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Business Logistics - an overview Göran Persson Handelshøyskolen BI

Business Logistics - an overview Göran Persson Handelshøyskolen BI.

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Business Logistics - an overview Göran Persson Handelshøyskolen BI

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  1. Business Logistics- an overviewGöran PerssonHandelshøyskolen BI

  2. Physical DistributionMarketing LogisticsMaterials ManagementLogistics Engineering Production ManagementOperations ManagementIndustrial LogisticsBusiness LogisticsLogistics ManagementIntegrated Logistics ManagementSupply ManagementLogistics pipeline ManagementDistribution ManagementSupply Chain Management

  3. Business Logistics • design and management of • the physical flow of goods • and the related managerial processes • from point of origin to end user (or disposal)

  4. BUSINESS LOGISTICS - a flow orientation Planning, control and coordination of the flow of materials and products from the sources of supply to the final customers Customers Suppliers * * * * * * * * * Regional warehouses ² ² ² ² ² ² Raw materials storage ² ² ² Finished goods storage ² ² ² O O O ² Purchasing Production Physical distribution Business logistics

  5. The logistics process spans most functions of the business..... Customer Order processing Manu- facturing Distribution Accounting Place order Report order Request materials Transmit order Scedule production Deliver Funds Invoice Sales Forecasting Purchasing Sales Check availability and reorder Customer .. demands cross-functional planning, coordination and control

  6. Logistics efficiency Company stucture Variables which strongly and systems influence the company efficiency and profitability The company organisation Planning- and control systems Transport, ware- housing and materials handling Revenue which varies with the customer service The costs of running the logistics systems The inventory costs

  7. Scope of activitiesTransportationStoragePackagingMaterials HandlingOrder ProcessingForecastingProduction PlanningPurchasingCustomer ServiceSite LocationOther Activities

  8. Reoccuring problem areas and perceived inefficiencies • • long lead-times • • lead-time variations • • throughput time long and uncertain • • excess inventories • • obsolete materials • • many slow-movers • • poor service levels • • communication and coordination among players • (functions, organisations) • • poor control • • poor forecasts • • costs too high • - order processing/order handling • - transportation • - warehouse operation • • etc.

  9. Major tasks for the logistics manager: • • Opportunity assessment • - Diagnostic review • - Pre-study for identifying inefficiencies and opportunities • • Logistics infrastructure design and action plan • - Exploring the link between overall strategy and logistics • - Creating the strategic logistics vision • - Evaluating selected options • - Develop a logistics strategy • • Operational capability improvement • - Logistics Process Redesign and Cont. improvement • - Creating faster and more reliable processes • - Improve flexibility in production and distribution

  10. • Product flow synchronisation • - Synchronised production • - Continuous replenishment • - Integrated suppliers • - Automated ordering • - Capacity management • - Integrated and coordinated decision making • (Acting and reacting as one system) • • Organisational issues • - Inter-organisational processes • - Internal logistics processes • - Work processes

  11. “Flow analysis” To understand the physical flow of goods • Where is the capital tied-up • How long - coverage in days or weeks • Why is it there - functions

  12. Gj.sn. leveringstid bestillt og ikke levert/ input pr. tidsenh. Gj.sn. leveringstid bestillt og ikke levert/ output pr. tidsenh. Kan gjennomføres på ulike nivåer: totalt hovedgrupper produktgrupper artikkelnr.nivåen input/tidsenh. output/tidsenhet Gj.sn. gjennomløpstid • EKS: • Prod. område Dekningstid Variasjon mellom prod.grupper • Gj.sn.siste Gj.sn.siste • 12 mån Siste mån 12 mån Siste mån • A 3 mån 3 mån 2 - 4 mån 1 - 11 mån • B 3 mån 5 mån 1 - 2 mån 0 - 40 mån • C 4 mån 7 mån 2 - 12 mån 0 - 106 mån

  13. Basic Techniques • (1) DEMAND ANALYSIS • Forecasting • Forecast error • (2) INVENTORY CONTROL • Economic Order Quantity • Safety stock • ABC-analysis • (3) PRODUCTION CONTROL (AND WAREHOUSING) • Capacity planning • Scheduling • Lay-out planning • Line balancing techniques • (4) TRANSPORTATION • Location models • Routing • Sceduling

  14. FORECASTING • • forecast and forecast error • expected demand and expected variation • • Item, product group, total output • - different levels • - kr • • Two dominating techniques • - moving average • - exponential smoothing

  15. INVENTORY CONTROL • ... when to order? • ... how much? • Stock has different functions meaning: different cost elements involved Order quantity turn-over stock Safety stock • Average inventory = turn-over stock + safety stock • Inventory turn-over = Demand (yr)/av. inventory • Coverage = actual stock level / output per time unit

  16. PRODUCTION PLANNING AND CONTROL • • Do I have the right capacity? • - where are the bottlenecks? • - what can be done about them? • • Am I working on the right job right now? • - priorities?

