1. CHAPTER 1
Overview of Logistics

2. Key Terms Big-box retailer Co-branding Container Cost trade-offs
Disintermediation
Economic utility
Form utility
Humanitarian logistics
Landed costs
Logistics
Marketing channels
Materials management
Physical distribution

3. Key Terms Place utility Possession utility Postponement
Sorting function
Stock-keeping units (SKUs)
Stockouts
Sustainable products
Systems approach
Tailored logistics
Time utility
Total cost approach

4. Learning Objectives To discuss the economic impacts of logistics
To define what logistics is
To analyze the increased importance of logistics
To discuss the systems and total cost approaches to logistics

5. Learning Objectives
To expose you to logistical relationships within the firm
To introduce you to marketing channels
To provide a brief overview of activities in the logistics channel
To familiarize you with logistics careers
Marketing concept

6. Economic Impacts of Logistics
Macroeconomic Impacts
Economic Utility
Possession utility
Form utility
Place utility
Time utility
Ownership of products/payment conditions
From bulk, big quantities, up to customer/consumer quantities
Where products are nedeed
The right/nedeed time

7. Better logistics systems and infrastructure – lower costs
Table 1-1: The Cost of the Business Logistics System in Relation to a Country’s Gross Domestic Product (GDP)
Better logistics systems and infrastructure – lower costs

8. 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:

9. The Increased Importance of Logistics
And actual situation?
A Reduction in Economic Regulation
Changes in Consumer Behavior
Technological Advances
The Growing Power of Retailers
Globalization of Trade
Global – regional – local levels
Global products/local products
Customization of products
E-shopping
Positives/negatives

10. The Systems and Total Cost Approaches to Logistics
Systems Approach
Interdependence of company and logistics goals and objectives
Interdependence of functional areas
Stock-keeping units (SKUs)
Interdependence of logistics activities or
Intrafunctional logistics......integrated logistics....SCM

11. Figure 1-1: Control Over the Flow of Inbound and Outbound Movements
Outbound logistics
Inbound logistics

12. 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: integration of all activities into a unified whole that seeks to minimize distribution costs in a manner that supports an organization’s customer service objectives
Level of costs againts customer service level

13. Logistical Relationships within the Firm
Financial capital – working capital, costs, cash-flow, efficiency
Finance
Production
Marketing
Continuous manufacturing - inputs, pressure on costs, standard quality level, stock buffers....
Market requirements – customization, pro-active marketing, good level of customer service.....
Different priorities.....???

14. Logistical Relationships within the Firm
Marketing
Place Decisions
Price Decisions
Landed costs
Product Decisions
Stockouts
Sustainable products
Promotion Decisions
Target markets – customer convenience
Availability of products

15. Marketing Channels Channel members
“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.”
Channel members
Manufacturers
Wholesalers
Retailers

16. Marketing Channels/Key Functions
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

17. 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

18. 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

19. Logistics Careers
Logisticians need to be both a generalist and a specialist
As a generalist, the logistician must understand the relationship between logistics and other corporate functions, both within and outside the firm.
As a specialist, the logistician must understand the relationships between various logistics activities and must have some technical knowledge for various activities.

20. Logistics Careers
“Logistician” highlighted as one on the 50 best careers for the year 2010 and suggested that logistics employment should increase by 20% through 2018.

21. Logistics Careers Examples of Logistics-related jobs include:
Logistics analyst
Consultant
Customer service manager
Purchasing manager
Transportation manager
Warehouse operations manager
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