1. © Pearson Education, Inc. publishing as Prentice Hall
Learning Objectives
To understand the economic impacts of logistics
To learn what logistics is
To learn about the increased importance of logistics
To understand the systems and total cost approaches to logistics
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2. © Pearson Education, Inc. publishing as Prentice Hall
Learning Objectives
To expose you to logistical relationships within the firm
To learn about marketing channels
To provide a brief overview of activities in the logistics channel
To familiarize you with logistics careers
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3. © Pearson Education, Inc. publishing as Prentice Hall
Key Terms
Cost trade-offs
Disintermediation
Economic utility
Form utility
Landed costs
Logistics
Marketing channels
Mass logistics
Materials management
Physical distribution
Place utility
Possession utility
Postponement
Power retailer
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Key Terms
Sorting function
Stock-keeping units (SKUs)
Stockouts
Sustainable products
Systems approach
Tailored logistics
Time utility
Total cost approach
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5. An Overview of Logistics
CHAPTER 1
An Overview of Logistics
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6. Economic Impacts of Logistics
Macroeconomic Impacts
Economic Utility
Possession utility
Form utility
Place utility
Time utility
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Table 1-1: The Cost of the Business Logistics System in Relation to a Country’s Gross Domestic Product (GDP)
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Logistics: What It Is
Council of Logistics Management definition:
“Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.”
Source:
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9. The Increased Importance of Logistics
A Reduction in Economic Regulation
Changes in Consumer Behavior
Technological Advances
The Growing Power of Retailers
Globalization of Trade
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10. The Systems and Total Cost Approaches to Logistics
Systems Approach
Interdependence of company and logistics goals
Interdependence of functional areas
Stock-keeping units (SKUs)
Interdependence of logistics activities or
Intrafunctional logistics
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11. Figure 1-1: Control Over the Flow of Inbound and Outbound Movements
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Figure 1-2
The Utilization of Logistics Service as a Major Selling Point
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13. The Systems and Total Cost Approaches to Logistics
Cost trade-offs: changes to one activity cause some costs to increase and others to decrease
Total Logistics Concept: to find the lowest total cost that supports an organization’s customer service requirements
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14. Logistical Relationships within the Firm
Finance
Production
Marketing
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15. Logistical Relationships within the Firm
Marketing
Place Decisions
Price Decisions
Landed costs
Product Decisions
Stockouts
Promotion Decisions
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Marketing Channels
“set of institutions necessary to transfer the title to goods and to move goods from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.”
Source: American Marketing Association Dictionary,
Channel members
Manufacturers
Wholesalers
Retailers
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Marketing Channels
Ownership channel
Covers movement of the title to the goods
Negotiations channel
Buy and sell agreements are reached
Financing channel
Payments for goods
Promotions channel
Promoting a new or existing product
Logistics channel
Moving and storing product throughout the channel
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18. Channel Intermediaries/ Facilitators
Ownership channel
Banks, finance companies
Negotiations channel
Brokers
Financing channel
Banks, insurance companies, finance companies
Promotions channel
Advertising agencies, public relations agencies
Logistics channel
Freight forwarders
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19. Activities in the Logistical Channel
Customer service
Facility location decisions
Inventory management
Order management
Procurement
Transportation management
Demand forecasting
International logistics
Materials handling
Packaging
Reverse logistics
Warehousing management
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20. Responsibilities of Logistics Managers
A specialist
Freight rates
Warehouse layouts
Inventory analysis
Production
Purchasing
Transportation law
A generalist
Understands functional relationships
Relates logistics to other firm operations, suppliers, customers
Controls large expenditures
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Logistics Careers
Most business organizations are potential employers
“Logistician” highlighted as one on the 50 best careers for the year 2010
Source: U.S. News & World Report
Career paths for the two most recent CEO’s of Wal-Mart included assignments in logistics and distribution.
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22. Logistics Professionalism
Professional Organizations Dedicated to Advancing the Professional Knowledge of their members:
APICS – The Association for Operations Management (
American Society of Transportation and Logistics (AST&L) (
Council of Supply Chain Management Professionals (
Delta Nu Alpha (DNA) (
International Society of Logistics (SOLE) (
Supply Chain & Logistics Association Canada (SCL) (
The Chartered Institute of Logistics and Transport in the UK – CILT (UK) (
Warehousing Education and Research Council (WERC) (
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Copyright Notice
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