Session 2, Supply Chain Management and Integrat.pptVIP

Prepared by Zlatko Muhvic MKTG-7217L Manage the Supply Chain Thought of the day Always be hopeful; there is always sunshine behind the thick clouds. Margarita Dominquez Maclang Session no. 2Supply Chain Management and Integrated Logistics Introduction Learning outcome At the end of this session you will be able to explain the difference between Logistics and Supply Chain Management Topics Definition of logistics Logistics interface with other business functions Factors affecting the cost and importance of logistics Transition to Supply Chain Management Supply Chain vs Logistics Supply chain – extended set of enterprises from the vendor’s vendor to the ultimate consumer – “pipeline” operating as one system Logistics – work required to move and position inventory throughout a supply chain Integrated logistics – network of the logistics systems of the individual companies Logistics Definition “The part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption in order to meet customer requirements” (Council of Logistics Management) 4 Logistics Subdivisions Competitive Advantage Productivity advantage (experience curve) Value advantage Value added role of Logistics Logistics Leverage Every dollar saved in reducing logistics cost is equivalent to a new dollar of profit Logistics Interfaces (1) Operations/Manufacturing Length of production runs Seasonal demand Supply side Packaging Outsourcing Logistics Interfaces (2)) Marketing Logistics Interfaces (3) Finance ROA=gross profit / assets Accounting Provides cost information for logistics operations Logistics Activities Traffic and transportation Warehousing and inventory management Industrial packaging Materials handling Inventory control Order fulfilment Demand forecasting Production planning Purchasing Customer service Reverse log