The supply chain is simply another way of saying “the whole process of business.” MODULE 4 LOGISTICS MANAGEMENT Seminar FORXTROT SUPPLY CHAIN MANAGEMENT AND DEMAND FORECASTING

SCOPE  The Immediate Supply Chain  The SC/Logistics Mission  Key Activities/Processes  Supply Chain Framework  The Logistics Strategy, Objectives & Formulation  Logistics/Supply Chain Strategy and Planning  Definitions

Supply Chain Management is the integration of all activities associated with the flow and transformation of goods, as well as information flows, to achieve a sustainable competitive advantage. - Handfield and Nichols Supply Chain Management - A supply chain is the network of organizations—be they military, government, or private sector— involved in creating and delivering a product or service to a customer or consumer. - RAND Research Logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, from the point of origin to point of consumption. - Council of Logistics Management

Getting the right goods or services to the right place, at the right time, and in the desired condition at the lowest cost and highest return on investment. The SC/Logistics Mission

The Immediate Supply Chain for an Individual Firm

The Immediate Supply Chain for an Individual Firm

Key Activities/Processes Primary - Setting customer service goals - Transportation - Inventory management - Location Secondary, or supporting - Warehousing - Materials handling - Acquisition (purchasing) - Protective packaging - Product scheduling - Order processing

Supply Chain Framework Logistics Strategy Triangle

Logistics/Supply Chain Strategy and Planning “If you don’t know where you want to go, any path will do.”

Corporate StrategyLogistics Strategy Strategy formulation begins withThe objectives of logistics strategy are: a. Assessing needs, strengths, and weaknesses of the 4 major components: - Minimize cost - Minimize investment - Maximize customer service - customers - suppliers - competitors - the company itself Levels of logistical planning: - Strategic -Tactical -Operational b. "Visioning" where counter - intuitive, unheard of, and unconventional strategies are considered. The 4 problem areas of supply chain planning - Customer service levels -Facility location -Inventory decisions -Transportation decisions Use ROLA Recall the Logistics Strategy Triangle

Logistics Strategy When to plan? - No distribution network currently exists. - There has been no re-evaluation in 5 years. - When costs are changing rapidly, especially transport & inventory. - When markets have shifted. - When current distribution economics encourage shifts. - When there has been a major policy shift in logistics such as in price, customer service, or investment level.

Logistics’ Objective Minimize return of logistics assets

Six Concepts for Logistics Strategy Formulation Total cost concept Differentiated distribution Mixed strategy Postponement Shipment consolidation Product standardization

AFP Supply Chain Programming Procurement Storage/ Warehousing Distribution Disposal Requirement Determination

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