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Logistics Management LSM 730 Lecture 06 Dr. Khurrum S. Mughal 1-1 Reality of SC Scope 1-2 al co in ord co ord ina ti SUPPLY CHAIN MANAGEMENT on na l ati niz rfu nc tio ga ror ati Int e e Int on The Multi-Dimensions of SC on Activity and process administration 1-3 Location Strategy • Location decisions • The network planning process CONTROLLING Customer service goals • The product • Logistics service • Ord. proc. & info. sys. Transport Strategy • Transport fundamentals • Transport decisions PLANNING Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions ORGANIZING Study Framework It involves the decision triangle---The focus is here 1-4 The Logistics Strategy Triangle Inventory Strategy  Forecasting T r a n s p o r tS t r a t e g y  Storage fundamentals T r a n s p o r tfu n d a m e n t a ls  Inventory decisions T r a n s p o r td e c is io n s  Purchasing and supply scheduling decisions Customer  Storage decisions service goals · The product · Logistics service · Information sys. L o c a t i o n S t r a t e g y L o c a t i o n d e c i s i o n s  T h e n e t w o r k p l a n n i n g p r o c e s s 1-5 Relationship of Logistics to Marketing and Production PRODUCTION/ OPERATIONS Sample activities: · Quality control · Detailed production scheduling · Equipment maint. · Capacity planning · Work measurement & standards Interface activities: · Product scheduling · Plant location · Purchasing LOGISTICS Sample activities: · Transport · Inventory · Order processing · Materials handling Interface activities: · Customer service standards · Pricing · Packaging · Retail location Productionlogistics interface Marketinglogistics interface Internal Supply Chain . MARKETING Sample activities: · Promotion · Market research · Product mix · Sales force management 1-21 Marketing Relationship of Logistics to Marketing Product Promotion Price Logistics Place-Customer service levels Lot quantity costs . Transport costs Inventory carrying costs Order processing and information costs Warehousing costs 1-22 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 . 1-8 Logistics/SC in Diverse Areas · Manufacturing—most common · Environment—causing restrictions · Service—emerging opportunities · Non-profits—little explored · Military—long history . 1-9