Logistics Management Week 2

8/8/2019 Logistics Management Week 2

1/31

LOGISTICS MANAGEMENT

Asst. Prof. Dr. Gl Denkta

akar

MARKETING CHANNELS

LOGISTICS AND SUPPLY CHAIN

MANAGEMENT


2/31

To start with.

Logistics and supply chain management are

not new ideas. From the building of the

pyramids to the relief of hunger in Africa, the

principles underpinning the effective flow ofmaterials and information to meet the

requirements of customers have altered a

little

Martin Stopford


3/31

Before discussing the supply chain

management concept, we need to

understand the marketing channels

sets of interdependent organizations involved

in the process of making a product or service

available for use or consumption.

Ownership channel

Manufacturers Wholesalers

Retailers


4/31

PRODUCTION/OPERATIONS

Sample activities: Quality control Detailed production

scheduling Equipment maint. Capacity planning Work measurement

& standards

LOGISTICS

Sampleactivities:Transport Inventory

Orderprocessing

Materials

handling

Interface

activities: Product

scheduling Plant

location Purchasing

MARKETING

Sampleactivities: Promotion Market

research Product

mix Sales force

management

Interfaceactivities:

Customerservicestandards

Pricing Packaging Retail

location

Production-logisticsinterface

Marketing-logisticsinterface

Internal Supply Chain

Relationship of Logistics to

Marketing and Production


5/31

Five Business Systems - Tightly Interconnected

Within The Organization

Measurement Decisions

Manageme

nt Systems

RewardDecisions

StrategicDecisions

TransportationDecisions

SourcingDecisions

InventoryDecisions

LogisticsSystems{

PriceDecisions

Promotion

Decisions

Marketin

gSystems

ProductDecisions

Place (How,where, how

much) }ProductionSchedulingDecisions

ProductionCapacityDecisions

Shop FloorDecisions

Manufacturing Systems}

ProductDesign

Decisions

ProcessDesign

Decisions EngineeringSystems}


6/31

Product

PricePromotion

Place-Customer

service levels

Inventory

carrying costs

Lot quantity

costs Order processing

and information

costs

Transport

costs

Warehousing

costs

Marke

ting

Lo

gist

ics

Relationship of Logistics to Marketing


7/31

Marketing Channels

Negotiations channel Buy and sell agreements are reached

Financing channel Payments for goods

Promotions channel Promoting a new or existing product

Logistics channel Moving and storing product

throughout the channel


8/31

Channel Intermediaries/

Facilitators Ownership channel Banks, public warehouses

Negotiations channel

Brokers Financing channel

Banks, insurance companies

Promotions channel Advertising agencies, public relations agencies

Logistics channel Freight forwarders


9/31

Main differences between marketing

channels and the supply chain

Reengineering: While the marketing channelappears to concentrate on existing products,the supply chain includes more room for

considering the reengineering of productsand processes.

With the supply chain concept, it is desirable

to negotiate engineering and design changesin products to make them more compatiblewith the needs of other chain members.


10/31

Inventory management:

Inventories have shifted from push to pull

systems. Push strategy:

Manufacturers used long production runs to gain

efficiencies of scale

This minimizes unit costs and optimizing utilization of

their production and distribution assets.

Although the push strategy can strengthenmanufacturers profits, it also results in excess

inventory and inefficient supply chain management


11/31

Push to pull systems

Under the pull scenario, the system listensto the customer through the retailer,transmits preferences back up the

information pipeline and quickly respondswith the merchandise demanded.

The objective across the supply chain is toreduce the inventory buffer for all trading

partners.


12/31

Any strategy that comes to your

mind? A postponement strategy aims at delaying

some supply chain activities until customer

demand is revealed in order to maintain both

low system wide cost and fast response.

Logistics postponement

Products in semi-finished forms and can be

customized quickly in production facilitiesclose to customers


13/31

SUPPLY CHAIN MANAGEMENT DEFINITION:

Supply chain management (SCM) refers to the

integration of both transportation and logistics into a

seamless flow of physical goods, associated information

and funds as goods move from raw materials sourcing tothe final delivery of final products to consumers.


