LOGISTICS AND SUPPLY CHAIN MANAGEMENT

LOGISTICS AND

SUPPLY CHAIN MANAGEMENT

“Humble, Back Office Tasks”

AGENDA• INTRODUCTION

• BUILDING BLOCKS– Newfound Importance

– Inventory Management• Reasons for Holding

• Holding Costs

• Reducing

• Inventory Savings

AGENDA• BUILDING BLOCKS

– Transportation and Fulfillment• Essentials

• Third Party Logistics (3PL)

– Order, Invoices, Payments

AGENDA• SUPPLY CHAIN MANAGEMENT

– What It Is• Supply Chains

• Definition

– Implementation Schemes• ECR

• Rapid Response

AGENDA• PUTTING IT ALL TOGETHER

– Efficiency versus Effectiveness

– Why Now

• Summary and Conclusions

INTRODUCTION

• Traditionally – Flow

– Physical Goods

– Distribution

– Finished Goods

INTRODUCTION

• Now, SCM– Store and Flow

– Goods, Services, Related Information

INTRODUCTION

• Now, SCM– Extended Channel

• Supply• Production• Distribution• Consumption• Disposal

INTRODUCTION

• Now, SCM– Inventory

• Raw Materials

• Work in Process

• Finished Goods

INTRODUCTION• Now, SCM

– Activities• Transportation• Order Processing• Materials Handling and Packaging• Warehousing• Forecasting• Other

INTRODUCTION• Now, SCM

– Focus• Cost

• Investment

• Service

• Profit

AGENDA• BUILDING BLOCKS

– Newfound Importance

– Inventory Management• Reasons for Holding

• Holding Costs

• Reducing

• Inventory Savings

BUILDING BLOCKS

• Newfound Importance– Quality

– Effectiveness

– Efficiency

BUILDING BLOCKS

• Inventory Management– Reasons for Holding

• Demand surges• Service• Gaps

– temporal– spatial

BUILDING BLOCKS

• Inventory Management– Reasons for Holding

• Uncertainty• Economies

– production– distribution– purchasing– financing

BUILDING BLOCKS

• Inventory Management– Holding Costs (% and $)

• Capital

• Storage

• Obsolescence

• Quality

BUILDING BLOCKS

• Inventory Management– Reducing Inventory

• “Obvious”– Avoid FISH– Lengthen PLC– Find faster vendors– Locate cheaper warehouse

BUILDING BLOCKS

• Inventory Management– Reducing Inventory

• “Obvious”– Avoid FISH– Lengthen PLC– Find faster vendors– Locate cheaper warehouse

BUILDING BLOCKS

• Inventory Management– Reducing Inventory

• “Less Obvious”– Forecasting– Alter production– Simplify– Modularize– Routinize

BUILDING BLOCKS

• Inventory Management– Inventory Savings

• Pseudo– Moving the bubble– Sacrifice service– Sacrifice profits

BUILDING BLOCKS

• Inventory Management– Inventory Savings

• Real– (moving from) Push– (moving to) Pull

BUILDING BLOCKS

• Fulfillment and Transportation– “Humble tasks”

BUILDING BLOCKS

• Fulfillment and Transportation– Essentials

• Transportation

• Warehousing– (past was) storage– (future is) movement

BUILDING BLOCKS

• Fulfillment and Transportation– Essentials

• Distribution Centers• Cross Docking

– Production– Transportation– Distribution– Supply

BUILDING BLOCKS

• Fulfillment and Transportation– 3PL

• More than transportation

• All aspects of fulfillment

BUILDING BLOCKS• Fulfillment and Transportation

– 3PL

BUILDING BLOCKS

• Orders, Invoices, Payments– Reduction

• Human intervention

• Documents

• Time

• Errors

• Money

BUILDING BLOCKS

• Orders, Invoices, Payments– IT/IS

• ERP

• EDI– VAN– Web-enabled

AGENDA• SUPPLY CHAIN MANAGEMENT

– What It Is• Supply Chains

• Definition

– Implementation Schemes• ECR

• Rapid Response

SUPPLY CHAIN MANAGEMENT

• What It Is– Extended Enterprise

• Set of entities

• Collective action

• Create value

SUPPLY CHAIN MANAGEMENT• What It Is

– Extended Enterprise

Suppliers

Suppliers

Retailers

Retailers

Manufacturer

Consumers

Consumers

Supply Chain Enablers

SUPPLY CHAIN MANAGEMENT• What It Is

– Definition• Organizing concept• Marketing concept• Logistics• Operations• IT/IS• ABC/ABM• Channel management

SUPPLY CHAIN MANAGEMENT

• Implementation Schemes– Efficient Consumer Response

• Foci– Continuous replenishment– Efficient pricing and promotion– Changes in product introduction– Changes in merchandising– Knowledgeable consumers

SUPPLY CHAIN MANAGEMENT

• Implementation Schemes– Efficient Consumer Response

• Efficiency – Aggregation– Categories– Not items

SUPPLY CHAIN MANAGEMENT

• Implementation Schemes– Efficient Consumer Response

• Continuous Replenishment – ABC/ABM– KBM– VMI

SUPPLY CHAIN MANAGEMENT

• Implementation Schemes– Efficient Consumer Response

• Obstacles – Standards– Coherence

SUPPLY CHAIN MANAGEMENT

• Implementation Schemes– Quick Response

• Similarities– Pull– Cooperation– KBM– FISH– FMCG

SUPPLY CHAIN MANAGEMENT

• Implementation Schemes– Quick Response

• Differences– Postponement– Less about merchandising– More about manufacturing– Integration

AGENDA• PUTTING IT ALL TOGETHER

– Efficiency versus Effectiveness

– Why Now

PUTTING IT ALL TOGETHER

• Efficiency versus Responsiveness– Brand Dichotomy

• Functional

• Innovative

PUTTING IT ALL TOGETHER• Efficiency versus Responsiveness

– Brand Dichotomy

PUTTING IT ALL TOGETHER• Efficiency versus Responsiveness

– Brand Dichotomy

PUTTING IT ALL TOGETHER

• Why Now– Pressure

• Competition

• Margin

• Turnover

PUTTING IT ALL TOGETHER

• Why Now– IT/IS

– ABC/ABM

– Culture

– Standards

– Sustainable Competitive Advantage

SUMMARY AND CONCLUSIONS