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Supply Chain Logistics Management
Zubin PoonawallaPresidentSupply Chain Central Advisory Services
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Supply Chain Logistics Management
• Importance of Logistics to Business
• Logistics Value Proposition
• The Work of Logistics
• Logistics Operations
• Logistics Operating Structures
• Supply Chain Logistics Performance
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Supply Chain Logistics Management
• Scope of Logistics
• Logistics Operations
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Supply Chain Logistics Management
• Scope of Logistics
• Logistics Operations
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Supply Chain Logistics Management
• Scope of Logistics
• Logistics Operations
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Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
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Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
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Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
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Source: Robert V. Delaney, 11th Annual “State Of Logistics Report” © June 5, 2000
1980 GDP $2.88 trillion Logistics Cost $451 billion
15.7% of GDP Trans. Cost $214 billion
47.5 % of Logistics Cost
1999 GDP $9.26 trillion Logistics Cost $921 billion
9.9% of GDP Trans. Cost $554 billion
60.2 % of Logistics CostLogistics Transportation
$ b
illio
n
0
100
200
300
400
500
600
700
800
900
1980 1999
1000
Year
United States Logistics Costs
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Importance of Logistics to Business
• Manufacturing → Consumers
• Logistics Expenditures
• Logistics as a Sustainable Competitive Advantage (SCA)
Supply Chain Logistics Management
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Logistics Value Proposition
• Service
• Cost Minimization
Supply Chain Logistics Management
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Logistics Value Proposition
• Service
• Cost Minimization
Supply Chain Logistics Management
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Logistics Value Proposition
• Service– Logistics Service Quality Process Dimensions– Logistics Service Quality Outcome Dimensions
• Cost Minimization
Supply Chain Logistics Management
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Logistics Value Proposition
• Service– Logistics Service Quality Process Dimensions
• Procedures
• Contact
• Information
• Discrepancy
– Logistics Service Quality Outcome Dimensions
• Cost Minimization
Supply Chain Logistics Management
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Logistics Value Proposition
• Service– Logistics Service Quality Process Dimensions– Logistics Service Quality Outcome Dimensions
• Timeliness
• Availability
• Condition
• Accuracy
• Cost Minimization
Supply Chain Logistics Management
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Logistics Value Proposition
• Service Benefits
• Cost Minimization
Supply Chain Logistics Management
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The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling, Packaging
• Facility Network Design
Supply Chain Logistics Management
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Integrated Logistics
OrderProcessing
Inventory
Transportation
FacilityNetwork
Warehousing, Material Handling
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The Work of Logistics
• Order Processing– order receipt, order assembly, order delivery,
invoicing & collection
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
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The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
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The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
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The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling– sorting, sequencing, product modification &
assembly, and transportation consolidation
• Facility Network Design
Supply Chain Logistics Management
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The Work of Logistics
• Order Processing
• Inventory
• Transportation
• Warehousing, Materials Handling
• Facility Network Design
Supply Chain Logistics Management
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Logistics Operations
Customers
Enterprise
CustomerService
ManufacturingSupport
Procurement(Purchasing)
Suppliers
Information Flow
Inventory Flow
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Logistics Operations
• Inventory Flow– Customer Service– Manufacturing Support– Purchasing (procurement) Support
• Information Flow
Supply Chain Logistics Management
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Logistics Operations
• Inventory Flow
• Information Flow
Supply Chain Logistics Management
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Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
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Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
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Echeloned Structured Logistics
Supplier
Storage orConsolidation
Warehouse Manufacturer
Wholesaler’s Warehouse
orDistribution
Center
Retailer Customer
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Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
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Logistics Operating Structures
• Echelon
• Direct
• Combined
Supply Chain Logistics Management
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Combined Echelon and Direct Structured Logistics
SupplierStorage or
ConsolidationWarehouse
Manufacturer
Wholesaler Warehouse
orDistribution
Center
Retailer Customer
Direct Delivery
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Supply Chain Logistics Performance
• Performance Cycle Structure
Supply Chain Logistics Management
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Sources of Performance-Cycle Variation
OrderTransmission
Time Range - Days1/2 31
CustomerDelivery
Time Range - Days1/2 31
OrderTransportation
Time Range - Days2 104
OrderSelection
Time Range - Days1 202
OrderProcessing
Time Range - Days
1 42
Total Performance Cycle
Time Range - Days
5 4010