BA 308B and LOM 408B/5330 Business Logistics Systems
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BA 308B and LOM 408B/5330 Business Logistics Systems • Course Home Page: www.umsl.edu/~campbell/308B/308BSYL_W03.htm www.umsl.edu/~campbell/308B/408BSYL_W03.htm • James Campbell’s home page with link to BA 308B and LOM 408B/5330: www.umsl.edu/~campbell
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BA 308B and LOM 408B/5330 Business Logistics Systems. Course Home Page: www.umsl.edu/~campbell/308B/308BSYL_W03.htm www.umsl.edu/~campbell/308B/408BSYL_W03.htm James Campbell’s home page with link to BA 308B and LOM 408B/5330: www.umsl.edu/~campbell. Chapter 1: Introduction. - PowerPoint PPT Presentation
Transcript of BA 308B and LOM 408B/5330 Business Logistics Systems
BA 308B and LOM 408B/5330Business Logistics Systems
• Course Home Page: www.umsl.edu/~campbell/308B/308BSYL_W03.htmwww.umsl.edu/~campbell/308B/408BSYL_W03.htm
• James Campbell’s home page with link to BA 308B and LOM 408B/5330: www.umsl.edu/~campbell
Chapter 1: Introduction
• Syllabus.
• Definitions.
• Scope of logistics.
• Activities.
• Key Trends.
Definitions
• Logistics - Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. (CLM)
• Supply Chain Management - the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. (CLM)
• Logistics - Science of managing (controlling) the movement and storage of goods (or people) from acquisition to consumption.
• Logistics - Science of managing the movement and storage of goods (or people) from acquisition to consumption.
• NOT concerned with Production.• NOT concerned with Military Logistics.
– Though many of same techniques and analyses are used for business and military logistics.
• Goods: Raw Materials Final products, and everything in between.
• Logistics for services & people similar to goods logistics.– Police, fire, ambulance, passenger airlines, taxi cabs, etc.
Definition
Definition
• Logistics - Science of managing the movement and storage of goods (or people) from acquisition to consumption.
• Movement = Transportation (between locations).• Storage = Inventory, Warehousing (at locations).
• Difference between acquisition and consumption is a matter of space and time.
• Focus: Best way to overcome space and time that separates acquisition and consumption.
Why Things Are Where They Are
• Why is St. Louis here?
• Why are New York, Los Angeles, etc. where they are?
• Why are some things produced in certain places - and other things produced everywhere? – See book example with VCRs and software (p. 4)
• Why are bananas for the USA grown in Central and South America, but oranges for the USA are grown in Florida and California?
• Cost to grow (¢/lb) Bananas Orangesin USA 25 20in Central America 10 15
• Logistics cost (¢/lb) to USA to Central Americafrom USA 10 15from Central America 20 5
Consume Consume in Bananas Total Cost in USA Central Americagrow in USA 35 = 25 + 10 40 = 25 + 15grow in Central America 30 = 10 + 20 15 = 10 + 5
Result: Grow bananas only in Central America
Bananas and Oranges
• Cost to grow (¢/lb) Bananas Orangesin USA 25 20in Central America 10 15
• Logistics cost (¢/lb) to USA to Central Americafrom USA 10 15from Central America 20 5
Consume Consume in Oranges Total Cost in USA Central Americagrow in USA 30 = 20 + 10 35 = 20 + 15grow in Central America 35 = 15 + 20 20 = 15 + 5
Result: Grow oranges in both USA and Central America
Bananas and Oranges
• Inexpensive transportation:– Allows specialization in space.– De-couples supply and demand regions.– Increases availability and competition.
• Inexpensive inventory/warehousing: – Allows specialization in time.– De-couples supply and demand in time.– Increases availability and competition.
Inexpensive Transportation and Inventory
Supply Production Consumption
Scope of Logistics
Transportation Transportation
Information Information
Physical DistributionOutbound
Materials ManagementInbound
52 Retail Outlets in USA...
Retail Outlets
...served by 5 Warehouses
Retail Outlets
Warehouses
Single stop and multi-stop routesSEA
LA
NY
ATL
CHI
2 Plants, 5 Warehouses
Plants
Warehouses
P1
P2
SEA
LA
NY
ATL
CHI
Outbound Distribution System
Retail Outlets
Plants
Warehouses
2 Plants, 5 Warehouses, 52 Retail outlets
P1
P2
SEA
LA
NY
ATL
CHI
Inbound Distribution System
Plants
Warehouses
Plants
Supply Points
Sub-assembly plants
9 Suppliers, 3 Sub-assembly plants, 2 Plants
P1
P2
LA
Total Distribution System
Retail Outlets
Plants
Warehouses
Supply Points
Sub-assembly plants
9 Suppliers, 3 Sub-assembly plants, 2 Plants, 5 Warehouses, 52 Retail outlets
P1
P2
SEA
LA
NY
ATL
CHI
Total Distribution System9 Suppliers, 3 Sub-assembly plants, 2 Plants, 5 Warehouses, 52 Retail outlets
CUSTOMERS
P1
P2
SEA
LA
NY
ATL
CHI
• Transportation - Chapter 6 & 7.
• Inventory - Chapter 8, 10, 11, 12.
• Location - Chapters 13 & 14.
• Support Activities:– Customer service, order processing, packaging,
warehousing, purchasing, materials management, information management.
Logistics Activities
• Supply chain integration.• Information technology.• Global markets and competition.• Quality emphasis. • Service industries. • Product variety.• Quick response.• Disruptions, shortages, inflation, recession.• Regulation.• Security.
Key Trends In Logistics
• $1,000,000,000,000 per year – Spent on logistics in U.S.– 10.1% of U.S. GDP
• Transportation 40 - 60%• Inventory 30 - 50%• Administration 0 - 5%
Importance: $$$
