Chapter 1 (Book)
Shorter product life cycles are a result of the ability of products to be duplicated quickly.
- Duplicated products face a faster reduction in demand.
To maintain financial viability, companies may outsource activities.
- There’s a growth in outsourcing.
A SKU is like a barcode for companies.
The bullwhip effect is defined as the demand distortion that travels upstream in the supply chain.
- A consumer may ask for 10 products, a retailer may order 15 products, and the
manufacturer may make 20 just to be safe.
The integrated logistics management concept adds inbound logistics to the outbound logistics of
physical distributions.
Supply chain management is the art and science of integrating the flows of products,
information and financials through the entire supply pipeline from the vendor’s vendor to the
customers’ customers and consumers.
- A supply chain is an extended enterprise that usually crosses the boundaries of several
individual firms to coordinate the related flows of all the companies.
The critical outcomes of the supply chain are “to deliver the right product at the right time, in the
right quantity, and quality, at the right cost, and to the right destination”.
Efficiency is cost, and effectiveness is value.
JIT is the same as lean logistics.
3PL = firms that manage and/or provide logistics services on behalf of their clients
4PL = firms that provide broader scope of services to help manage elements of the supply chain
Powerpoint Chapter 1
Logistics is the process of planning, implementing, and controlling the efficient and effective
flow and storage of raw materials, in process inventory, finished goods, related services and
information from point to origin to point of consumption for the purpose of conforming to
customer and organizational requirements.
The logistics pipeline looks as follows:
- Vendors → sourcing → inbound storage / transport → operations → outbound storage /
transport → consumer distribution → customers
Material management is inbound, physical distribution is outbound.
The goal of logistics is to provide an acceptable level of customer service at the lowest possible
total cost.
,The (customer service) goal of logistics is to get the Right products, to the Right people, in the
Right place, in the Right quantity, in the Right condition, at the Right time, for the Right price.
- 7 Rs.
3 key logistics activities:
1. Transportation
2. Storage
3. Order processing (outbound) / purchasing (inbound)
Logistics gives access to new markets, increases economies of scale, increases competition,
reduces prices to the consumer, increases consumer choice and allows companies to use
comparative advantage to gain competitive advantage.
5 major external forces:
1. Globalization: globalization creates more economic and political risk, shorter product life
cycle, and the blurring of traditional organizational boundaries.
2. Technology: a facilitator of internal process and supply chain information. It is also a
major force in changing the dynamics of the marketplace.
3. Organizational consolidation: during the 80s and 90s economic power and the driving
force in supply chains shifted from product manufacturers to retail end of supply chain.
4. Empowered consumer: consumers are empowered by exponentially expanded access to
product sources and related information and increases buying power due to high income
levels.
5. Government policy & regulation: more competitive environment is a result of the
deregulation of several important sectors in the US in the 80s and 90s.
Supply chain management is the art and science of integrating the flows of products,
information and financials through the entire supply pipeline from the supplier’s supplier to the
customer’s customer.
SCM crosses company boundaries, aims to make the entire channel operate as efficiently as
possible, substitutes information for inventory all along the chain and creates win/win
relationships with customers and suppliers.
There are several supply chain flows:
- Product flow: physical movement of goods and materials
- Information flow: enabling physical flow of products, decision making, supply chain
collaborations
- Cash flow: management of working capital
- Demand flow: detect and understand demand signals, synchronize demand vs. supply
There are several supply chain issues, such as: supply chain network, complexity, inventory
deployment, information, cost and value, organizational relationships, performance
, measurement, technology, transportation management, supply chain security and talent
management.
Chapter 2 (Book)
Reduced order cycle time has become an important part of supply chain management since it
can lead to lower inventory levels for customers, improved cash flow, and lower current assets
and accounts receivable.
Global companies usually are faced with more complex and longer supply chains that challenge
them in terms of efficiency, effectiveness and execution.
Successful global companies have transformed their supply chains as economic and political
circumstances have changed to enable them to deliver best cost and value to the customer.
Absolute advantage: the ability of an actor to produce more of a good than a competitor.
Comparative advantage: the ability of an actor to produce a good for a lower opportunity cost.
Powerpoint Chapter 2
Rationale for global trade:
- Advantage: lower cost and/or access to items not available locally
- Disadvantage: differences in the cost of producing products in different countries
Contributing factors for global flows and trade: population size & distribution, urbanization, land
and resources, technology and information, globalized economy.
Global markets and strategy: supply chain perspective:
1. Strategically sourcing materials and components worldwide
2. Selecting global locations for key supply depots and DCs
3. Evaluating transportation alternatives and channel intermediaries
4. Understanding governmental influences on global SC flows
5. Examining opportunities for collaboration with 3PLs or 4PLs
Global markets and strategy: customer service perspective
1. Standardization to reduce complexity must maintain some customization
2. Global competition often reduces the product life cycle
3. Organizational structures and business models change with more outsourcing
4. Globalization introduces more volatility and complexity
Chapter 3 (Book)
Supply chain management is an extended set of enterprises from the supplier’s supplier to the
customer’s customer but the flow of materials and related services enabled by good logistics
has to be managed carefully for efficiency (cost) and effectiveness (service).
Business logistics is the part of the supply chain process that plans, implements and controls
the efficient, effective flow and storage of goods, services, and related information from point of
origin to point of consumption in order to meet customer requirements.
