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Summary Logistics Management 214

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  • June 22, 2020
  • 96
  • 2019/2020
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By: mandehdisane • 4 year ago

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Aliyana
Chapter 1: Supply Chain Management

What forces are driving the rate of change?
1. Globalisation
 Has led to a more competitively intense economic and geopolitical environment
 Time and distance has become compressed
 The main challenges for supply chains
o Volatility of supply and demand
- Acts of terrorism has implications on the flow of commerce
- Contamination of food products from China can cause an interruption
in the flow of products
- Natural disasters have an effect
o Shorter product life cycles
- Technological companies are at a threat
- Provides inventory management problems for supply chains
o Blurring of traditional boundaries
- To maintain profitability, companies have to outsource

2. Technology
 Major impact on the supply chains as a facilitator of change as companies have
transformed their processes
 Individuals and smaller organisations can connect to the world’s “knowledge pools”
and can create collaboration in supply chains
 Outsourcing has been enhanced by technology
 Flow of commerce has become multidirectional

3. Organisational consolidation

 Large retailers are given special consideration from consumer product companies
 Services that allow retailers more efficiency:
o Scheduled deliveries
o Rainbow pallets
o Advance Shipment Notices (ASN)

,  Retailer may be provided with value-added services such as vendor-managed
inventory (VMI)
 More collaboration is being practiced between organisations in the supply chains to
gain mutual cost savings and improved customer service

4. The empowered consumer
 Impact of the consumer is direct for supply chains because the consumer has placed
increased demands at the retail level for an expanded variety of products and
services
 Due to information, consumers are more educated and empowered
 They have the opportunity to compare prices
 They have a low tolerance for poor quality
 Consumers demand quicker response times and more convenient offerings
 They don’t have loyalty

5. Government policy
 Deregulation of important sectors
o Transportation
o Communication
o Financial institutions

,The Supply Chain Concept
1. Development of the concept
A. Physical distribution concept
 Focused on the outbound side of a firm’s logistics system
 Total systems cost and analysing trade-off scenarios to arrive at the lowest
system cost
B. Integrated logistics management concept
 Added inbound logistics to the outbound logistics of physical distribution
 Global sourcing of materials and supplies for inbound systems was growing in
importance
C. Value chain concept
 Developed as a tool for competitive analysis and strategy
 The more integrated nature of marketing sales, and manufacturing with
logistics is an NB dimension of the value chain
 Includes procurement as an element of logistics
D. Supply chain
 Extended enterprise that crosses the boundaries of an individual firm to span
the related activities of all companies involved
 This extended enterprise should attempt to execute a coordinated two-way
flow
 There are three of these two-way flows:

, Flow Description
Products and related services Customers expect their orders to be
delivered in a timely, reliable, and damage-
free manner; and transportation is critical
to this outcome
International flow Bull whip effect: if there are any long
term intervals between orders, the
members of the supply chain is faced
with a lot of uncertainty about the level
and pattern of demand, which usually
results in higher inventory/stock out
costs.


Sharing of sales information on a “real-
time” basis leads to less uncertainty
Financial/cash flow Supply chain compression = faster cash
flow

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