LOGISTICS Versus SUPPLY CHAIN-Version Anglaise
Transcript of 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