© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin INTEGRATING SUPPLY CHAIN AND LOGISTICS MANAGEMENT

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Relating marketing Channels, Logistics, and Supply Chain Management  Logistics Logistics  Logistics management Logistics management  Supply chain Supply chain  Supply chain management Supply chain management SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Relating marketing channels, logistics management, and supply chain management

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The automotive supply chain

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Supply Chain Management and Marketing Strategy Aligning a Supply Chain with Marketing Strategy  Understand the customer  Understand the supply chain  Harmonize the supply chain with the marketing strategy SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Information’s Role in Supply Chain Responsiveness and Efficiency Electronic data interchanges Total Logistics Cost Concept INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How total logistics cost varies with number of warehouses used

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Customer Service ConceptCustomer Service INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Supply chain managers balance total logistics cost factors against customer service factors

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Customer Service ConceptCustomer Service Lead Time  Quick response Quick response  Efficient consumer response Dependability Communication Convenience Customer Service Standards INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Third-party logistics providers Transportation KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advantages and disadvantages of five modes of transportation

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Transportation Railroads  Intermodal transportation Intermodal transportation KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Transportation Motor Carriers Air Carriers and Express Companies Freight Forwarders Warehousing and Materials HandlingMaterials Handling Order Processing KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Inventory Management Reasons for Inventory Inventory Costs Supply Chain Inventory Strategies  Just-in-time (JIT) concept Just-in-time (JIT) concept  Vendor-managed inventory Vendor-managed inventory CLOSING THE LOOP: REVERSE LOGISTICS REVERSE LOGISTICS KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible price. Logistics

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements. Logistics Management

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users. Supply Chain

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to customers. Supply Chain Management

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Practice of unloading products from suppliers, sorting products for individual stores, and quickly reloading products onto trucks for a particular store. Cross Docking

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Combine proprietary computer and telecommunication technologies to exchange electronic invoices, payments, and information among suppliers, manufacturers, and retailers. Electronic Data Interchange (EDI)

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Expenses associated with transportation, materials handling and warehousing, inventory, stockouts, order processing, and return goods handling. Total Logistics Cost

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience. Customer Service

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Lag from ordering an item until it is received and ready for use or sale. Also called order cycle time or replenishment time. Lead Time

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An inventory management system designed to reduce the retailer’s lead time, thereby lowering its inventory investment, improving customer service levels, and reducing logistics expense. Quick Response

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Firms that perform most or all of the logistics functions that manufacturers, suppliers, and distributors would normally perform themselves. Third-Party Logistics Providers

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items. Vendor-Managed Inventory

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or sue for repair, remanufacturing, redistribution, or disposal. Reverse Logistics

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Combining different transportation modes to get the best features from each. Intermodal Transportation

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Firms that accumulate small shipments into larger lots and then hire a carrier to move them, usually at reduced rates. Freight Forwarders

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Moving goods over short distances into, within, and out of warehouses and manufacturing plants. Materials Handling

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An inventory supply system that operates with very low inventories and requires fast, on-time delivery. Just-In-Time Concept