1. Strategic Integrated Logistics Management: Key issues, evolution of strategic integrated logistics integrated logistics quality and bench marking. Principle of logistics information: Forms of information, functionality of information, Designing and evaluating logistics information system, information architecture and application of IT in logistics,

2. * Review of Elements of Logistics * Strategic Integrated Logistics Management: Key Issues * Evolution * Logistics Quality * Benchmarking Unit 1Strategic Logistics Management 2

3. Unit 1Strategic Logistics Management 3 * NetElements Design * Information * Transportation * Inventory * Warehousing, Material Handling and Packaging

4. Unit 1Strategic Logistics Management 4 * Avoid Duplication – does not take away from the coordination between departments and joint planning * Outsourced activities – the firm should be accountable to their clients’ operating managers

5. Unit 1Strategic Logistics Management 5 Manufacturing plants, CDC, Warehouses and Retail Stores How many are required Geographic Locations Elements to be performed at each location Continuously re-assess reqmts and facilities to reflect demand-supply

6. Unit 1Strategic Logistics Management 6 * Of recent origin * Cause-Effect of more/less Info * Importance of correct trends * Accuracy of Order * Error causes disturbance * Faster information vis-à-vis bunched up data * Info is linked to Forecasting & Order Management

7. Unit 1Strategic Logistics Management 7 * Forecasting Accuracy * Forecasting fine tuning with online info * Concepts such as JIT, QR, Continuous Replenishment * Order Management Process – accuracy of information * Internal and External Orders

8. * Facilities and Information determine Transporation requirements * Private Fleets, Contract Carriage and Common Carriage * Cost of transportation * Speed * Consistency * Cause effect of consistency on logistical system * Key Issues – Selection of Facility, Transporation Cost and reliability over longer term Unit 1Strategic Logistics Management 8

9. Unit 1Strategic Logistics Management 9 * Objective of Inventory Management * Achieve desired customer service with minimum inventory commitment * Basic Goal : Achieve maximum revenue while satisfying customer commitment * Customer Segmentation * Product Requirements * Transport Integration * Time based requirements * Competitive Performance

10. Unit 1Strategic Logistics Management 10 * Other 4 areas independently determine level of customer service at a cost * Facililty Selection : * Sorting, Sequencing, Order selection, Transport Consol, Product Modification & Assembly

11. Unit 1Strategic Logistics Management 11 * Inventory Management * Customer Segmentation * Product Profitability * Transport Integration * Time based performance * Competitive Performance * Pareto’s Principle/Law

12. Unit 1Strategic Logistics Management 12 * Transporation * Cost (total system cost) * Speed * Consistency

13. Unit 1Strategic Logistics Management 13 * Warehousing, Material Handling & Packaging * Own or otherwise * Level of handling sophistication * Master Cartons for multiple handling * Facility NetElements * Plants, Whses, Crossdocks, Retail stores * NetElements design involves multiple locations

14. * Logistics and Integrated Logistics, Growth of Integrated Logistics Service Providers across globe Operational Objectives of Integrated Logistics, Customer Benefits, Barriers to Internal Integrations Unit 1Strategic Logistics Management 14

15. Figure 2.2 Logistical Integration

16. * Information flow from and to customers – Sales activity, Forecasts, Orders and so on * This information is refined into specific mfg and and purchasing Plans (MRP) * As Materials in the form of Inventory flow from suppliers through diff stages of manufacturing – a value added flow of Inventory happens – from RM to FG and on to customers * Key Observations * Shaded Area – Integrating all Internal Functions – is this sufficient? * To be fully effective …………,? * Is this process restricted to business corporations…….,?

17. * Starting Point? * Material gains value through the process * Cost of each component – sub-assembly – value added process * Final Stage of Value addition – real gaining of value? * Key Observations * Case of a Large Manufacturer – 1000’s of movements – culminating in delivery * Large Retailer? * Large Hospital? * For any type of organization – Logistics is essential and requires continuous management attention!

