Lecture Logistics management: Lecture 4 - Dr. Khurrum S. Mughal

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Logistics Management LSM 730 Lecture 4 Dr. Khurrum S. Mughal 1-1 Scope of the Supply Chain for Most Firms Business logistics Physical supply (Materials management) Sources of supply Physical distribution Plants/ operations • • • • • • • • Transportation Inventory maintenance Order processing Acquisition Protective packaging Warehousing Materials handling Information maintenance Customers • • • • • • • • Transportation Inventory maintenance Order processing Product scheduling Protective packaging Warehousing Materials handling Information maintenance Focus firm’s internal supply chain 1-14 Key Activities/Processes • Primary – Setting Customer service goals – Transportation – Inventory Management – Order Processing and Information Flows • Secondary, or supporting – Warehousing – Materials Handling – Acquisition (Purchasing) – Protective Packaging – Product Scheduling – Information Maintenance 1-3 Key Activities/Processes • Primary – Setting Customer service goals (work with marketing) • Identify customer needs and wants for logistics customer service • Determine customer response to service • Set customer service level – directly related to costs – Transportation (primary cost absorbing activity which adds place value) • • • • • • • Mode and transport service selection Freight consolidation Carrier Routing Vehicle Scheduling Equipment Selection Claims Processing Rate Auditing 1-4 Key Activities/Processes • Primary – Inventory Management (adds time value to the products, bridges the gaps between supply and demand) • • • • • Raw Materials and finished goods stocking policies Short term sales forecasting Product mix at stocking points Number, size and location of stocking points Just-in-time (low levels), push (forecasting based) and pull (order based) strategies – Order Processing and Information Flows (Activity that triggers the whole process) • Sales order – inventory interface procedures • Order information transmittal methods • Ordering Rules 1-5 Key Activities/Processes • Secondary, or supporting – Warehousing • • • • Space Determination Stock layout and dock design Warehouse configuration Stock placement – Materials Handling • • • • Equipment selection Equipment replacement policies Order-picking procedures Stock storage and retrieval 1-6 Key Activities/Processes • Secondary, or supporting – Acquisition (Purchasing) • Supply source selection • Purchase timing • Purchase quantities – Protective Packaging • Handling • Storage • Protection from Loss and Damage 1-7
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