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Supply Chain Management

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Presentation on theme: "Supply Chain Management"— Presentation transcript:

1 Supply Chain Management

2 Supply Chain Management
Legends of Logistics Dabbawala’s (Video)

3 Supply Chain Management
Logistics is “The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of customer Satisfaction” (council of logistics management)

4 Supply Chain Management
Business Logistics The planning, implementation, & control of the efficient & effective flow and storage of goods, services, & related information from point of origin to point of use or consumption in order to meet customer requirements Military Logistics The design & integration of all aspects of support for the operational capability of the military forces (deployed or in garrison) and their equipment to ensure readiness, reliability, & efficiency

5 Supply Chain Management
Event Logistics The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources for an event to take place and to efficiently withdraw after the event

6 Supply Chain Management
Logistics has existed since the beginning of civilization. Raw material and finished products had always to be moved, though on a small scale. Things began changing with the advance in transportation. Population began moving from rural to urban areas and to business centre. No longer did people live near production centre, nor did production take place near residence centre. The geographical distance between the production point and consumption point increased. And logistics gained importance.

7 Supply Chain Management
THE PURPOSE OF LOGISTICS SYSTEM Right quantities of the Right goods to the Right places at the Right time in the Right condition at the Right cost.

8 Supply Chain Management
A Simple Logistics Channel Market Customers Raw materials supply point Production facility Market Customers Raw materials supply point Market Customers Product Flow

9 Supply Chain Management A Multi-Echelon Logistics Channel
Retailer Raw materials supply point Warehouse Retailer Retailer Raw materials supply point Production facility Retailer Raw materials supply point Warehouse Retailer Retailer Product Flow

10 Supply Chain Management
Two Main Types: Inbound logistics:  The management of materials from suppliers and vendors into production processes or storage facilities. Outbound Logistics:  The process related to the movement and storage of products from the end of the production line to the end user.

11 Supply Chain Management
Steps toward improving Logistics performance Make transport a customer service activity instead of a cost Reduce your stock pipeline to cut costs and improve service (go easy by low inventory) Pick as soon as you can (pick once, pick right and cut the cost time and error) Is everything you are doing is really necessary

12 Supply Chain Management
Transportation: Transport or transportation is the movement of people and goods from one place to another. Industries which have the business of providing actual transport, transport of people or goods and services referred to as transport industries.

13 Supply Chain Management
Basic modes of transport By Air By Road By Train By Sea

14 Supply Chain Management
Considerations in Transportation Cost / Rates Reliability Safety / Damages Insurance Speed / Time Mode of Transportation Routes / sectors Vehicles type Urgency / Priority In-house / Outsource

15 Supply Chain Management

16 Supply Chain Management
3rd Party Logistic Service providers “Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function.” -- Simchi-Levi (2000)

17 Supply Chain Management
Characteristics of 3PL Perform outsourced logistics activities Process management / Multiple activities More customized services Long-term commitments (1~ 3 years)

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Advantages Cost reduction Focus on core competency Improved efficiency, service and flexibility Disadvantages Loss of control Impact on in-house workforce

19 Supply Chain Management
Current State -- Market Size 3PL market is growing ( $ Billions )

20 Supply Chain Management
Current use of 3PL by industry Industry Percentage of 3PL use in different industries Computer Consumer Retail Chemical Medical Auto Source "What's ahead for 3PLs“ Modern Materials Handling, April, 2000

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