Summary Logistics and Supply Chain Management

The process of planning, implementing, and controlling the efficient, cost-effective flow and storage of goods, services, and related information, from point of origin to point of consumption, for the purpose of conforming to customer requirements. • Components of an Integrated Logistics System – Physical Supply: links suppliers to operations process – Internal Operations: manages in-process material flow – Physical Distribution: links operations process to customers • A philosophy that describes how organizations should manage their supply chains to achieve strategic advantage • The objective is to synchronize requirements of the final customer with the flow of materials and information along the supply chain. The goal is to eliminate variability and reach a balance between high customer service and low cost SCM: the need to reduce variability or the impact of variability on the supply chain • Supply network variability – late deliveries: weather,equipment breakdown – quality problems • Manufacturing process variability – machine reliability and equipment failure – changeovers / setups / part expediting – design and quality problems • Customer network variability – cancellations and irregular orders – equipment failure – scheduling