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Summary Logistics And Supply Chain Management
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Logistics and Supply Chain Management SummaryTable of Contents
Chapter 1 .............................................................................................................................................................................. 2
Chapter 2 .............................................................................................................................................................................. 5
Chapter 3 .............................................................................................................................................................................. 9
Chapter 4: Supply Chain strategies (ppt + textbook pg 57 – 76) ......................................................................................... 16
Chapter 5: Transport in Supply chains (ppt + textbook pg. 103 – 116) ............................................................................... 23
Chapter 7: Logistics service providers (ppt + textbook pg. 131-141) .................................................................................. 29
Chapter 8: Procurement (PPT + Textbook pg. 142 – 166 + extra content added) ............................................................... 33
Chapter 9: Inventory Management .................................................................................................................................... 40
The importance of inventory management. ................................................................................................................... 40
Inventory Turnover ..................................................................................................................................................... 40
The EOQ model. .............................................................................................................................................................. 40
Inventory control system ................................................................................................................................................ 42
Supply chain inventory management. ............................................................................................................................ 43
Matching inventory policy with inventory type. ............................................................................................................. 44
Inventory reduction principle. ........................................................................................................................................ 45
The economic order quantity EOQ model. ..................................................................................................................... 46
BOM concept. ................................................................................................................................................................. 47
Chapter 10 & 11: Warehousing materials handling & Technology in the supply chain ...................................................... 48
1. Warehousing in global supply chains ...................................................................................................................... 48
2. Warehouse layout and design ................................................................................................................................ 50
3. Warehouse management systems .......................................................................................................................... 51
4. Materials handling and storage .............................................................................................................................. 53
5. Work organization and job design .......................................................................................................................... 57
6. Additional technology aspects ................................................................................................................................ 58
Chapter 14: Sustainable logistics and supply chain systems ............................................................................................... 60
1. Introduction ............................................................................................................................................................ 60
2. The link between economic growth and transport growth .................................................................................... 62
3. The rule of ‘scale’ in logistics and SCM ................................................................................................................... 62
4. Efficiency solutions ................................................................................................................................................. 63
Chapter 15: Reverse logistics .............................................................................................................................................. 65
,Chapter 1
Logistics and supply chain context
The evolution of logistics and supply chain management was triggered by 6 key developments:
- Reduced transport intensity of frights
In the past, bulky raw materials dominated international trade. Now, in-process and finished products are
dominating it. Manufacturers try and increase the value-to-volume ratio of products being shipped. For
many individuals’ shipments increased value/decreased volume means lower transport cost sensitivity.
The replacement of physical products by virtual products is referred to as material substitution.
- Falling product prices
In many markets, increased competition and falling marketplace prices have forced numerous companies to
reduce costs. This has forced companies to focus on other areas where savings can be made, and the
storage and movement of inventory is a key area in this regard.
- Deregulation of transport
There are five modes of transport: air, road, water, rail, and pipeline (internet is the sixth). Many transport
markets have been deregulated by governments lately; the essence of effective deregulation is that by
removing unnecessary berries to competition, markets become more contestable, and prices should come
down and service improves.
In reality, markets have been somewhat different, with private monopolies replacing public ones, but in long
run deregulation has positive effect.
- Productivity improvement
Containerization: containers can be stacked on top of each other onboard the ship, freight could now move
from origin to destination across many modes and services with greater ease of handling. Reduced cost of
transporting freight by maritime transport and significantly improved its efficiency. Containerization spread
to other modes and various alliances were formed between combinations of transport companies.
Technology was improved: online tracking and tracing, radio frequency identification (RFID), barcoding,
internet of things (IOT), blockchain, and artificial intelligence (AI).
- Emphasis on inventory reduction
Many organizations have become increasingly aware of the fact that often fund are tied up in unnecessary
inventory. The various functions in which inventory played a key role, for example transport, warehousing,
purchasing, and marketing, were usually considered by managers to be separate and distinct. However,
firms began to relaise that cost saving and significant efficiency gains could be harnessed from more
integrated and focused management thinkers.
Increased market competition and customer requirements also led to necessary improvements in the
management of inventory as an essential competitive weapon. Cost savings were identified through
eliminating unnecessary inventory and just-in-time (JIT) deliveries became normal operating practice in
many industries. Ability to easily respond to changing demand conditions.
, - Changes in company structure
Many companies have become less vertically integrated and more specialised. Outsourcing has become
more common, with suppliers playing amore central role for many manufactures.
Many companies have also come to realise that so-called functional or silo-based thinking will hinder the
overall performance of the company and they have as result endeavoured to ensure that the various
functions and activities across the company are integrated more closely.
Competition based on time, order to delivery time, has become a key success factor (KSF) in many markets.
CONCLUSION: All of the above 6 trends, while they emerged independently, have both placed an increased emphasis
on the role of transport and inventory, and have led to improvement in the way freight is handled and moved around
the world. They led to what is often termed the supply chain revolution.
Logistics: the process of planning, implementing and controlling procedures for the efficient and effective transportation
and storage of goods including services, and related information from the point of origin to the point of consumption for
the purpose of conforming to customer requirements.
- Logistics involves getting:
The right product
The right way
In the right quality and right quantity
In the right place and the right time
For the right customer at the right cost.
Logistics encapsulates much more than ‘trucks and sheds’. It is primarily concerned with optimizing flow within the
organization and the mission of logistics management is to serve the customer in the most cost-effective way.
Three definitions of supply chain:
- A supply chain is a system of organizations, people, activities, people, information, and resources involved in
moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw
materials and components into a finished product that is delivered to the end customer.
- A supply chain is a network of connected and interdepended organizations mutually and co-operatively working
together to control, manage, and improve the flow of materials, resources (money + people + equipment) and
information from suppliers to end users.
- The supply chain is the network of organizations that are involved, through upstream and downstream linkages,
in the different processes and activities that produce value in the form of products and services in the hands of
the ultimate consumer.
, Supply chain management is the management of a network of relationship within a firm and between interdependent
organization and business units consisting of material supplier, purchasing, production facilities, logistics, marketing, and
related systems that facilitate the forward and reverse flow of materials, services, finance, and information from the
original producer to final customer with the benefits of adding value, maximising profitability through efficiencies and
achieving customer satisfaction.
There are different names of the views, in total there are 4.
Logistics and supply chain management are not functioning isolated, they have links with other departments and thus it
has become a strategic asset.
Logistics and supply chain management can be used to generate both cost savings and service enhancements.
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