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2. Agenda Understand what logistics is and why it is important.
Discuss some of the issues in logistics.
Figure out how to learn more.
3. Logistics Defined “Logistics is that part of the supply chain process that plans, implements and controls the efficient flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements”
4. The Five Rights of Logistics Logistics is about getting…
the right items,
to the right place,
at the right time,
and in the right condition
at the right cost.
5. Logistics & Football September 2, 2000.
The Game: OSU vs. Fresno St.
The Normal Temperature: 77
That day: 87° & 97% humidity.
6. Logistics & Decorating You want to paint your dorm room.
You decide to paint it avocado mustard and go to the hardware store.
They take a gallon of white and mix the color you want.
7. Logistics & Cars You graduate from college and your generous parents offer to buy you a new car.
You want a red car with gray interior, a CD player and cruise control.
The dealer will give you a deal on a blue car (with an awful gold interior) with a sunroof, but no CD player nor cruise control.
8. Logistics & Walgreens When taking a phone order, the founder of Walgreens used to repeat the name, address and order to his partner.
His partner would then fill the order as he talked.
He would try to prolong the phone conversation so that the order would arrive at the customer’s home while he was still talking to them on the phone.
9. Logistics & My PDA I had a Handspring Visor which broke.
I called and they told me they would send me a new one.
Two days later I received a new Visor – complete with the cradle, software and a case.
They told me to return the broken handheld unit and keep everything else.
10. Logistics and Bobbleheads
11. Logistics and Dell is famous for its make-to-order business model.
They can do this successfully due to their streamlined logistics systems.
They actually have a negative cash cycle!
13. Point #2 Logistics is pervasive—every kind of organization depends on logistics.
Second Harvest illustrates an unusual logistics situation, but a basic logistics concept. Second Harvest runs a network of food banks around the U.S. They rely on donated goods, so the demand for logistics activity could arise anywhere. Last year the potato farmers in Ohio donated ten million pounds of potatoes to Second Harvest, so Second Harvest logisticians had to figure out how to move and store 250 truckloads of potatoes. The potatoes had to move from Ohio to hungry people throughout the U.S. and other parts of the world. Without effective logistics, Second Harvest cannot fulfill its mission, feeding the hungry. Neither can it do what its literature promises to its donors—which is to carry out that mission.
Many music tours now use a firm called Rock It Cargo to move goods for their tours. The firm provides on-time delivery and specializes in ‘event’ logistics. This means that the musicians and light show specialists have the tools of their respective trades when they need them. And the concertgoers can count on the concert dates. Because of its on-time record, Rock It Cargo now enjoys a client list that includes some of the best-known names in music and entertainment.
Adopting the Euro as the currency of Europe could substantially stimulate the economy, but the 12 member states had to exchange domestic currency for the Euro in a planned, financially secure way, simultaneously, without disrupting individual economies or their monetary distribution systems. This includes all segments along the supply chain from Central banks through to the individual citizen. Governmental promotional campaigns had been advocating the change for years, but they had to deliver—pick up and deliver, actually—when they promised they would. They had to quickly distribute 50 billion Euro coins and remove their predecessor currencies from circulation—250 tons in each direction.
Point #2 Logistics is pervasive—every kind of organization depends on logistics.
Second Harvest illustrates an unusual logistics situation, but a basic logistics concept. Second Harvest runs a network of food banks around the U.S. They rely on donated goods, so the demand for logistics activity could arise anywhere. Last year the potato farmers in Ohio donated ten million pounds of potatoes to Second Harvest, so Second Harvest logisticians had to figure out how to move and store 250 truckloads of potatoes. The potatoes had to move from Ohio to hungry people throughout the U.S. and other parts of the world. Without effective logistics, Second Harvest cannot fulfill its mission, feeding the hungry. Neither can it do what its literature promises to its donors—which is to carry out that mission.
Many music tours now use a firm called Rock It Cargo to move goods for their tours. The firm provides on-time delivery and specializes in ‘event’ logistics. This means that the musicians and light show specialists have the tools of their respective trades when they need them. And the concertgoers can count on the concert dates. Because of its on-time record, Rock It Cargo now enjoys a client list that includes some of the best-known names in music and entertainment.
Adopting the Euro as the currency of Europe could substantially stimulate the economy, but the 12 member states had to exchange domestic currency for the Euro in a planned, financially secure way, simultaneously, without disrupting individual economies or their monetary distribution systems. This includes all segments along the supply chain from Central banks through to the individual citizen. Governmental promotional campaigns had been advocating the change for years, but they had to deliver—pick up and deliver, actually—when they promised they would. They had to quickly distribute 50 billion Euro coins and remove their predecessor currencies from circulation—250 tons in each direction.
14. The Five Rights of Logistics Logistics is about getting…
the right items,
to the right place,
at the right time,
and in the right condition
at the right cost.
