Logistics Supply Chain Organization.pptVIP

* * Logistics/Supply Chain Organization Chapter 15 CR (2004) Prentice Hall, Inc. A good organization structure does not by itself produce good performance--just as a good constitution does not guarantee great presidents, or good laws, or a moral society. But a poor organization structure makes good performance impossible, no matter how good the individual managers may be. To improve organization structure…will therefore always improve performance. Peter F. Drucker Organizing for Logistics/Supply Chain Management CR (2004) Prentice Hall, Inc. CR (2004) Prentice Hall, Inc. Objectives for Organization Definitively defines responsibility, accountability, and authority–essentials for good management Collects people together in a meaningful way to achieve the goals of supply management Sets initial conditions so that proper cost tradeoffs can be realized Facilitates the implementation of plans as well as the planning process Aids administration CR (2004) Prentice Hall, Inc. Activity Fragmentation in the Supply Chain President Marketing Finance Operations Distribution channels Customer service Field inventories Revenue Cost of capital ROI Inventory carrying costs Supply alternatives and supply costs Warehousing Purchasing Transportation Responsibilities 15-4 CR (2004) Prentice Hall, Inc. Activity Fragmentation in the Supply Chain (Cont’d) President Marketing Finance Operations More inventory Frequent short production runs Fast order processing Fast delivery Field warehousing Less inventory Cheap order processing Less warehousing Long production runs Lowest cost routing Plant warehousing Objectives 15-5 Activity Fragmentation in the Supply Chain (Cont’d) Reasons for fragmentation Lack of understanding of key cost tradeoffs Traditions and conventions Other areas considered to be more important to the firm than logistics Organization structure can be in an evolutionary state Benefits of fragmentation elimination Encourages i