Pressures for change
1.a significant improvement in
communications systems and
information technology
2.regulatory changes and developments
3.increasing customer service requirements
4.a shortening of product life cycles
5.the need for improved financial
performance at a time when companies
and economies are under severe pressure
6.the development of new players with new
roles in channel distribution
7.the never-ending pressures to reduce
inventories and their associated costs
8.the need to adopt a wider supply chain
perspective when planning and
redesigning logistics operations.
Strategic planning overview
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external environment
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internal factors
There are different parts of the supply
chain that can be influential and can
necessitate the development of a very
different type of business environment :
1.brewing the beer: this is the traditional
role concerned with production and
packaging.
2.environments in which to drink beer:
traditionally these have been pubs, clubs
and bars.
3.environments in which to eat food and
drink beer: these are often known as
leisure or lifestyle experiences.
4.drinking beer at home: another important
development is the increase in the home
consumption of beer and the fact that this
is primarily bought from supermarkets,
specialist shops, wholesalers or corner
shops.
Important issues:
1.the need to link the logistics or
distribution plan directly with the
corporate plan.
2.the extent or coverage of the logistics
strategic plan.
3.issue is whether or not a company has a
structured logistics plan at all.
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logistics process design- is concerned
with ensuring that business methods are
aligned and organized so that they
operate across the traditional company
functions and become supply chainoriented.
logistics network design- refers to the
more traditional elements of logistics
strategy.
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logistics information system designshould include all of those informationrelated factors that are vital to support
the processes and the physical structure
of the operation.
logistics organizational structure- It is
the experience of many companies that
an inadequate organizational structure
can lead to substantial problems.
Four main categories :
1.volume to weight ratio
volume and weight characteristics are
commonly associated, and their influence on
logistics costs can be significant.
2.value to weight ratio
product value is also important to the planning
of a logistics strategy
3.substitutability
the degree to which a product can be substituted
by another will also affect the choice of
distribution system.
4.high-risk products
the characteristics of some products
present a degree of risk associated with
their distribution (perish ability, fragile,
hazard/danger, contamination potential,
and extreme value)
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hazardous goods
fragile products
perishable goods
time-constrained products
very high-value products
time-constrained products
very high value products
1.introductory stage: need for a high response to
demand with a logistics structure that gives stock
availability and quick replenishment, and can react
to sudden demand increases.
2.growth stage: the requirements for distribution are
now for a better- balanced, more cost-effective
system. The trade-off between service and cost can
be realized.
3.maturity stage: where the introduction of
competitive products and substitutes will increase
price and service competition.
4.decline stage: the logistics system needs to support
the existing business but at minimum risk and
cost.
Packaging
the packaging of a product is broadly
determined for product promotion and
product protection, the latter being the function
that is particularly pertinent to logistics.
Unit loads
the idea of unit load for logistics was
developed from the realization of the high costs
involved in the storage and movement of
products – particularly in the inefficient
manual handling of many small packages.
The importance of logistics processes :
 incorrect transcription of the original
order requirements
 incorrect notification of availability
 incorrect selection or picking of the order
 damage the goods
 late delivery
 delivery to an incorrect address
 invoicing to the incorrect address.
Three Essential Elements
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customer facing
cross functional
time based
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Order Fulfillment-is concerned order with the
ability to turn a customer's specified
requirements into an actual delivered order.
New Product Introduction – an area where
many companies find they have problems. One
of the main problems is the inability to respond
sufficiently quickly.
New Product Development – the idea is to
design the product so that it can reach the
market as quickly as possible from the initial
design plan through to availability.
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Product Returns – this may be for returns that
come back through the existing distribution
network or through a new one that is
specifically set up.
Aftermarket or service part logistics – for many
companies the supply of a product or series of
products is inextricably linked to the
subsequent provision of service parts to
support the continuous use of the initial
product.
Information Management – advancement in
information technology have enabled a vast
amount of detailed data and information to be
available and manipulated very easily.
Associated processes that could also be
relevant
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supplier integration
quality
strategic management
maintenance
human resource management
environmental management
Three different process categories
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Basic Processes
Benchmark Processes
Competitive Processes
Main methods of differentiating between
the various factors that are fundamental
to most logistics operations
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Market segmentation
Customer types
Product Groups
Customer Service Requirements
Order Type
Channel Type
Tools and Techniques
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Pareto Analysis
Market or Customer Segmentation
Customer Service Studies
Relationship Mapping
Process charts
Value/time Analysis
Time-based Mapping