15. Major Logistics Activities Customer service
Demand forecasting/planning
Logistics communication
Material handling
Packaging Parts and service support
Site selection
Return goods handling
Reverse logistics
16. Logistics Effects Reduce costs
Material costs
Freight costs
Inventory costs
Improve customer service levels
17. The Effects of Technology “A California inventor has developed a $1300 book-binding machine that makes it cheap and easy to print professional-quality books within minutes. Industry analysts say the device could make it possible for consumers to purchase previously hard-to-find texts at most bookstores.”
(from www.npr.org)
18. What Does it Mean to the Customer? “A product or service provides customer satisfaction only if it is available to the customer when and where it is needed.”
19. Connection to Marketing
23. Cost Tradeoffs in the Supply Chain Transportation costs vs. inventory costs
Service vs inventory
Shortage costs vs. inventory costs
Quality control vs inventory
24. Logistics Plays a Large Role in the Economy The annual U.S. logistics expenditure is over $1 trillion.
The logistics share of the GDP in the U.S. is larger than that of health care, social security, or defense.
In 2000, logistics contributed approximately 10% of GDP.
Logistics costs account for nearly 30% of the sales dollar in the U.S.
25. Principle #1: Logistics benefits society.
This slide summarizes information found in Table __, page ___. This slide shows only one developing economy, Mexico. The differences between logistics expenditures in the developed economies come from volume, restricted management practices, geography, and labor costs. The U.S. gets tremendous utilization from its infrastructure, lower its costs. Japan is highly efficient, but it restricts management practices; it is also highly congested in populated areas. Canada and Germany are more highly unionized than the U.S. Germany is also landlocked, making it more costly to acquire goods that move efficiently by ocean carrier.
FROM “PRINCIPLE” #1
When Brian ’s company moved him from the U.S. to manage a plant in Mexico, he found that he could still get his favorite brands, but they were expensive. Goods produced in the local economy were inexpensive, but if he wanted the same brands he had used in the U.S., he either paid more for his favorites or waited to buy them on a trip to the U.S. Brian’s plant was located in a region of Mexico that lacks the logistics infrastructure and systems to bring in a wide variety of goods at a cost that local citizens can afford. For Brian, this underscored the importance of logistics systems and infrastructure to getting a wide variety of goods.
Principle #1: Logistics benefits society.
This slide summarizes information found in Table __, page ___. This slide shows only one developing economy, Mexico. The differences between logistics expenditures in the developed economies come from volume, restricted management practices, geography, and labor costs. The U.S. gets tremendous utilization from its infrastructure, lower its costs. Japan is highly efficient, but it restricts management practices; it is also highly congested in populated areas. Canada and Germany are more highly unionized than the U.S. Germany is also landlocked, making it more costly to acquire goods that move efficiently by ocean carrier.
FROM “PRINCIPLE” #1
When Brian ’s company moved him from the U.S. to manage a plant in Mexico, he found that he could still get his favorite brands, but they were expensive. Goods produced in the local economy were inexpensive, but if he wanted the same brands he had used in the U.S., he either paid more for his favorites or waited to buy them on a trip to the U.S. Brian’s plant was located in a region of Mexico that lacks the logistics infrastructure and systems to bring in a wide variety of goods at a cost that local citizens can afford. For Brian, this underscored the importance of logistics systems and infrastructure to getting a wide variety of goods.
26. Why is Logistics Hot? Deregulation of the transportation industry in the late 70s and early 80s.
Rising interest rates & energy costs through the 70s.
Globalization
more competitors overseas,
supply chains become longer.
Importance of controlling costs.
Growth of IT (introduction of MRP, DRP, JIT).
Increasing focus on customer service.
Logistics is now seen as adding value.
It is now seen as a potential competitive advantage.
28. Trends in Logistics Time based competition
Information Technology
Postponement
E-Commerce
3rd party logistics
Supplier/customer partnerships
Collaborative Planning and Forecasting
Vendor Managed Inventory
Reverse logistics
Focusing on supply chain management
29. Supply Chain Management “Supply chain management is the integration of key business processes from end user through original supplier that provides products, services, and information that add value for customers and other stakeholders.”
31. Careers in Logistics Transportation: Schneider, J.B. Hunt, C.H. Robinson
3rd Party Logistics: Exel, FedEx Logistics
Manufacturers: General Mills, P&G, Nabisco, Colgate-Palmolive, Ford, Cisco
Retailers: Wal-Mart, Limited, Staples, Gap
Consulting: Arthur Andersen, Accenture, Ernst & Young
Software: i2, Manugistics, CAPS
32. How to Learn More Take a logistics course (M&L 780 for starters)
Come to a TLA (Transportation & Logistics Association) meeting
Every Tuesday at 7:30 in SB 205
Different company presents each week
Pizza and pop included
On the web: www.osutla.com
Get an internship in logistics
33. Any Remaining Questions… Ask now or contact me any time.
croxton@cob.osu.edu
292-6610
518 Fisher Hall
