing and Analyzing Logistics Systems
CHAPTER 14
Organizing and Analyzing Logistics Systems

2. Learning Objectives
To examine the problems and opportunities involved in systems analysis
To relate the importance of industry standards to systems analysis
To discuss the steps involved in redesigning a logistics system
To examine a number of organizational alternatives
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3. Learning Objectives
To describe a number of techniques for achieving logistics coordination and integration
To distinguish between centralized and decentralized logistics organizations
To distinguish between logistics within the firm and outsourcing logistics activities
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4. Logistics Systems: Analysis, Design, and Integration
Key Terms
Benchmarking
Channels audit
Competition audit
Customer audit direct product profitability (DPP) analysis
Key Terms
Environmental sensitivity audit
Existing facilities audit
Integrated service providers
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5. Logistics Systems: Analysis, Design, and Integration
Key Terms
Linking-pin organization
Matrix management
Product audit
Simulation
System constraints
Key Terms
Systems analysis
Third-party, or contract, logistics
Unified department organization
Vendor audit
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6. What Is Systems Analysis?
Systems analysis refers to the orderly and planned observation of one or more segments in the logistics network or supply chain to determine how well each segment functions
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7. General Questions Why do we perform each task?
What value is added by it?
Why are the tasks performed in the order they are?
Can we alter the sequence of the processing steps to increase efficiency?
Why are the tasks performed by a particular group or individual?
Could others perform this task?
Is there a better way for the system to operate?
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8. Problems in Systems Analysis
Multiple business functions are impacted
There are trade-offs among conflicting objectives
Logistics system impacts are difficult to precisely evaluate
There are business issues unique to each logistics system
Quantitative analysis is essential for intelligent decisions
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9. Figure 14-1: A Scoring Checklist Used to Determine Logistics Planning or Strategy Study
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10. Partial Systems Analysis
Customer profitability analysis
Warehousing productivity analysis
Transportation cost analysis
Consolidation analysis
Direct product profitability analysis
Benchmarking
Industry standards analysis
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11. Logistics System Design
Establishing objectives and constraints
Quality programs
World-class logistics programs
System constraints
Organization of the study team
Data collection
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12. Logistics System Design (continued)
Product audit
Existing facilities audit
Vendor audit
Customer audit
Channels audit
Competition audit
Environmental sensitivity audit
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13. Figure 14-7: Flexibility Makes It Easier to Work Together
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14. Logistics System Design (continued)
Analysis of the data
Simulation
Design implementation
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15. Figure 14-8: Schematic Drawing of Automated Sorting System
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16. Systems Integration: Logistics within the Firm
Dispersion of logistics activities
Achieving coordination
The status quo
The linking-pin concept
Linking-pin organization
A unified department
Unified department organization
Centralized versus decentralized
Matrix management
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17. Figure 14-9: Becton Dickinson’s Worldwide Sources
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18. Systems Integration: Logistics Activities Outside the Firm
Third-party, or contract, logistics
Integrated service providers
Monitoring third-party performance
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