Logistics Supply Chain Management SCM Sense Importance

Logistics & Supply Chain Management (SCM) Sense, Importance and Scope 1

Logistics is… • Logistics management is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-oforigin to the point-of-consumption in order to meet customers’ requirements. 2

Steps of Logistics Development • Phase I – Pre-business applications • Dating from the Napoleonic Wars • Refers to the technique of moving and quartering armies – quartermasters’ work • Still applied for the NATO Allied forces 3

Steps of Logistics Development, cont’d • Phase II – Logistics supports marketing-mix b) Trade-offs in marketing a) Utility of place, time and possession 4

Steps of Logistics Development, cont’d • Phase III – Logistics integrates processes throughout organizations Value chain Trade-offs 5

Steps of Logistics Development, cont’d • Phase IV – Supply chain management Perspective of value management beyond single organizations! 6

What Has Made Logistics So Popular? 7

Globalization and Outsourcing Only 10 -15% is being produced in Germany! 8

Mass Customization • Production of personalized or custom-tailored goods or services to meet consumers' diverse and changing needs at near mass production prices 9

IT Development 10

Reinvent! TQM and ISO 9001 Experiences 11

Financial impact of logistics 12

Key Logistics Activities • Demand forecasting • Inventory management • Logistics communication • Materials handling • Order processing • Packaging • Parts and service support • Plant and warehouse site selection • Procurement • Reverse logistics • Traffic and transportation • Warehousing and storage 13

Contemporary Logistics Scope 14

Supply Chain • A supply chain is that network of independent organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer 15

Key Characteristics od Supply Chains • They’re networks instead of loosely linked associations of discrete businesses • Linkages – coordinating supply chain processes and relationships • The linkages go both downstream and upstream • Based on process orientation 16

To by mak co e s op ing era le tio pro n! fit s Why To Integrate Supply Chains? To save money To enhance value for customer 17

Less inventories – the chosen way how to save money… 18

Key Success Factors… • For establishing and developing the successful supply chain. . ? 19

Levels of SCM Integrity 20

Logistics Parties 2 PL 3 PL 4 PL 1 PL 21

First Party Logistics (1 PL) • A First-party logistics provider (abbreviated 1 PL) is a firm or an individual that needs to have cargo, freight, goods, produce or merchandise transported from a point A to a point B. The term firstparty logistics provider stands both for the cargo sender and for the cargo receiver. 22

Second Party Logistics (2 PL) • A Second-party logistics provider (abbreviated 2 PL) is an assetbased carrier, which actually owns the means of transportation • • • shipping lines, which own, lease, or charter their ships, airlines, which own, lease, or charter their planes, truck companies, which own, or lease their trucks, rail companies, which own their trains, warehouse owners. 23

Third Party Logistics (3 PL) • A firm provides multiple logistics services for use by customers. Preferably, these services are integrated, or bundled together, by the provider. • Among the services 3 PLs provide are transportation, warehousing, crossdocking, inventory management, packaging, and freight forwarding. 24

Third Party Logistics (3 PL), cont’d • Third-party logistics providers • freight forwarders • courier companies • other companies integrating & offering subcontracted logistics and transportation services 25

Fourth Party Logistics (4 PL) • A Fourth-party logistics provider (abbreviated 4 PL), lead logistics provider, or 4 th Party Logistics provider, is a consulting firm specialized in logistics, transportation, and supply chain management. • NON-ASSET BASED! 26

Logistics Customer Service The Interface of Marketing and Logistics 27

The levels of a regular product • CORE product is the BENEFIT of the product that makes it valuable to you. • The ACTUAL product is the tangible, physical product. You can get some use out of it. • The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. 28

The Pareto Principle (or 80/20 Rule) Source: http: //www. effective-time-management-strategies. com/pareto-principle. html 31

Key Success Factors • "The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. • They are the few key areas where things must go right for the business to flourish. • If results in these areas are not adequate, the organization's efforts for the period will be less than desired. " 32

What is KSFs Analysis? • KSFs analysis leads to make The factors : • Recognized • Ranked 33

Where To Find. . ? • Finance • Marketing • Product Development • Operations • …………. 34

How To Find. . ? • Brainstorming led to have filled the sentence: If we ………………………… then we will be successful 35

How To Analyze. . ? • In pairs analysis 36

How To Present. . ? 37

Options of KANO Model 38

39

Incremental costs or incremental revenue Maximum incremental profit Incremental customer service 40