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1. Infrastructure
2. Taxation
3. Inadequate Information
4. Poor management decisions
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What does bad logistics causes? Costly products
Higher cost of capital
Damaged Products
Excessive movements costs
Worst Economy
Black Market
Exploitation
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Elements of Logistics
Information Management
Inventory Control
Transportation
Warehousing
Packaging
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Importance of 3cs Company
Customer
Competition
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Inbound LogisticsActivities associated with receiving, storing and
distributing inputs to the product such as materialhandling, warehousing, inventory control, vehiclescheduling and returns to suppliers.
It takes care of the procurement cycle.The taskinvolves:
Sourcing Order Placement
Transportation
Receiving
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Outbound LogisticsActivities associate with collecting, storing and
physical distributing the product to the buyers.
It includes distribution of finished goods, order
processing, warehousing, material handling, delivery
vehicle operations, scheduling, shipping etc.
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Logistics Performance cycle It Links the facilities in the value chain with each
other.
These facilities are called nodes and these nodes areconnected by links, called LPCs.
These links are the product transportation andinformation f low.
LPCs are sensitive to input and highly responsive tocustomer needs.
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Contd. Procurement cycle
Manufacturing support cycle
Physical distribution cycle
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SUPPLY CHAIN MANAGEMENT The network of organizations that are having linkages,
upstream and downstream, in different processes and
activities that produce and deliver the value in the
form of products and services in the hands of the
ultimate consumer
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Three flows in SCM Product flow
Information flow
Financial flow
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Participants in SCM Suppliers
Manufacturers
Distributors
Customers
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Importance of SCM Reduced inventory
Better flow of information
Customer satisfaction Competitive edge
Builds trust
Avoids wastage
Quick response
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Difference between Logistics Management
& SCM Concerned with getting
goods & services wherethey are required andwhen they are desired
It is a narrower concept
It is conducted withinthe organization
It originated fromMilitary logistics
It encompasses allactivities associated withmovement of goods fromraw materials stage toend user
It is a broader concept
It functions outside theorganization
It originated fromBusiness logistics
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The objective is tominimize cost
2 f lows: Value flow andinformation flow
The objective is tomaximize profitability
3 f lows: Value,information andfinancial flow
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BULL WHIP EFFECT The different objectives between the stakeholders,
dealers and retailers will cause confusion andfluctuation in order placement
Also different in time period of forecasting in demandby different participants can cause variations in order
placement
It results in overload or shortage of stocks in SKUs
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Causes of Bullwhip Effect No communication up and down in supply chain
Lack of coordination
Delay in flow of information and materials Free return policies
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Impact It increases:
Manufacturing cost
Inventory cost Replenishment lead time
Transportation cost
Labour costs
More Stock-outs Negative effect on performance
Loss of customer service & Loss of sales
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Solution Know your customer
Proper forecast
Better information Perfect logistics
Invest in best talent
Analyse Key Data
Modern technique
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Extended enterprise It is loosely coupled, self organizing network of firm
that combine their economic output to provideproduct and service offerings to the market.
All parties connect through a contract and work assingle corporation.