Professional Documents
Culture Documents
1
Supply Chain Overview
Information
flows
Factory
Transportation
Vendors/plants/ports
Warehousing Transportation
Information flow
5
The Logistics/SCM Mission
Getting the right goods or services to the right
place, at the right time, and in the desired
condition at the lowest cost and highest return on
investment.
Demand forecasting
Purchasing
Requirements planning
Purchasing/
Production planning Materials
Management
Manufacturing inventory
Warehousing
Logistics
Material handling
Packaging
Order processing
Transportation
Customer service
Strategic planning
Information services
Marketing/sales
Finance
CR (2004) Prentice Hall, Inc.
Dickson Chiu 2006 SCM-7
Supply Chain Schematic
Transportation
Customers
Inventory
or supply source
7 orders
%
88 Product
6 Availability--%
86 line items
5 84
4 82
Source: Herb Davis & Company
19 4
19 6
02
20 8
92
00
9
9
9
19
20
19
Year
Dickson Chiu 2006 SCM-11
Traditional Scope of the Supply
Chain
Business logistics
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
Inventory Strategy
• Forecasting
• Storage fundamentals Transport Strategy
• Inventory decisions •Transport fundamentals
• Purchasing and supply •Transport decisions
scheduling decisions
Customer
• Storage decisions service goals
• The product
• Logistics service
• Information sys.
Location Strategy
•Location decisions
•The network planning process
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
Marketing Process is
successfully completed
only when
18
1Arrangements are made to
supply the goods through
selected distribution channels.
2 Products are produced and
priced to satisfy the identified
needs of the customers.
3 Goods are physically supplied
to the buyers at the price and
time selected.
Dickson Chiu 2006 SCM-19
4 An awareness is created among the
buyers about the availability of the
goods through advertisement
5 Other than satisfying the customer’s
needs, the marketing process must
be profitable to the seller
Promotion
Price
Place-Customer
service levels
Transport
Logistics
Inventory
carrying costs costs
Suppliers Customers
Supplier’s Customers/
suppliers End users
Logistics Increase
Logistics
Overhead Tariffs
Overhead
Materials
Materials
Labor Reduction
Labor
CR (2004) Prentice Hall, Inc.
Dickson Chiu 2006 SCM-27
Reality of SCM Scope
on
I nt
ati
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n
org
rdi
oo
an
l) c
iz
ati
na
on
o
niz al
SUPPLY
ati
al
-or ion
CHAIN
ooc
tra nct
ga
MANAGEMENT
rd
(In er-fu
ina
tio
Int
n
Activity and process
administration
CR (2004) Prentice Hall, Inc.
Dickson Chiu 2006 SCM-29
Increasing Significance of
Logistics
Costs are high
About 10.5% of GDP domestically
About 12% of GDP internationally
A range of 4 to 30% of sales for individual firms, avg. about
10%
A high as 70-80% of sales if purchasing and production are
included
Customers are more demanding of the supply chain
Desire for quick response
Desire for mass customization
An integral part of company strategy
Generate revenue
Improve profit
Logistical lines are lengthening
Local vs. long distance supply
Globalization of trade
Logistics is a key to trade and an increased standard of
living
Law of comparative economic advantage applies
Logistics adds value Dickson Chiu 2006 SCM-30
Contemporary IT Applications in
Logistics – Focus of this Course
Tremendous technological advances in past
decades
Logistics management relies on analysis over
massive information from heterogeneous sources
Disparate business functions in service-oriented
economy
Internet and mobile technologies has further
improved logistical effectiveness and efficiency
Enabled logisticians and management to make timely,
informed, and accurate decisions
but create new dimensions of complexity
IT people work closely with logistician and
management
Understand complex requirements
Choose the right technology and design appropriateSCM-31
Dickson Chiu 2006
IT
Some Useful Contemporary IT in
Logistics
eXtended Markup Language (XML)
Service-oriented architecture
Process integration and interaction management
Exceptions, alerts, and relationship management in
logistics
Information integration
Facilitating decision support
Mobile technologies
Radio Frequency Identification (RFID)