GLOM 521 LOGISTICS MANAGEMENT
HISTORY AND BACKGROUND
Lecture 1: 18 July 2023
INTRODUCTION
1. Old discipline with much career opportunities
2. Service and Product orientation
3. System and Product support supply management
4. Operational and engineering support management
requirements
5. Improved availability with quality and reduction of cost
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TEXT BOOKS
1.
2.
3.
4.
5.
6.
Blanchard, B.S., 2014. “Logistics engineering and management”, 6th Ed edition,
Pearson new international edition. ; Pearson. ISBN: 978-1-292-02713-5 (1-292-027134)
Langley, C.J., Novack, R.A., Gibson, B.J. and Coyle, J.J., 2021 (2017), “Supply Chain
Management: A Logistics Perspective”, 11th Edition, Cengage Learning, ISBN 978-0-35744213-5
Arnold J.R.N., Chapman S.N., Clive L.M., 2012. “Introduction to Materials Management”,
7th Edition, Pearson, Prentice Hall.
Voortman, C., 2013. “ Global Logistics Management”, JUTA and Co Ltd, Landsdowne,
Cape Town.
Lambert, D.M. and Stock, R.J. 2001. “Strategic Logistics Management”, Boston
Irwin/McGraw-Hill.
Lambert, D.M., Stock, R.J. and Ellram, L.M. 1998. “Fundamentals of logistics
management”, Boston Irwin/McGraw-Hill.
2
READING
1.
2.
3.
4.
https://cscmp.org/CSCMP/Educate/SCM_Definitions_and_Glo
ssary_of_Terms.aspx accessed 23 May 2021
https://www.michiganstateuniversityonline.com/resources/sup
ply-chain/is-logistics-the-same-as-supply-chain-management/
accessed 23 May 2021
https://www.inboundlogistics.com/cms/article/good-question/
accessed 23 May 2021
https://doi.org/10.1080/16484142.2005.9638005/ Comparative
analysis of the definitions of logistics centres, Meidute, I.
accessed 22 May 2021
3
LOGISTICS MANAGEMENT
1. Purpose: To undertake advanced reflection and
development in respect of quality and performance
management in the organisational logistics management
as is mandated in the SCM with the aim of improving the
performance of the organisational value chain.
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OUTCOMES OF MODULE
1.
Stated are some of the outcomes expected from this module:
– To demonstrate advance knowledge of key Integrated Logistics Support
Management principles for the purpose of optimising the ILS
performance by applying tacit and explicit knowledge.
– To analyse and critically reflect on current cross-functional processes to
continuously improve the internal value chain of the organisation.
– To propose a change of Integrated Logistics Support Management
strategies within a changing environmental context through new or
improved processes with the aid of analysis and evaluation of
qualitatively and quantitatively performance metrics for resources for
decision-making purposes
– Develop analytical and decision-making skills for dealing with complex
conceptual problems in an ethical manner by identifying the deltas in
the supply chain and support functions.
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EXPECTATIONS
1. Academic expectations
– Participation and completing assignments
– Pass the module with practical understanding
2. Practical expectations
– Implementation of correct logistics management
systems
– Informed integrated logistics systems
management
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HISTORY
1.
2.
3.
4.
The term logistics is from French: “logistique”, a military officer Jomini,
in his Summary of the Art of War. It is derived from either Greek
(“logistikos” from the Greek mathematics), or French (“logis”, implying
'lodgings’).
Oxford Dictionary on-line defines it as "the detailed organization and
implementation of a complex operation".
As such, logistics is commonly seen as a branch of engineering that
creates "people systems" rather than "machine systems“.
Evolvement is found in the inventory control and management, then
material management, then logistics and now supply chain and value
chains.
– THUS Value chain and supply chain originates from this basic premise
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BACKGROUND
1. Logistics need to be considered form a SYSTEMS
approach and include all elements of the system.
2. Included are: equipment, related facilities, material,
software, data, services and personnel requirement as
required for operations and engineering support.