18. * Physical Distribution * Manufacturing Support * Procurement

19. * Movement of Finished Goods to Customers * Customer is the Final Destination * Key Metric or Criterion : Availability of Inventory * Key Observations * Marketing Effort – hinges on delivering an assortment of products to the customer * Space and Time Aspect of Customer Service is served by Physical Distribution * Many different forms of distribution systems are used * Overall Objective : Physical Distribution links mfrs, wholesalers and retailers

20. * Mfg support concentrates in managing what form of Inventory? * Primary responsibility is to draw up the Master Production Schedule and make available the BOM – RM, Components and WIP to Manufacturing * Not focus on “How” of Manufacturing * But focus on “What, When and Where” aspects of manufacturing process – it occurs * One significant diff between Phy Distribution and Manufacturing Support * --------------- aspect * ----------------- aspect of Customer Ordering process (Phy Distribution) is not present in the Manufacturing Support or present to a much lesser degree

21. * Procurement concentrates in managing what form of Inventory? * Primary responsibility is to arrange inbound of ------------ from --------- to -------------- --- * “Purchasing” in Corporations and “Procurement” in Public Sector “Buying” in Retail/Wholesaling * “Material” vs “Product” - when material becomes product * Similarities exist in process between say Grocery Manufacturer Phy Dist and Retail Stores Procurement Operation – Degree of Management Control varies significantly

22. * Information flow from and to customers – Sales activity, Forecasts, Orders and so on * Within Logistics system different requirements exist – dependent on urgency, size of lot, value etc., * Primary reqmt of info is to reconcile these differences * Without info., the effort required in a logistical system can be wasted * Two types : Coordination Flows and Operational Flows

23. * Planning and Coordination Flows : * Coordination is the backbone of overall info. System among value chain parts. Results in plans specifying * Strategic Objectives – marketing and financial goals * Capacity Constraints – External and Internal mfg requirements – limits, barriers, bottlenecks * Logistical Requirements – distribution facilities, equipments, labour etc., * Inventory Deployment – info what, when and where * Manufacturing Requirements – Production situations MPS, MRP and inv deployment * Procurement Requirements – in different industries diff requirements * Forecasts – historical data, current activity levels, planning assumptions to predict future activity levels

24. * Order Management * Order Processing * Distribution Operations * Inventory Management * Transportation and Shipping * Procurement

25. * Availability * readily and consistently available * Rapid availability on the trot * Accuracy * Current Status such as Customer Orders, Inventory Levels * Lack of Accuracy increases uncertainty and inventory reqmts and vice versa * Timeliness : * Exception-based LIS : * To highlight problems and opportunities * Eg :Inventory status for location, status of replenishment orders Unit 1Strategic Logistics Management 25

26. * Flexibility * Capability to facilitate info as req by different stakeholders * Must be upgradable for future enterprise needs * Appropriate Format * Right info in the right structure and sequence * Depending on the person /hierarchy / location information should be structured in the appropriate format * Comprehensively presented data in proper format enable more productivity and easier decision making Unit 1Strategic Logistics Management 26

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28. * Transaction Systems * Management Control * Decision Analysis * Strategic Planning Unit 1Strategic Logistics Management 28

29. * Transaction Systems * Strong Foundation on which other processes are built * Rules, Procedures, Standardized Systems * Large Volume Transactions, Operational day-to-day focus * Record and initiate individual logistics functions * Sequence of transactions from Order Entry to Invoicing and Shipment Notification is the transaction sequence * This whole sequence - online Unit 1Strategic Logistics Management 29

30. * Key Role : Performance Measurement and Reporting * Feedback regarding Supply Chain Performance and Asset Utilisation * Example of Supply Chain Performance Measures * Two key aspects in Performance Monitoring * Historical Performance (as frequently as practical) * Exception Reporting – foreseeable feature – what can go wrong * For example, future inventory shortages, future inventory build-ups, potential cost increases, potential asset utilisation related etc., * Cost – accurate measure; customer service, service level etc., give an idea of the actual situation Unit 1Strategic Logistics Management 30

31. * Decision analysis involves visualizing, comparing, analysing, evaluating different scenarios - for improving both tactical and strategic effectiveness/efficiencies * Issues include – Logistics Design, Inventory Control, Segmental Profitability, Resource Allocation and Routing * Data Base Modelling, Maintenance and Reporting on a Wide range of Parameters * Decision analyses by their very nature need to be flexible, open and unbiased in order to work on multiple future scenarios * Users require more expertise and training Unit 1Strategic Logistics Management 31

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