  17. TECHNIQUES AND TOOLS (used by logisticians) • SUPPLY CHAIN MAPPING AND MODELLING • PERFORMANCE MEASUREMENT TECHNIQUES • DEMAND FORECASTING AND ANALYSIS • PRODUCTION MANAGEMENT TECHNIQUES AND TOOLS • MAINTENANCE MANAGEMENT TECHNIQUES AND TOOLS • CHANGEOVER REDUCTION PROCESS • STATISTICAL PROCESS CONTROL • SUPPLIER ANALYSIS AND ASSESSMENT TECHNIQUES • SUPPLY MANAGEMENT TECHNIQUES • ACTIVITY BASED COSTING • VALUE CHAIN ANALYSIS • NETWORK ANALYSIS • BENCHMARKING TECHNIQUES AND TOOLS (databases) • CHANGE MANAGEMENT TECHNIQUES AND TOOLS • ORGANISATION DESIGN MODELS • PROCESS ANALYSIS TOOLS (such as cause and effect diagrams and process flow charts) • STATISTICAL ANALYSIS TECHNIQUES AND TOOLS (such as Pareto charts, histograms & control charts)

  18. 60sTotal costAnalytical approachInternal perspectiveOptimising inventory costsOptimising transportation costsDecision models

  19. 70sSystems TheorySynergyDesign and management of Delivery SystemsHolistic (the flow of materials)Co-ordinationLogistics Management

  20. 80sSystems TheoryJust-in-timeEconomy of Scope vs economy of scaleCapital tied-upZero Defect & Zero InventoryElimination of wasteOrder production

  21. 90sValue chainsCompetitive advantageTime based managementResponsiveness, quality, andproductivity in thelogistics processes

  22. 00sShareholder value Supply chains Focus on interorganisational co-laboration Networks and relationships Positioning and operational excellence Supply Chain Management

  23. THREE PERSPECTIVES CHANNEL Industry Comp Supply Production Logistics Finance Marketing/ /Accounting Sales Comp Company Source: Shapiro/Heskett, 1985

  24. THREE PERSPECTIVES 1. Company * To create an efficient and effective materials flow through an effective internal structure and through an efficient co-ordination of logistics activities * Focus on internal relationships * Delivery service, logistics costs and capital tied-up

  25. 2. CHANNEL * To create an effective co-operation and co-ordination in the channel, as well as an effective network structure * Focus on external relations (suppliers of materials, components, services,and customers) 3. Industry * To achieve competitiveness through a logistics strategy * Customer value and shareholder value

  26. Fem trender i utviklingenmot "leading edge logistics" Fokus på hele verdiskapningskjeden • konkurranse vs outsourcing • spesialisering vs koordinering Prosessorientering • TQM; TBM; Re-engineering etc. • Prosessorienterte organisasjonsstrukturer Kundedrevet strategi : • "Customer focus" & å skape verdi for kunde • Differensierte leveringsprosesser Videre utvikling av strategiske allianser • Mellom "marked og hierarki" • Samspill i netverk • Leverandørsamarbeide Prosessorienterte målemetoder • Prosessorientert måling av prestasjon og effektivitet •• Benchmarking

  27. Helhet: Logistikkens utvikling i en bedrift Trinn 1: Punktinnsatser i verdikjedens ulike ledd. Fokus på kostnadsreduksjoner i ulike funksjoner, f.eks. innkjøp eller distribusjon. "Funksjonell kostnadseffektivitet". Kunde Lev F1 F2 F3

  28. Trinn 2: Integrasjon av de interne logistikk-prosessene. Fokus på felles bidrag fra ulike funksjoner for å oppnå en gitt leveringsservice mot kunde. Samordning av ulike interne aktører. "Intern kostnadseffektivitet". Lev F1 F2 F3 Kund

  29. Trinn 3: Synergier gjennom ekstern samordning.Logistikk som nøkkelelement for å skape konkurransefordeler. Fokus på hvordan logistikk skaper verdi for kunde. "Kundetilpasset kostnadseffektiv tillgjenglighet" Leverandør Bedriften Kunde

