Logistics
Management
Group 3: Aaron Michelson, Nabil Akanli, Tarek Alsulami,
Pegah Fakhar, Taoran Li, James Nakamura
Aaron Michelson
Logistics Defined
Definition:
Management's influence on the transfer of
resources between source and the person
or entity that needs the resource.
Aaron Michelson
MSE 401, Group 3Data Collection
Procurement
Production Logistics
Warehousing
Handling Systems
Emergency
Sustainability
Aaron Michelson
Procurement
• The purchase of goods or services of the correct
quality, at the appropriate quantity, at the
required time, and from the best supplier.
Pegah Fakhar
The Procurement Process
Need
Recognition
by
Management
Supplier
research and
selection of
best
alternative
Price
Negotiation
Inventory
Control
Pegah Fakhar
Management Need Recognition and
Purchase Planning
• Recognition that there is a need for a
particular product or service
• Maybe a new item or a product that needs to
be reordered.
Pegah Fakhar
Supplier Research and Selection
• A process used to evaluate the
performance of current suppliers for the
purposes of reducing costs, risk and for
continuous improvement.
• The first step is research
• Evaluate the list of potential suppliers, and
select the one that best satisfies the needs
of the company.
Pegah Fakhar
Price Negotiation
• Helps companies reduce their expenses while
increasing their purchasing power.
• Negotiate for better rates while maintaining or
increasing quality and service.
• Have clear and precise objectives
Pegah Fakhar
Inventory Control
• Uninterrupted availability of supplies
• Addresses when to order and the quantity to
order
• Based on usage, delivery time, quantity, packaging,
available storage space
• Ensures cost effectiveness
Pegah Fakhar
Inventory Control Challenges
• Not having enough product in stock to meet
customer demand
• Excessive inventory in stock and unable to move it
quickly enough
• Temporary quality problems
Pegah Fakhar
Production Logistics
• Speed(implementation time)
• Scheduling and Project Timeline
• the process capability and reliability
• Quality
• Flexibility
• Costs
Tariq Alsulami
Production Logistics
• It connects procurement to distribution logistics.
• Production logistics activities are related to organizational
concepts, layout planning, production planning, and control.
• THE VALUE OF PRODUCTION LOGISTICS:
Production logistics increase the efficiency in new and existing
production systems, enhancing the ability to produce the right
products in time, minimize waste and safeguard quality
assurance.
Tariq Alsulami
Value Chain
• A value chain is a chain of activities that a firm operating in a
specific industry performs in order to deliver something
valuable (product or service
• The value chain categorizes the generic value-adding activities
of an organization. The activities considered under this
product/service enhancement process can be broadly
categorized under two major activity sets:
1-Physical/Traditional Value Change
2-Virtual Value Chain
Tariq Alsulami
Flow control in production logistic
networks
• Controlling network flow aims in most cases at maximizing the
output, minimizing waiting or idle times at bottleneck
systems, or maintaining some kind of system stability.
Tariq Alsulami
WAREHOUSING LOGISTICS
• Warehouse Tasks
 Keep the products safe
 Easy access when need specific product
 Shipping to the store
• Warehouse Resources



Labor
Space
Equipment
Nabil Akanli
Warehouse Operations Goal is to Improve Warehouse Logistics
Nabil Akanli
Warehouse Operations
i.
ii.
iii.
iv.
v.
Order Picking
Utilizing Cross-docking
Increase Productivity
Utilizing Spaces
Increasing Services
Nabil Akanli
Functions must be done on daily bases to assure product quality and
costumer satisfaction
Nabil Akanli
• Receiving
• Inspection
• Repackaging
• Put away
• Sorting
Nabil Akanli
Location
• Near airport
• Close to seaport
• Next to the highway
Nabil Akanli
Processing and Quality Assurance
(QA)
• (Quality Assurance): This referring to the
auditing of the shipping companies before
the product is moved such that the processes
are up to their specification.
• (Processing): Products are
processed to ensure safe
arrival and safe delivery to
the customer or vendor.
James Nakamura
Shipping & Handling
• Choosing is about reducing overhead cost.
• Acquire quotes from multiple companies to
choose best option.
• Also can put up a bid and settle on a
contract for a better deal as well.
James Nakamura
(CASE STUDY) FedEx Secure
Shipping
• Government used
FedEd Custom Critical
Service to ship
“sensitive” materials
across the US instead
of the US Armed
Forces
• Service chosen over
the use of Armed
Forces due to cost
effectiveness.
James Nakamura
Packaging
• Depends on location, product, and customer.
• Must be appropriate to the application.
• (CASE STUDY) Digital Storm Computers Packaging:
Digital Storm
Customized Systems:
•Sell upper tier work
stations and gaming
computers.
•Advanced Packaging
used to protect the
thousand dollar plus
investment.
