1. Logistical Management
Chapter 6: Operational Integration

2. Integrative Management Value Proposition
Economic Value
Market Value
Relevancy Value
Lowest Total Landed Cost
Economy-of-Scale Efficiency
Product/ Service Creation
Attractive Assortment
Economy-of-Scope Effectiveness
Product/ Service Presentation
Customization
Segmental Diversity
Product/ Service Positioning
Procurement/ Manufacturing Strategy
Market/ Distribution Strategy
Supply Chain Strategy
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

3. Internal Integration The Great Divide Procurement Distribution and and
Manufacturing
Integration
Distribution
and
Marketing
Integration
The challenge of managing across functional boundaries.
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

4. Supply Chain Flows Resource Base End Customers
Product- Service Value Flow
Market Accommodation Flow
Information Flow
Cash Flow
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

5. Supply Chain FrameworkB A E N D C U S T O M R
PRODUCT-SERVICE VALUE FLOW
MARKET ACCOMMODATION FLOW
BEHAVIORAL CONTEXT
Relationship
PLANNING AND CONTROL CONTEXT
Measurement
Technology and Planning
OPERATIONAL CONTEXT
Material and
Service Supplier
Integration
Internal
Operations
Customer
Integration
INFORMATION FLOW
FINANCIAL FLOW
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

6. Supply Chain Context, Competencies and Supportive Capabilities
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

7. Factors Increasing Likelihood of Supply Chain Relationship Success
Retailers
High level of cooperation
Similarity of goals/ objectives
Clear communications
Senior management support
Control of inventory
Manufacturers
Information sharing
Recognition of mutual benefits
Controlled implementation
Joint task force
Commitment/ resource dedication
Benefits realization
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

8. Common Obstacles Confronted When Creating Supply Chain Relationships
Retailers
Low-volume stockkeeping units (SKU’s)
Resistance of manufacturers to change
Information systems
Noncompatible data formats
Manufacturers
Lack of communication
Trust level
Noncompatible systems
Understanding of technical issues
Resistance of customers to change
Readiness of retailers
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

9. 1997 Global Logistics Expenditures
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

10. 1997 Global Logistics Expenditures (cont.)
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

11. Characteristics of Global Development
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

12. International Logistics Documentation
Export irrevocable commercial letter of credit. A contract between an importer and a bank that transfers liability or paying the exporter from the importer to the (supposedly more creditworthy) importer’s bank.
Bank draft (or bill of exchange). A means of payment for an import-export transaction. Two types exist: transaction payable on sight with proper documents (sight draft), and transaction payable at some fixed time after acceptance of proper documents (time draft). Either type or draft accompanied by instructions and other documents (but no letter of credit) are a documentary draft.
Bill of lading. Issued by the shipping company or its agent as evidence of a contract for shipping the merchandise and as a claim to ownership of the goods.
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

13. International Logistics Documentation (cont.)
Combined transport document. May replace the bill of lading if goods are shipped by air (airway bill) or by more than one mode of transportation.
Commercial invoice. A document written by the exporter to precisely describe the goods and the terms of sale (similar to a shipping invoice used in domestic shipments).
Insurance certificate. Explains what type of coverage is utilized (fire, theft, water), the name of the insurer, and the exporter whose property is being insured.
Certificate of origin. Denotes the country in which the goods were produced in order to assess tariffs and other government-imposed restrictions on trade.
Supply Chain Logistics Management, First Edition. Bowersox, Closs, and Cooper.
Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.