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Introduction into Logistics

Introduction into Logistics. PhD Natasha Lutovinova Logistics Lecturer E-mail: Lutovinova.N@nhtv.nl Room: G1.006. Handbook: Paul R. Murphy & Donald F. Wood, Contemporary logistics (New Jersey 2011), 10 th edition. 3. Introduction into Logistics Course Outline. 12.05 Introduction

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Introduction into Logistics

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  1. Introduction into Logistics PhD Natasha Lutovinova Logistics Lecturer E-mail: Lutovinova.N@nhtv.nl Room: G1.006

  2. Handbook: Paul R. Murphy & Donald F. Wood, Contemporary logistics (New Jersey 2011), 10th edition 3

  3. Introduction into Logistics Course Outline 12.05 Introduction 13.05 SCM Concept, Inventory 14.05 Demand Management, Warehousing Management 15.05 Transportation Management, International Logistics 16.05 Poster Session

  4. CHAPTER 1 Logistics and the Supply Chain 5

  5. Learning Objectives • To learn the definition of logistics (what it is) • To understand the economic importance of logistics • To gain an understanding of logistics practices within a firm 6

  6. Logistics and the Supply Chain • Logistics: what it is • Council of Logistics Management definition: • “Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.” Source: clm1.org 7

  7. Figure 1-1: Control Over the Flow of Inbound and Outbound Movements 8

  8. Logistics and the Supply Chain • Materials Management Physical distribution • Business Logistics Logistics Management • Industrial distribution Supply Chain Management 9

  9. Logistics and the Supply Chain (What it is) The forward and reverse flow of product and info • Logistics • Reverse logistics The importance of meeting customer requirements • Mass logistics • Tailored logistics 10

  10. Figure 1-2: The utilization of logistics service as a major selling point 11

  11. Logistics and the Supply Chain (the economic importance) • Economic impacts of logistics on Macro level (see table 1-1) • Economic impact on Micro level Economic utility: value of product in satisfying the need of the customer • Possession utility • Form utility • Place utility • Time utility 12

  12. Table 1-1: The cost of the Business Logistics system in relation to Gross Domestic Product (GDP) in $ billion 13 Source: R. Wilson and R. Delaney, Twelfth Annual State of Logistics Report, 2001

  13. Logistics and the bottom line Sales revenue Customer Service Profit Logistics efficiency Costs Return on investment Pipeline management Cash Fig. 3.2 Logistics impact on ROI Accounts receivable/payable Cash-to-cash cycle time Capital employed Just-in-time logistics Inventory Asset deployment and utilization Fixed assets 14

  14. Logistics and the Supply Chain (logistical relationships within the firm) • The systems approach “Company’s objectives can be recognized by the mutual interdependence of the major functional area of the firm, such as marketing, production, finance and logistics”. • The total cost approach “Cost trade-offs have to be made”. 15

  15. Logistics and the Supply Chain (logistical relationships within the firm) • Finance • Capital budgeting (SO&P) • Inventory (asset valuation LIFO or FIFO) • Cash flow associated with holding inventory • Inventory cost versus inventory units 16

  16. Logistics and the Supply Chain (logistical relationships within the firm) • Marketing (4 p’s) • Place decisions • Price decisions • Landed cost • Phantom freight • Freight absorption • Product decisions • Stockouts • Promotions decisions 17

  17. Figure 1-3: Phantom freight and freight absorption 18

  18. Firm infrastructure Human resource management Technology development Procurement Service Marketing & Sales Inbound Logistics Outbound Logistics Operations The supply chain becomes the value chain Support Activities Fig. 1.7 The value chain Primary Activities 19

  19. Logistics and the Supply Chain (logistical relationships within the firm) • Production • Length of production runs • Postponement 20

  20. Logistics and the Supply Chain (activities in the logistical channel) • Customer Service (Ch. 7) • Warehousing Management (Ch. 10) 21

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  22. Logistics and the Supply Chain (activities in the logistical channel) • Inventory Management (Ch. 8) • Cost of carrying product • Cost of ordering product • Cost of being out of stock • Order Management (Ch. 7) • Production scheduling • Returned products (Ch. 1) (Reverse logistics) 23

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  24. Logistics and the Supply Chain (activities in the logistical channel) • Transportation (Ch. 12) 25

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  26. Logistics and the Supply Chain (Activities in the logistical channel) • Demand forecasting (Ch. 7) • Industrial packaging (Ch. 11) • Materials handling (Ch. 11) • Parts and service support • Procurement (Ch. 6) • Salvage and scrap disposal (Ch. 6) 27

  27. Fig. 10-1 Adding a Warehousing Facility: shorter-Haul Transporation Logistics and the Supply Chain (Activities in the logistical channel) Producer (Manufacturing) Warehouse facility (Inventory) Sales Retailer A Transportation (Distribution) Retailer B Retailer C • Warehousing Management (Ch. 10) Retailer A Transportation (Distribution) (Volume shipment) Transportation (Distribution) Retailer B Retailer C 28

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  29. Next time: Assignment • 3 vacancies / advertising + short working paper 250 words about job of a logistics manager / warehouse manager / transportation manager / Supply Chain Manager 30

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