Lec2.1-OP & SCM - Logistics MGT

Operations and Supply Chain Management
Module 2 Logistics Management
Syllabus- LOGISTICS MGT.

1. BUSINESS LOGISTICS (2 HRS) Logistics management a paradigm shift Market -logistics objectives Logistics operation; meaning. importance & effectiveness Customer value chain Marketing and logistic mix. Organizing logistic functions.

3. LOGISTICS INFORMATION SYSTEM (1 HR) Logistics information needs Designing a logistic information system Role of technology in logistics - Automatic identification technology - Electronic Data Interchange (EDI) - Warehouse simulation - Communication technology 4. LOGISTIC OUTSOURCING (1 HR) Drivers of outsourcing trends Benefits of logistic outsourcing Selection of service provider Outsourcing-A value proposition
2. PRACTICES OF OPERATIONAL LOGISTICS (2 HRS) Market survey and customer care service and attributes. Integrated logistics management Understanding costs and benefits-quoting rates for services Determining the customer service level Different mode of payments Operations research & logistics decision making Logistic auditing Relogistics - A new wave for value delivery
Logistics Management- The Supply Chain Imperative by Vinod V. Sople

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Syllabus- SUPPLY CHAIN MGT.

5. SUPPLY CHAIN MANAGEMENT (1 HR) Supply chain components Economics of distribution
7. DESIGNING SUPPLY CHAIN NETWORK (2 HRS) Factors influencing distribution in the supply chain.
Supplier distributor benchmarking

6. SOURCING, TRANSPORTING AND PRICING PRODUCTS (2 HRS) Transportation in supply chain
Distribution networks in practice.

Models for facility location and capacity allocation 8. COORDINATION IN SUPPLY CHAIN (1 HR) Effect of lack of coordination on Performance Partnership relationship management Technology in supply chain - Supply chain IT Framework - Future of IT in Supply Chain
Strategic cost management initiatives across global supply chain

Greening of supply chain
Logistics Management- The Supply Chain Imperative by Vinod V. Sople

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What is Logistics?
Logistics is the . . . process of planning, implementing, and controlling the efficient, effective 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.
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Council of Logistics
What is SCM? Supply Chain Management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. (Stanford Supply Chain Forum)
So, Logistics and Supply Chain are equivalent terms.

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Boeing 787
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Source: THE BOEING COMPANY
Global Business Logistics

Important issues to consider: To gain a competitive advantage, global sourcing is a given for companies engaging in global marketing strategies. The longer the supply chain, the more cooperation and coordination is required between production, marketing, purchasing and the logistics management group. World trade is growing as fast logistics systems have
had the effect of shrinking the world, empowering competitive trade. Foreign trade has grown in tonnage and in value for the United States and other nations. Lower labor costs from international outsourcing is a critical component of the supply chain. Focused manufacturing fits well into an international logistics strategy.
Global Markets and Global Corporations

Trade barriers continue to fall, accelerating global
business activity. Global markets result from the general homogenization of global needs and wants.
Local needs suborned to lower-priced, higher-quality products. Preferences for international products can also be related to
attempts to copy other more prosperous cultures.
To effectively serve global markets, firms should
consider adopting integrated worldwide strategies. These firms are more likely to search for global sourcing for materials and components, depots, assembly, distribution centers, and logistics. Global firms typically design synchronous strategies around technology, marketing, manufacturing, and logistics.
Value Chain (Michel Porter)
Logistics Value Chain
Value Chain explained
Inbound Logistics Operations preceding Manufacturing Movement of raw materials & components for processing
Operations Storage and movement of raw materials and components within the manufacturing premises Inventory management of stored materials and in-process goods
Outbound Logistics Operations following the production process Warehousing, transportation, inventory management of finished products
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Integrated Value Chain
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Logistics Functions
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Three Categories
Production when should a resource be produced: aggregate resource planning, and production scheduling. where should a resource be produced: facility location and production allocation Storage/Inventory when should a resource (material, machine or labor) be put in inventory and taken out of inventory: economic-order-quantity models, safety stock models and seasonal models, and specialized topics of fleet management, and personnel planning where should a resource be stored: inventory echelons
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Transportation where should resources be moved to, and by what mode and route: terminal location, vehicle routing, and shortest path methods and network flow allocation when should resources be moved: distribution rules
Logistics Functions
Order Processing Inventory Management
Warehousing
Transportation Material handling and storage Logistics packaging Information and use of IT
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Summary
Logistics spans 3 functional areas
Procurement Manufacturing Distribution
Productivity improvement in logistics reduces operating costs
and releases resources. Some ways are inventory reduction, quick response, minimum product damage, reliable and consistent delivery performance and minimum deviations and freight economy Logistics is viewed as a system concept of material flow from the source of supply through manufacturing to final point of consumption. Logistics covers functions like order processing, warehousing, inventory control, transportation, packaging and information flow
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Mumbai Dabbawalas
5000 Dabbawalas
Video
Deliver home cooked food to about 200,000 people around Mumbai
suburb 35-40 tiffins per Dabbawalla, each of 2kg They are transported with cycle, local train or handcart. Color code denotes owner, work address and floor
7am-9am 9am-11am 11am-12pm 12.30pm-1pm 2pm 6pm
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Tiffins collected from homes Board trains, sort boxes at intermediary stations according to delivery area (single tiffin can change hands three to four times) Arrive Bombay, fan out to loading points, more sorting and loading on to handcarts, bicycles and persons Deliveries Process moves into reverse Empty tiffins returned to homes
Dabbawalas- Management facts

Time management and accuracy: Even though customers are
growing, they have color coding system, which ensures that every Tiffin goes to correct person. This meal on wheel system started from British Raj at 1850. Customer is King: They are not being thought in any business schools. They just know to serve the customer in best way. No technical support: They have not more technical or logistic support. They perform with almost 100% accuracy. Marketing and advertising: They have distributed their leaflets with Microsoft laptops in Mumbai, offering mini discount offer for food delivery. Management Presentations: They have Bombay Tiffin Box Supply Charity Trust which represent the whole system. Some of them asked to give presentations in about their management skills
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Question?
Analyze Mumbai Dabbawalas, using Michel Porter
value chain
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Seven Eleven Case Study

Analyze Seven-eleven, using Michel Porter value chain
What are the unique customer service measures that 7-11
employs
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Operations and Supply Chain Management

Module 2 Logistics Management

Syllabus- LOGISTICS MGT.

Logistics Management- The Supply Chain Imperative by Vinod V. Sople

Syllabus- SUPPLY CHAIN MGT.

5. SUPPLY CHAIN MANAGEMENT (1 HR) Supply chain components Economics of distribution

Supplier distributor benchmarking

Distribution networks in practice.

Strategic cost management initiatives across global supply chain

Logistics Management- The Supply Chain Imperative by Vinod V. Sople

So, Logistics and Supply Chain are equivalent terms.

Global Business Logistics

Global Markets and Global Corporations

attempts to copy other more prosperous cultures.

To effectively serve global markets, firms should

Value Chain (Michel Porter)

Logistics Value Chain

Value Chain explained

Integrated Value Chain

Productivity improvement in logistics reduces operating costs

Deliver home cooked food to about 200,000 people around Mumbai

Dabbawalas- Management facts

Seven Eleven Case Study

What are the unique customer service measures that 7-11

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