Supply Chain Logistics Management

Supply Chain Logistics Management

Zubin PoonawallaPresidentSupply Chain Central Advisory Services


• Importance of Logistics to Business

• Logistics Value Proposition

• The Work of Logistics

• Logistics Operations

• Logistics Operating Structures

• Supply Chain Logistics Performance


• Scope of Logistics

• Logistics Operations

Importance of Logistics to Business

• Manufacturing → Consumers

• Logistics Expenditures

• Logistics as a Sustainable Competitive Advantage (SCA)


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

Importance of Logistics to Business

• Manufacturing → Consumers

• Logistics Expenditures

• Logistics as a Sustainable Competitive Advantage (SCA)


Logistics Value Proposition

• Service

• Cost Minimization



• Service– Logistics Service Quality Process Dimensions– Logistics Service Quality Outcome Dimensions




• Service– Logistics Service Quality Process Dimensions

• Procedures

• Contact

• Information

• Discrepancy

– Logistics Service Quality Outcome Dimensions




• Service– Logistics Service Quality Process Dimensions– Logistics Service Quality Outcome Dimensions

• Timeliness

• Availability

• Condition

• Accuracy




• Service Benefits



The Work of Logistics

• Order Processing

• Inventory

• Transportation

• Warehousing, Materials Handling, Packaging

• Facility Network Design


Integrated Logistics

OrderProcessing

Inventory

Transportation

FacilityNetwork

Warehousing, Material Handling


• Order Processing– order receipt, order assembly, order delivery,

invoicing & collection

• Inventory

• Transportation

• Warehousing, Materials Handling





• Inventory

• Transportation






• Inventory

• Transportation

• Warehousing, Materials Handling– sorting, sequencing, product modification &

assembly, and transportation consolidation





• Inventory

• Transportation




Logistics Operations

Customers

Enterprise

CustomerService

ManufacturingSupport

Procurement(Purchasing)

Suppliers

Information Flow

Inventory Flow


• Inventory Flow– Customer Service– Manufacturing Support– Purchasing (procurement) Support

• Information Flow



• Inventory Flow

• Information Flow


Logistics Operating Structures

• Echelon

• Direct

• Combined


Echeloned Structured Logistics

Supplier

Storage orConsolidation

Warehouse Manufacturer

Wholesaler’s Warehouse

orDistribution

Center

Retailer Customer

Logistics Operating Structures

• Echelon

• Direct

• Combined


Combined Echelon and Direct Structured Logistics

SupplierStorage or

ConsolidationWarehouse

Manufacturer

Wholesaler Warehouse

orDistribution

Center

Retailer Customer

Direct Delivery

Supply Chain Logistics Performance

• Performance Cycle Structure


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

Supply Chain Logistics Management

Business

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