14/31

Some more definitions..SCM creates value through each of its steps,

which take place across organizational boundaries

as required by the market.

The supply chain includes all participants in the

transportation and commercial transactions of

trade.


15/31

Some more definitions..

Supply chain management is

the systemic, strategic coordination of the

traditional business functions and the tactics

across these business functions within aparticular company and across businesses in

the supply chain, for the purposes of improving

the long-term performance of the individual

companies and the supply chain as a whole.


16/31

What is the difference?

Supply chain management is a wider concept thanlogistics.

Logistics is essentially a planning orientation andframework that seeks to create a single plan for theflow of product and information through a business.

Supply chain management builds upon this framework

and seeks to achieve linkage and coordinationbetween the processes of other entities in the pipelinesuch as suppliers, customers and the organizationitself.


17/31


18/31

Activity fraActivity fra

Evolution of Supply Chain Management


19/31

How shipping affects international

logistics and supply chains?

1)During the first stage of supply chain

evolution (fragmentation to physical

distribution), international maritime

industry restricted its activities to sea leg,concentrating on operating vessels, fleet

scheduling and stowage planning (these

were invisible to the shipper).


20/31

How shipping affects international

logistics and supply chains?

2)With the advent of the second stage

(integrated logistics management), the

shipping industry started offer through

transport services including thedevelopment of intermodal transport.

3) The third stage of supply chain

management has seen the shippingindustry becoming more integrated into the

shippers supply chain.

IN WHAT WAYS AND HOW?


21/31

Different Supply Chain Configurations


22/31

Supply Chain - Major Decisions

Location Decisions

Production Decisions

Inventory Decisions

Transportation Decisions

All 4 decisions mentioned above are interlinked and arecritical to the success of a modern organization. To make asupply chain successful one needs to take all location,production, inventory & transportation decisions based on

facts providing concrete trade off between cost & service


23/31

Supply Chain Schematic


24/31

Successful Supply Chains

have an enterprise-to-enterprise point ofview

a systems approach across allorganizations in the supply chain

Companies recognize interdependencies(coordination)

Goals and objectives are compatible


25/31

SUPPLY CHAIN ELEMENTS

Supply Chain Design

Resource Acquisition Long Term Planning (1 Year ++)

Strategic

Production/ Distribution Planning Resource Allocation

Medium Term Planning (Qtrly,Monthly)Tactical

Shipment Scheduling

Resource Scheduling

Short Term Planning (Weekly,Daily)Operational


26/31

Globalization of Supply

Chains Increasing globalization Lower priced materials and labor

Global perspective of companies

Development of global competition

Extremely difficult to execute dueto differences

Cultural, economic, and technological

Political, spatial, and logistical


27/31

How long is the supply chain? For many firms, the supply chain extends from their suppliers

suppliers to their customers customers and beyond.

In the textile and apparel industry, a company like Levis maymanage a supply chain consisting of:

A fiber provider

A yarn manufacturer A textile manufacturer A clothing design firm A textile launderer

Distributors Retailers Firms supplying transportation, information or distribution

services to any of Levis partners in the supply chain.


28/31

Supply

Chain forMilk

Products

S l h i


29/31

Supply chain:

structure and tieringSupply chain can be fairly

complex. The supply

chain for a car

manufacturer includes

hundreds of suppliers,

dozens of manufacturing

plants (for parts) andassembly plants (for

cars), dealers, direct

business customers,

wholesalers, customers,

and support functionssuch as product

engineering and

purchasing.


30/31

Barriers to Supply Chain

Management Regulatory and political

considerations

Lack of top managementcommitment

Reluctance to share, or use,

relevant data

Incompatible information systems

Incompatible corporate cultures


31/31

Thats all for today

Thanksss

Documents

Logistics Management Week 2