logistics versus supply chain-version anglaise

8/9/2019 LOGISTICS Versus SUPPLY CHAIN-Version Anglaise

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DISTINCTION BETWEENDISTINCTION BETWEEN

LOGISTICS FUNCTION &LOGISTICS FUNCTION &

SUPPLY CHAIN CONCEPTSUPPLY CHAIN CONCEPT

LOGISTICS

VERSUS

SUPPLY CHAINPart 1


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Logistics function

Academic definition (by APICS Dictionary):

The art and science of obtaining, producing and distributing material

and product in the proper place and in the proper quantities in a manner

that minimizes total costs for levels of service desired.

Responsability:

Achieve tasks for of the enterprise

- Procurement for manufacturing department

- Distribution for sales department

Tasks:

*Storage:

- raw material and components

- work in process- finished goods (warehouse)

*Transportation and delivery

*Handling

- Manufacturing

- Warehouse

American

Production and

Inventory

Control

Society

the benefit of other functions


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Logistics function

Consequences:

- Just a part of

- Under permanent stress due to late minute adjustments

- Under customer focus and top management focus incase of

Issue:

- Cost Center

- Target for cost killers

an overall process

troubles.


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Common Misleading:Confusion between

- Logistics Function

and

- Supply Chain Concept

Considered as an extendedlogistics function!


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Master an overall process:

From vendors to customers through manufacturer

Master 3 flows:

- Physical flow

- Information flow

- Cash flow

Focus:

- SPAN of TIME for the overall process

- CASH saving with shorter SPAN of TIME

Supply Chain Concept


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INVESTIGATIONS: Physical flow

Information flow

Cash flow

TARGET:Shift the CEO understanding of

logistics tasks From cost contributor

To profit contributor


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Physical flows

Information flows

Cash flows

Physical flows

Vendors Manufacturing Warehouse Distribution

NetworkCustomer

Production Distribution

E-business

Whole Sale Dealer

Supermarket

Transportation

A logistics task

Cost

Physical Flows


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Vendors Manufacturing Warehouse Distribution

NetworkCustomer

Transportation

A logistics task

Cost

Information flows

Cash flows

Physical flows

Warehousing

Manutention

Physical flows


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Information flows

Cash flows

Physical flows

Pull mode

Academic definition:

In production, the production of items only asdemanded for use or to replace those taken for

use.

In distribution, a system for replenishing field

warehouse inventories, where replenishement

decisions are made

Two ways information system:

- Coordination

- Tracking

A Supply chain task

Monitoring and Control

Information flows Information Flows


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Reduced lead timeCost

Physical flows

Information flows

Cash flows

Physical flows

EXPENSES RECOVERY

CostCost Cost

Buy Manufacture Warehouse

Transportation Transportation

On the structure

Benefit

Process

Net Contribution to the PROFIT

TARGET

Sold

Transportation

for the process

lead time for the

Cash

Flows


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Information flows

Cash flows

Physical flows

Academic definition (by APICS Dictionary):

A planned series of actions or operations that

advances a material or procedure from one stage

of completion to another .

Focus:

- SPAN of TIME to EXECUTE

- A SET of action (added value)- and WAITING TIME (no added value)

Process

American

Production and

Inventory

Control

Society


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Flow Chart for a ProcessInformation flowsCash flows

Physical flows

EndStart

SPAN of TIME

Waiting time

Motion / action

Legend:

IssueAction

Action to reduce SPAN of TIME

To reduce cash flow need

To increase profit

Transport(logistics)

Cost

Waiting itme(supply chain

monitoring)Savings

Waiting timecheaper transport

(supply chainoptimization)

More savings

Principle: Lean Manufacturing (*)

Lean Supply chain

(*) Academic definition:

A philosophy of production that

emphasizes the minimization of

amount of all the ressources

(including time)


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A worldwide environment

permanently on the move

Logistics function: Task provider for other functions

Cost Center under Cost Killer target

Supply Chain Concept: Overall process minded

Compression of process lead time

Net profit contributor


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WORLWIDE ENVIRONMENTWORLWIDE ENVIRONMENT

oo Competition and marketsCompetition and markets

oo Permanent adjustmentsPermanent adjustments

Supply Chain OrganisationSupply Chain Organisation

on the moveon the move

LOGISTICS

VERSUS

SUPPLY CHAINPart 2


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A need for permanent adjustment A Set of logistics

Manufacturing cost:

Automation

Cheap labor: low cost

countries

Distribution cost:

Distance / oil

CustomsShipment:

Lead time

Tracking

Market:

New products

New services

Regulation

CO2

Purchasing policy

Long distance procurement

for cheaper buying cost

New product introduction

Market event

End of product life

Reverse logistics

Customer services


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NETWORK under permanent

re-engineering

Physical network

Information network

Long distance

procurement

Splitting of the

manufacturing

organisation

New markets

New location


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Supply Chain Manager

CEO

Supply Chain

Engineering

Supply Chain

Adjustement and tuning

Engineering

Logistics operations

Supply Chain Manager

Concurrence / no concurrence to

Strategic decisions (market, setting up )

Resourcing decisions (supply chain adjustment).

New product design (reverse logistics fitting)

Position and resources:

Responsibility:


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Engineering

to design the supply chain

Responsibility:

1. Design an optimum worldwide supply chain.

2. Examine the current supply chain.

3. Assess the logistics networks strategic environment.

4. Start a continuous common benchmarking process.

5. Establish proposed logistics network requirements.

6. Coordinate data development.

7. Generate a custom strategic model and optimize.

8. Analyze results and develop recommendations.

9. Document the project.

Resources


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Engineering

to adjust and tune

Responsibility:

1. Develop the network requirements.

2. Establish customer requirements.

3. Identify marketing requirements.

4. Forecast customer demands.

5. Identify financial requirements.

6. Identify procurement requirements.

7. Identify production requirements.

8. Determine logistics requirements.

9. Identify international requirements.

10. Identify organizational requirements.

Resources


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Logistics operations

Responsability:

Planning, execution, control and monitoring of supply chain

activities with the objective of synchronizing supply with

demand and measuring performance globally.

Tasks:- Warehouse and inventory

- Transport

- Handling on manufacturing flow and in warehouse

Target:- minimum cost

- due date and service

- tracking

- limited damage to the goods


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LOGISTICS

VERSUS

SUPPLY CHAIN

logistics versus supply chain-version anglaise

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