7/31/2019 SCLM Logistics_Ch 2

1/34

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

2/34

Supply Chain Logistics Management

Importance of Logistics to Business

Logistics Value Proposition

The Work of Logistics Logistics Operations

Logistics Operating Structures

Supply Chain Logistics Performance

7/31/2019 SCLM Logistics_Ch 2

3/34

Supply Chain Logistics Management

Scope of Logistics

Logistics Operations

7/31/2019 SCLM Logistics_Ch 2

4/34

Supply Chain Logistics Management

Scope of Logistics

Logistics Operations

7/31/2019 SCLM Logistics_Ch 2

5/34

7/31/2019 SCLM Logistics_Ch 2

6/34

Importance of Logistics to Business

Manufacturing Consumers

Logistics Expenditures

Logistics as a Sustainable CompetitiveAdvantage (SCA)

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

7/34

Importance of Logistics to Business

Manufacturing Consumers

Logistics Expenditures

Logistics as a Sustainable CompetitiveAdvantage (SCA)

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

8/34

Importance of Logistics to Business

Manufacturing Consumers

Logistics Expenditures

Logistics as a Sustainable CompetitiveAdvantage (SCA)

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

9/34

Source: Robert V. Delaney, 11th Annual State Of Logistics Report June 5, 2000

1980 GDP $2.88 trillion Logistics Cost $451 billion

15.7% of GDP Trans. Cost $214 billion

47.5 % of Logistics Cost

1999 GDP $9.26 trillion Logistics Cost $921 billion

9.9% of GDP Trans. Cost $554 billion

60.2 % of Logistics CostLogistics Transportation

$

billion

0

100

200

300

400

500

600

700

800

900

1980 1999

100

0

Year

United States Logistics Costs

7/31/2019 SCLM Logistics_Ch 2

10/34

Importance of Logistics to Business

Manufacturing Consumers

Logistics Expenditures

Logistics as a Sustainable CompetitiveAdvantage (SCA)

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

11/34

Logistics Value Proposition

Service

Cost Minimization

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

12/34

Logistics Value Proposition

Service

Cost Minimization

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

13/34

Logistics Value Proposition

Service

Logistics Service Quality Process Dimensions

Logistics Service Quality Outcome Dimensions

Cost Minimization

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

14/34

Logistics Value Proposition

Service

Logistics Service Quality Process Dimensions

Procedures

Contact

Information

Discrepancy

Logistics Service Quality Outcome Dimensions Cost Minimization

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

15/34

Logistics Value Proposition

Service

Logistics Service Quality Process Dimensions

Logistics Service Quality Outcome Dimensions Timeliness

Availability

Condition

Accuracy

Cost Minimization

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

16/34

Logistics Value Proposition

Service Benefits

Cost Minimization

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

17/34

The Work of Logistics

Order Processing

Inventory

Transportation Warehousing, Materials Handling,

Packaging

Facility Network Design

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

18/34

Integrated Logistics

Order

Processing

Inventory

Transportation

FacilityNetwork

Warehousing,Material Handling

7/31/2019 SCLM Logistics_Ch 2

19/34

The Work of Logistics

Order Processing

order receipt, order assembly, order delivery,

invoicing & collection

Inventory

Transportation

Warehousing, Materials Handling Facility Network Design

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

20/34

The Work of Logistics

Order Processing

Inventory

Transportation Warehousing, Materials Handling

Facility Network Design

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

21/34

The Work of Logistics

Order Processing

Inventory

Transportation Warehousing, Materials Handling

Facility Network Design

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

22/34

The Work of Logistics

Order Processing

Inventory

Transportation Warehousing, Materials Handling

sorting, sequencing, product modification &

assembly, and transportation consolidation Facility Network Design

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

23/34

The Work of Logistics

Order Processing

Inventory

Transportation Warehousing, Materials Handling

Facility Network Design

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

24/34

Logistics Operations

Customers

Enterprise

Customer

Service

Manufacturing

Support

Procurement

(Purchasing)Suppliers

Information Flow

Inventory Flow

7/31/2019 SCLM Logistics_Ch 2

25/34

Logistics Operations

Inventory Flow

Customer Service

Manufacturing Support

Purchasing (procurement) Support

Information Flow

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

26/34

Logistics Operations

Inventory Flow

Information Flow

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

27/34

Logistics Operating Structures

Echelon

Direct

Combined

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

28/34

Logistics Operating Structures

Echelon

Direct

Combined

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

29/34

Echeloned Structured Logistics

Supplier

Storage or

Consolidation

WarehouseManufacturer

Wholesalers

Warehouse

or

Distribution

Center

Retailer Customer

7/31/2019 SCLM Logistics_Ch 2

30/34

Logistics Operating Structures

Echelon

Direct

Combined

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

31/34

Logistics Operating Structures

Echelon

Direct

Combined

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

32/34

Combined Echelon and Direct Structured

Logistics

Supplier

Storage or

Consolidation

Warehouse

Manufacturer

Wholesaler

Warehouse

or

Distribution

Center

Retailer Customer

Direct Delivery

7/31/2019 SCLM Logistics_Ch 2

33/34

Supply Chain Logistics Performance

Performance Cycle Structure

Supply Chain Logistics Management

7/31/2019 SCLM Logistics_Ch 2

34/34

Sources of Performance-Cycle Variation

Order

Transmission

Time Range - Days

1/2 31

Customer

Delivery

Time Range - Days

1/2 31

Order

Transportation

Time Range - Days

2 104

Order

Selection

Time Range - Days

1 202

Order

Processing

Time Range - Days

1 42

Total Performance Cycle

Time Range - Days

5 4010