1. Sustainable Supply Chain Management
Lecturers: Radim Lenort, David Holman, David Staš
Summer School 2015
ŠKODA AUTO University
Mladá Boleslav
Czech Republic

2. Lecture Content Logistics management Supply chain management
New trends in supply chain management
Sustainable supply chain management

3. Logistics Management
In order to understand logistics management, we can use the following mini-test:
How long does it take (according to the European average) to deliver all materials required for production of a fluorescent lamp from suppliers to the manufacturer, production of semi-products, assembly of the lamp, its packing, delivery to distribution network, sale, unpacking and fitting into a ceiling?
a) 50 min
b) 22 h
c) 5 months and 29 days
d) 6 months

4. Logistics Management
Definition of the Council of Supply Chain Management Professionals:
Logistics management is the process of planning, implementing, and controlling the efficient, effective flow and storage of goods (materials, semi-products, finished products), services, and related information from point of origin to point of consumption for the purpose of satisfying customer requirements.
Popular definition “7-Rs”:
Logistics deals with the delivery:
of the right product
in the right quantity
at the right time
in the right quality
at the right place
for the right customer
at the right cost

5. Logistics Management
Basic principles of logistics management make reaching of logistics goals possible:
Use of a systems approach:
Logistics chain should be optimised as a whole, through integration and coordination its parts;
It rejects optimisation of individual parts because optimal decisions obtained in that way are inconsistent.
Use of a whole cost concept:
Costs arising in logistics chain should be observed as a whole;
In the opposite case, decrease of costs in one area can lead to their much greater increase in another area.

6. Supply Chain Management
Material Warehouse
Semi Products Warehouse
Products Warehouse
Materials from Suppliers
Products to Customers
Semi Products Manufacturing
Products Manufacturing
Material Handling
Production Planning and Control
Physical Distribution
Integrated Logistics Management

7. Supply Chain Management
Producer
Semi Products Manufacturing
Products Manufacturing
Material Warehouse
Semi Products Warehouse
Products Warehouse
Materials from Suppliers
Products to Customers

8. Supply Chain Management
Suppliers
Producers
Wholesalers
Retailers
Customers
Supply Chain Management
Definition of the Council of Supply Chain Management Professionals:
Supply chain management encompasses the logistics management activities and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers and customers.

9. New Trends in Supply Chain Management
The recent leading trend is lean supply chain management:
The main idea of leanness is an elimination of all supply chain activities, which don't bring a value to products = they represent waste:
Expensive inventory
Unnecessary capacities
Duplicate supply chain links
Main goal is to achieve highly efficient supply chain = to minimise costs

10. New Trends in Supply Chain Management
To achieve leanness a relative business environment stability is necessary
Unfortunately, the recent environment is unpredictable and changeable
Many crisis situations appear more and more frequently:
Tsunami, Japan, March 2011, Toyota Motor company
Suppliers and productions shutdown over the world
52% decline of the operational profit in the fourth quarter = about 350 millions EUR

11. New Trends in Supply Chain Management
Two new trends appear as a response to this situation:
Agile supply chain management – an ability of a supply chain to respond to major and unpredictable changes in the business environment very quickly
Resilient supply chain management – an ability of a supply chain to turn back to original performance after a serious disruption

12. New Trends in Supply Chain Management
The next recent and very important trends:
Green supply chain management – an ability of a supply chain to minimise negative impact of logistics activities on environment
Sustainable supply chain management – an integration of the aforementioned approaches

13. Sustainable Supply Chain Management
It is an ability of a supply chain to balance its economic, environmental and social performance
Environmental Performance
Social Performance
Good?
Economic Performance
Sustainability
Best
Better

14. Sustainable Supply Chain Management
Volkswagen sustainability strategy:
Strategic goal: By 2018, we aim to be the world’s most successful, fascinating and sustainable automotive manufacturer
Key action areas: Economy, People, Environment

15. Sustainable Supply Chain Management
Strategic goals of the key action areas by 2018:
Economy:
Leader in customer satisfaction
Group return on sales before tax lower than 8%
Annual sales of more then 10 million vehicles
People:
Top employer in the automotive sector
Environment:
Reduce energy and water consumption, waste and emissions per unit produced across the Group by 25%

16. Thanks for your attention