•Use FedEx or UPS
based on shipping cost.
James Nakamura
EMERGENCY LOGISTICS
Definition
• Emergency logistics is a term used by the logistics, supply
chain and manufacturing industries to denote specific time
critical modes of transport used to move goods or object
rapidly in the event of an emergency
Taoran Li
CAUSES
•
•
•
•
•
1. Disasters (natural).
2. Decision making error.
3. Consumer return
4. Internationl environment
5. Laws
Taoran Li
Characteristics of Emergency Logistics
•
•
•
•
Sudden and unpredictability
Randomness
Timing constraint
Uncoventionality
Taoran Li
Tool
• AHP (Analytical Hierarchy Process) method
• is a structured technique for organizing and analyzing complex
decisions. Based on mathematics and psychology
Taoran Li
AHP
Method
Taoran Li
Emergency Logistics Plan&Management
• Draft a logistics plan covering the supply chain and other
relevant aspects based on the operation
• Time (rapidity)- As the commodities are in most instances
urgently needed save time.
• Dynamic (flexibility)- Because circumstances change and there
frequently in an urgent need to adapt to a changed situation
• Security- To reduce hazards for staff and so as to reduce theft and
looting.
Taoran Li
Example
• 2003 SARS(Severe Acute Respiratory Syndromes)
• The hospitals control of SARS materials transportation,
storage, packaging and management cost wasted 3 billion
dollars
Taoran Li
Sustainable Logistics
Definition:
"An approach to progress which meets the needs of the present without
compromising the ability of future generations to meet their own needs"
-Bruntland Report to UN World
Commision on Environmental Development
i. Socially Responsible Supply Chains
ii. Sustainable Transport
iii. Planning Tools
Aaron Michelson
Sustainable Supply Chains
NOT only Green, But Sustainable!
Ecologic
Key To Success
1. Strategic Planning
-Explore Options
(World)
Social
(People)
2. Controlling
-Policies and Quality
Economic
(Profit)
Aaron Michelson
Setting Goals to Accomplish
Sustainable Transport
1. Establish Benchmarks
a. Collect Data, Planning, Forecasting
b. Alternative Solutions
2. Establish Policies
a. Controlling- Review
b. Motivation
3. Plan to deal with Potential Challenges
a. Planning, Forecasting
b. Challenges to Integration
Aaron Michelson
Management Organizing Systems
Set Policies and Standards
o Requires Proactive management
Case Example:
"Life Magazine Report in 1996: Child Labor in Pakistan"
CEO took Defensive Stance
Factors
o Code Of Conduct- Insufficient
o Large Corporation Size- Activists Setting Bar
•
Aaron Michelson
Sustainable Transport
At What Stage Does The Manager
Consider Sustainability?
Analyze
Collect Data
Assess Alternatives
Evaluate
Integrate
Review
http://www.solarfeeds.com/bullet-train-comingto-india/
Aaron Michelson
Case Example: Analysis
Social1. Passenger activity rise 51%
2. Freight up 82%
Ecological Impact1. CO2 emissions 31% Higher than
1990 levels
Cost1. 20 Billion Euro in Maintenance,
2. 60 Euro Billion in External
Accident costs.
3. Congestion cost: 50% rise to 200
billion Euro Annually
Aaron Michelson
Planning Tools
Objectives:
•
•
Eco-Efficiency:
o Reduce Resource Inputs
Design for Environment:
o Considers Environment and Health
impact
http://www.tbl.com.pk/wpcontent/uploads/2009/01/cover.g
if
Aaron Michelson
Eco Efficiency
Value Stream Mapping
Analysis of utilization of resource in existing or proposed process
Process
Milling
Welding
Part
Washing
Surface
Coating
Total
Water
Savings
Water
Used
10kgal
15kgal
45kgal
5kgal
75kgal
Actual
Needed
10kgal
5kgal
10kgal
5kgal
30kgal
Wasted
0
10kgal
35kgal
0
45kgal
Aaron Michelson
Design For Environment
Life Cycle Assessment
Used to Assess the Social
or Environmental effects
of a product holistically
Recycling
and End
of Life
Extracting
&
Processing
Raw
Materials
Useful
Life
Manufacturing
and Packaging
Transportation
Aaron Michelson
Conclusions- Logistics
Managerial Logistics Tasks
Procurement - Creating reliable information to Evaluate and Select Suppliers
Production- Optimization of Resources and Deliverance of Valuables
Shipping and handling- Minimizing Cost while Delivering Safe Quality Products
Warehousing- Utilization and Allocation of Space to Facilitate Flow of Products
Emergency - Managing Risk to Protect People and Profit
Sustainability - Focus on World, People, and Profit
Sources for Images and Material
Provided in Final Paper
Aaron Michelson