murphy ppt ch01

7/30/2019 Murphy Ppt Ch01

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Learning Objectives

To understand the economic impacts oflogistics

To learn what logistics is To learn about the increased

importance of logistics

To understand the systems and totalcost approaches to logistics

Pearson Education, Inc. publishing as Prentice Hall1-1


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Learning Objectives

To expose you to logisticalrelationships within the firm

To learn about marketing channels To provide a brief overview ofactivities in the logistics channel

To familiarize you with logisticscareers

1-2 Pearson Education, Inc. publishing as Prentice Hall


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Key Terms

Cost trade-offs

Disintermediation

Economic utility

Form utility

Landed costs

Logistics

Marketingchannels

Mass logistics

Materialsmanagement

Physicaldistribution

Place utility

Possession utility

Postponement

Power retailer1-3

Pearson Education, Inc. publishing as Prentice Hall


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Key Terms

Sorting function

Stock-keepingunits (SKUs)

Stockouts

Sustainableproducts

Systemsapproach

Tailored logistics

Time utility

Total costapproach



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CHAPTER 1

An Overview of

Logistics



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Economic Impacts ofLogistics

Macroeconomic Impacts

Economic Utility

Possession utility Form utility

Place utility

Time utility



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Table 1-1:The Cost of the Business LogisticsSystem in Relation to a Countrys Gross

Domestic Product (GDP)



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Logistics: What It Is

Council of Logistics Managementdefinition:

Logistics is that part of the supply chainprocess that plans, implements, andcontrols the efficient, effective forwardand reverse flow and storage of goods,

services, and related information betweenthe point of origin and the point ofconsumption in order to meet customersrequirements.

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Source: www.cscmp.org



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The Increased Importance ofLogistics

A Reduction in Economic Regulation

Changes in Consumer Behavior

Technological Advances

The Growing Power of Retailers

Globalization of Trade



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The Systems and Total CostApproaches to Logistics

Systems Approach

Interdependence of company and

logistics goals Interdependence of functional areas

Stock-keeping units (SKUs)

Interdependence of logistics activities or

Intrafunctional logistics



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Figure 1-1: Control Over the Flow ofInbound and Outbound Movements



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Figure 1-2The Utilization ofLogistics Serviceas a Major Selling

Point



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The Systems and Total CostApproaches to Logistics

Total Cost Approach

Cost trade-offs: changes to oneactivity cause some costs to increaseand others to decrease

Total Logistics Concept: to find the

lowest total cost that supports anorganizations customer servicerequirements



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Logistical Relationships withinthe Firm

Finance

Production Marketing



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Marketing

Place Decisions

Price Decisions

Landed costs

Product Decisions

Stockouts

Promotion Decisions


Logistical Relationships withinthe Firm


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Marketing Channels

set of institutions necessary to transferthe title to goods and to move goods fromthe point of production to the point ofconsumption and, as such, which consistsof all the institutions and all the marketingactivities in the marketing process.Source: American Marketing Association Dictionary, www.marketingpower.com

Channel members Manufacturers

Wholesalers

Retailers 1-16 Pearson Education, Inc. publishing as Prentice Hall


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Marketing Channels

Ownership channel Covers movement of the title to the

goods

Negotiations channel Buy and sell agreements are reached

Financing channel Payments for goods

Promotions channel Promoting a new or existing product Logistics channel

Moving and storing product

throughout the channel 1-17 Pearson Education, Inc. publishing as Prentice Hall


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Channel Intermediaries/Facilitators

Ownership channel Banks, finance companies

Negotiations channel

Brokers Financing channel

Banks, insurance companies, financecompanies

Promotions channel Advertising agencies, public relations agencies

Logistics channel Freight forwarders



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Activities in the LogisticalChannel

Customer service Facility location

decisions

Inventorymanagement Order

management Procurement Transportation

management

Demandforecasting

Internationallogistics

Materials handling Packaging Reverse logistics

Warehousingmanagement



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Responsibilities of LogisticsManagers

A specialist

Freight rates

Warehouselayouts

Inventoryanalysis

Production

Purchasing

Transportation

law

A generalist

Understandsfunctionalrelationships

Relates logistics toother firm

operations,suppliers,customers

Controls largeex enditures1-20



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Logistics Careers

Most business organizations arepotential employers

Logistician highlighted as one onthe 50 best careers for the year 2010Source: U.S. News & World Report

Career paths for the two most recent

CEOs of Wal-Mart includedassignments in logistics anddistribution.



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Logistics Professionalism

APICS The Association for Operations Management(www.apics.org)

American Society of Transportation and Logistics(AST&L) (www.astl.org)

Council of Supply Chain Management Professionals(www.cscmp.org)

Delta Nu Alpha (DNA) (www.deltanualpha.org)

International Society of Logistics (SOLE) (www.sole.org)

Supply Chain & Logistics Association Canada (SCL)(www.sclcanada.org)

The Chartered Institute of Logistics and Transport in

the UK CILT (UK) (www.ciltuk.org.uk) Warehousing Education and Research Council (WERC)1-22

Professional Organizations Dedicated to Advancing the

Professional Knowledge of their members:



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Copyright Notice



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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

murphy ppt ch01

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