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    Business Logistics/Supply Chain-A Vital Subject

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    Ahmed Maher
    1) Logistics is the process of planning, implementing, and controlling the efficient flow of raw materials, work-in-progress inventory, and finished goods from point of origin to point of consumption. It aims to meet customer requirements cost effectively. 2) A firm's supply chain includes upstream suppliers and downstream customers, and involves physical and information flows. Key logistics activities that significantly impact costs include transportation, inventory management, and order processing. 3) Logistics is important to business strategy as it can generate revenue, improve profitability, and add customer value through customized and quick response times. It also interfaces closely with production and marketing functions.

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    Business Logistics/Supply Chain-A Vital Subject

    Uploaded by

    Ahmed Maher
    45 views13 pages
    1) Logistics is the process of planning, implementing, and controlling the efficient flow of raw materials, work-in-progress inventory, and finished goods from point of origin to point of consumption. It aims to meet customer requirements cost effectively. 2) A firm's supply chain includes upstream suppliers and downstream customers, and involves physical and information flows. Key logistics activities that significantly impact costs include transportation, inventory management, and order processing. 3) Logistics is important to business strategy as it can generate revenue, improve profitability, and add customer value through customized and quick response times. It also interfaces closely with production and marketing functions.

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    Chapter 1

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    1) Logistics is the process of planning, implementing, and controlling the efficient flow of raw materials, work-in-progress inventory, and finished goods from point of origin to point of consumption. It aims to meet customer requirements cost effectively. 2) A firm's supply chain includes upstream suppliers and downstream customers, and involves physical and information flows. Key logistics activities that significantly impact costs include transportation, inventory management, and order processing. 3) Logistics is important to business strategy as it can generate revenue, improve profitability, and add customer value through customized and quick response times. It also interfaces closely with production and marketing functions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    45 views13 pages

    Business Logistics/Supply Chain-A Vital Subject

    Uploaded by

    Ahmed Maher
    1) Logistics is the process of planning, implementing, and controlling the efficient flow of raw materials, work-in-progress inventory, and finished goods from point of origin to point of consumption. It aims to meet customer requirements cost effectively. 2) A firm's supply chain includes upstream suppliers and downstream customers, and involves physical and information flows. Key logistics activities that significantly impact costs include transportation, inventory management, and order processing. 3) Logistics is important to business strategy as it can generate revenue, improve profitability, and add customer value through customized and quick response times. It also interfaces closely with production and marketing functions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 13

    Business Logistics/Supply

    Chain—A Vital Subject

    The supply chain is simply another way of


    saying “the whole process of business.”

    Chapter 1
    CR (2004) Prentice Hall, Inc.
    The Immediate Supply Chain for an Individual Firm

    Transportation Transportation Customers


    Warehousing

    Information
    flows
    Factory

    Transportation

    Vendors/plants/ports
    Warehousing Transportation

    CR (2004) Prentice Hall, Inc. 1-2


    Logistics Defined
    Logistics is the process of planning, implementing and
    controlling the efficient, cost-effective flow and storage
    of raw materials, in-process inventory, finished goods
    and related information from the point of origin to point
    of consumption for the purpose of conforming to
    customer requirements.
    Council of Logistics Management

    Supply Chain Management Defined


    SCM is the integration of all activities associated with the
    flow and transformation of goods from raw materials
    through to end user, as well as information flows, through
    improved supply chain relationships, to achieve a
    sustainable competitive advantage.
    Handfield and Nichols
    CR (2004) Prentice Hall, Inc.
    Logistics Supply Chain
    The Logistics/SC Mission

    Getting
    Getting thethe right
    right goods
    goods oror services
    services
    to
    to the
    the right
    right place,
    place, at
    at the
    the right
    right time,
    time,
    and
    and inin the
    the desired
    desired condition
    condition at at the
    the
    lowest
    lowest cost
    cost and
    and highest
    highest return
    return onon
    investment.
    investment.

    CR (2004) Prentice Hall, Inc.


    Critical Customer Service
    Loop
    C ustom er o rder processing (an d
    tran sm ittal)

    T ran spo rtatio n


    C ustom e rs

    Inventory
    or sup ply so urce

    CR (2004) Prentice Hall, Inc.


    Scope of the Supply Chain for Most Firms
    Business logistics

    Physical supply Physical distribution


    (Materials management)

    Sources of Plants/
    Customers
    supply operations
    • Transportation • Transportation
    • Inventory maintenance • Inventory maintenance
    • Order processing • Order processing
    • Acquisition • Product scheduling
    • Protective packaging • Protective packaging
    • Warehousing • Warehousing
    • Materials handling • Materials handling
    • Information maintenance • Information maintenance

    Focus firm’s internal supply chain 1-14


    CR (2004) Prentice Hall, Inc.
    The Physical supply channel: refers to
    the time & space gap between a firm’s
    immediate material sources and its
    processing points.
    The Physical distribution channel:
    refers to the time & space gap between
    the firm’s processing points and its
    customers.

    Scope of the Supply Chain for


    Most Firms
    Key Logistics Activities:
    - Highly affect the total cost of logistics
    - Must exist in every supply chain
    Support Logistics Activities:
    - Do not highly affect the total cost of
    logistics
    - Might not exist in some supply chains

    Key & Support Logistics


    Activities
    Key & Support Logistics Activities
     Key Activities
    - Customer Service
    - Transportation
    - Inventory management
    - Order Processing

     Support Activities
    - Warehousing
    - Materials handling
    - Acquisition (purchasing)
    - Packaging
    - Information Maintenance
    CR (2004) Prentice Hall, Inc.
    Significance of Logistics
     Costs are significant
     For the firm, logistics costs ranged from 4% to over 30% of sales.
     Customers increasingly want quick customized response
     Desire for quick response
     Desire for mass customization
     Logistics is important to strategy
     Generate revenue
     Improve profit
     Supply and distribution lines are lengthening
     Local vs. long distance supply

     Logistics adds significant customer value


     Time and place utilities
    Relationship of Logistics to
    Marketing and Production
    LOGISTICS
    Sample
    activities: MARKETING
    PRODUCTION/ Transport Interface Sample
    OPERATIONS  Inventory
    Interface activities: activities:
    Sample activities:  Order  Customer
     Quality control activities:  Promotion
     Product processing service  Market
     Detailed production
    scheduling  Materials standards research
    scheduling  Plant  Pricing
     Equipment maint. handling  Product
    location  Packaging
     Capacity planning mix
     Purchasing  Retail  Sales force
     Work measurement
    location management
    & standards

    Production-
    logistics Marketing-
    interface logistics
    interface

    Internal Supply Chain


    CR (2004) Prentice Hall, Inc. 1-21
    Relationship of Logistics to Production
    Coordinates through scheduling and strategy—
    make-to-order or make-to-stock
    An integral part of the the supply chain
    Affects total response time for customers
    Shares activities such as inventory planning
    Costs are in tradeoff
    Production lot quantities affect inventory
    levels and transportation efficiency
    Production response affects transportation
    costs and customer service
    Production and warehouse location are
    interrelated
    CR (2004) Prentice Hall, Inc.

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