  30. Outsourcing som strategisk tilnærmning • Konsentrasjon av bedriftens ressurser på et set av “kjernekompetanser”, hvor man har mulighet å oppnå en definerbar fordel fremfor konkurrentene gjennom å skape unik verdi for kunde • Outsource andre aktiviteter, inkludert mange som av tradisjon er blitt betraktet som nødvendige interne aktiviteter og funksjoner • Skape strategiske allianser med et set komplementære levrendører for å redusere risiko eller for å skape konkurransefordeler knyttet til posisjon eller prosess

  31. Hvorfor “Outsourcing”? 1. Bedre fokusering på kjernevirksomheten 2. Tilgang til “world-class” produkter/processer/tjenester/teknologi 3. Raskere omstilling 4. Fordele risk 5. Frigjøre ressurser (også ledelsesressurser) for annen (kjerne-) virksomhet 6. Redusere investeringsbehov - konsentrere 7. Bedre Cash-flow 8. Redusere og styre driftskostnader 9. Ressurser ikke tilgjengelige innen egen organisasjon 10. Funksjonen er vanskelig å lede/styre Kilde:Outsourcing Institute, 1996 1200 bedrifter i perioden -91/-96

  32. 2. Prosessorientering som strategi: Hvordan skape konkurransefordel... 1. Posisjonell fordel - strukturell fordel * Hva og hvor * Produkt- / marked 2. Prestasjonsfordel - prosess kompetanse * Hvordan konkurrere gitt posisjonen * “Operational excellence” * Hvordan bli "best i klassen"

  33. Fokuseringen flyttas från "funktionell kompetens" till "affärsprocess kompetens", där leverantörerna är integrerade i processen. Leveransprocesserna Affärs process

  34. 1. Stor andel av våra kostnader 2. Andelen av de totala kostnaderna ökar 3. Potential: en minskad inköpskrona (eller bättre kostkrona ytill skillnad från priskrona) är en vinstkrona 4. Leverantören får ökad betydelse för våra leveransprocesser 5. Ökad komplexitet i inköpsarbetet ökar dess betydelse • köpta produkter och komponenter mer sofistikerade • högre teknikinnehåll • andel internationella köp ökar 6. Ny insikt: fördelar med långsiktiga relationer coh allianser • gemensamma satsningar, öppenhet, ömsesidigt förtroende, flexibilitet Innkjøpets betydelse

  35. 1. En prosess for å sette realistiske og "riktige" målsettninger 2. Oppdage og forstå hvilken praksis som er nødvendig for å nå målene 3. Motivere og oppmuntre organisasjonen til kontinuerlig forbedring av sine ytelser for at den skal bli mer konkurransedyktig 4. Legitimere kort- og langsiktige mål ved å knytte dem til observerte ytelser hos de ledende konkurrentene 5. Konsentrere organisasjonens oppmerksomhet og innsamot de viktigste leveringsprosessene Benchmarking

  36. From.. function profit products transaction inventory To... process profitability customers relationships information Leading to... Integral management of materials & goods flow Ressource management and asset utilization Focus on markets and customer service Co-makership and co-shipper partnerships Demand-based replenishment & quick response systems

  37. Europeans leaders - prioriterte tiltak Forbedring av kundeservicen gjennom 1. TQM 2. Fokus på kjernen 3. Differensiering av leveranseprosesser Bedre fleksibilitet gjennom 1. Målstyrte teams 2. Strategiske allianser 3. Prosessorient./TBM Forbedring av logistikken gjennom 1. Process reenginerring 2. Effktivisering av distr.struktur 3. Målstyrte grupper 4. Omlokalisering 5. Differensiering av leveranseprosesser

  38. 1. Kundorientering inom hela organisationen. 2. Flexibel och lärande organisation. 3. Arbeta med värdekedjor, ökat värde för kunden (value added, kvalitet). 4. Individen som pådrivare i förändringsprocessen. Individens och arbetsgruppens förmåga att genomföra förändringar och driva processen måste vara stor. 5. Använda information- och kommunikations- teknologin fullt ut. Vinnarna

  39. 6. Tid som konkurrensmedel. 7. En tydlig vision som drivkraft. 8. Globalt perspektiv vid utveckling av strategier. 9. Innovationskraft och entreprenörskap. 10. Platta organisationshierarkier, inga hierarkier alls. 11. Nätverksstrukturer. Vinnarna

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