Pressures for change 1.a significant improvement in communications systems and information technology 2.regulatory changes and developments 3.increasing.

PLANNING FRAMEWORK FOR LOGISTIC

Pressures for change

1.a significant improvement in communications systems and information technology

2.regulatory changes and developments

3.increasing customer service requirements

4.a shortening of product life cycles

5.the need for improved financial performance at a time when companies and economies are under severe pressure

6.the development of new players with new roles in channel distribution

7.the never-ending pressures to reduce inventories and their associated costs

8.the need to adopt a wider supply chain perspective when planning and redesigning logistics operations.

Strategic planning overview

external environment

internal factors

There are different parts of the supply chain that can be influential and can necessitate the development of a very different type of business environment :

1.brewing the beer: this is the traditional role concerned with production and packaging.

2.environments in which to drink beer: traditionally these have been pubs, clubs and bars.

3.environments in which to eat food and drink beer: these are often known as leisure or lifestyle experiences.

4.drinking beer at home: another important development is the increase in the home consumption of beer and the fact that this is primarily bought from supermarkets, specialist shops, wholesalers or corner shops.

Logistics design strategy

Important issues:1.the need to link the logistics or

distribution plan directly with the corporate plan.

2.the extent or coverage of the logistics strategic plan.

3.issue is whether or not a company has a structured logistics plan at all.

logistics process design- is concerned with ensuring that business methods are aligned and organized so that they operate across the traditional company functions and become supply chain-oriented.

logistics network design- refers to the more traditional elements of logistics strategy.

logistics information system design- should include all of those information-related factors that are vital to support the processes and the physical structure of the operation.

logistics organizational structure- It is the experience of many companies that an inadequate organizational structure can lead to substantial problems.

Product characteristicsFour main categories :

1.volume to weight ratiovolume and weight characteristics are

commonly associated, and their influence on logistics costs can be significant.

2.value to weight ratioproduct value is also important to the

planning of a logistics strategy3.substitutability

the degree to which a product can be substituted by another will also affect the choice of distribution system.

4.high-risk productsthe characteristics of some

products present a degree of risk associated with their distribution (perish ability, fragile, hazard/danger, contamination potential, and extreme value)

hazardous goods fragile products perishable goods time-constrained products very high-value products time-constrained products very high value products

The product life cycle1.introductory stage: need for a high response to

demand with a logistics structure that gives stock availability and quick replenishment, and can react to sudden demand increases.

2.growth stage: the requirements for distribution are now for a better- balanced, more cost-effective system. The trade-off between service and cost can be realized.

3.maturity stage: where the introduction of competitive products and substitutes will increase price and service competition.

4.decline stage: the logistics system needs to support the existing business but at minimum risk and cost.

Packagingthe packaging of a product is broadly

determined for product promotion and product protection, the latter being the function that is particularly pertinent to logistics.

Unit loadsthe idea of unit load for logistics was

developed from the realization of the high costs involved in the storage and movement of products – particularly in the inefficient manual handling of many small packages.

LOGISTIC PROCESSES

The importance of logistics processes :

incorrect transcription of the original order requirements

incorrect notification of availability incorrect selection or picking of the

order damage the goods late delivery delivery to an incorrect address invoicing to the incorrect address.

Three Essential Elements

customer facing cross functional time based

Key Logistics Processes

Order Fulfillment-is concerned order with the ability to turn a customer's specified requirements into an actual delivered order.

New Product Introduction – an area where many companies find they have problems. One of the main problems is the inability to respond sufficiently quickly.

New Product Development – the idea is to design the product so that it can reach the market as quickly as possible from the initial design plan through to availability.

Product Returns – this may be for returns that come back through the existing distribution network or through a new one that is specifically set up.

Aftermarket or service part logistics – for many companies the supply of a product or series of products is inextricably linked to the subsequent provision of service parts to support the continuous use of the initial product.

Information Management – advancement in information technology have enabled a vast amount of detailed data and information to be available and manipulated very easily.

Associated processes that could also be relevant

supplier integration quality strategic management maintenance human resource management environmental management

Three different process categories

Basic Processes Benchmark Processes Competitive Processes

Main methods of differentiating between the various factors that are fundamental to most logistics operations

Market segmentation Customer types Product Groups Customer Service Requirements Order Type Channel Type

Tools and Techniques

Pareto Analysis Market or Customer Segmentation Customer Service Studies Relationship Mapping Process charts Value/time Analysis Time-based Mapping