3. Within the scope of the SCM, logistics maintains two
aspects – INBOUND and OUTBOUND logistics.
4. There is a need to understand the SCM/VALUE chain
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Origins of Supply Chain Management
(towards Industry 4.0)
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Origins of Supply Chain Management
1950s-1960s
U.S. manufacturers focused on mass production
techniques as their principal cost reduction and
productivity improvement strategies
1960s-1970s
Introduction of new computer technologies lead to
development of Materials Requirements
Planning (MRP) and Manufacturing Resource
Planning (MRPII) to coordinate inventory
management and improve internal communication
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Origins of Supply Chain Management
(continued)
1980s-1990s
Intense global competition led U.S. manufacturers
to adopt:
Supply Chain Management (SCM)
Just-In-Time (JIT)
Total Quality Management (TQM)
Business Process Reengineering (BPR)
Customer Relationship Management (CRM)
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Origins of Supply Chain Management
(continued)
2000s and Beyond (Towards Industry 4.0)
Evolution along 2 parallel paths
1.Supply management emphasis from industrial buyer
2.Logistics and customer service emphasis from wholesalers
and retailers
Focus on improving supply chain capabilities with initiatives
such as:
Third-party service providers (3PLs)
Integrating logistics
Client/server SCM software - Enterprise Resource
Planning
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Origins of Supply Chain Management
Today (In the Industry 4.0 Economy)
Away from Globalisation; Emphasis is being
placed on the environmental and social
impacts of supply chains. Virtual Partner
Networks.
Sustainability - ability to meet the needs of
current supply chain members without
hindering the ability to meet the needs of
future generations
Triple bottom line – taking care of people,
planet and profits
Evolution of Supply Chain
Management
1.Today (In the Industry 4.0 Economy)
– Away from Globalisation; Emphasis is being
placed on the environmental and social impacts
of supply chains. Virtual Partner Networks.
– Sustainability - ability to meet the needs of
current supply chain members without hindering
the ability to meet the needs of future
generations
– Triple bottom line – taking care of people, planet
and profits
14
Evolution of Supply Chain
Management
1.Towards and beyond Industry 5.0
– Evolution along 2 parallel paths
– Supply management emphasis from industrial buyer
– Logistics and customer service emphasis from wholesalers and
retailers
2. Focus on improving supply chain capabilities with initiatives
such as:
– Third-party service providers (3PLs)
– Integrating logistics
– Client/server SCM software - Enterprise Resource Planning
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ISSUE: The SCM Evolution
1. The evolution did develop
Integration thinking
2. The evolution lost track of the
components of Logistics
3. ILS M endeavours to re-instate
elements within SCM
4. Optimise the SCM and
Application within organisations
AND IMPORTANTLY
5. Integrate the Engineering
Component to facilitate
Maintenance and usability.
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Continuous Improvement
1.Productivity = Effectiveness +
Efficiency
• Productivity as a function of Input and
Output
• Process driven
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4-P of Continuous
Improvement
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ELEMENTS OF LOGISTICS
1. Various opinions on the quantum of type of elements.
However, Blanchard (17 elements) and Stocks and Lambert (8
elements) the most notable.
2. Consensus on the fact that Logistics do stand in support of the
SCM AND other value chains thus not limited to the SCM only.
3. Thus stated: Logistics is an integration mechanism for all
value-adding activities (i.e. utilises “raw” material to produce
a product/system for the end-user.)
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BASIS OF LOGISTICS
Logistics is an old concept based on the premise of the 7 “R”’s
1.
•
2.
RIGHT item, in the RIGHT place, in the RIGHT quantity, in the RIGHT condition, to
the RIGHT user, at the RIGHT time, (and at the RIGHT cost).¹
The Council of Supply Chain Management Professionals (previously
the Council of Logistics Management), define logistics as: The
process of planning, implementing and controlling procedures for the
efficient and effective transportation and storage of goods including
services and related information from the point of origin to the point of
consumption for the purpose of conforming to customer requirements
and includes inbound, outbound, internal and external movements. ²
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Foundations of Supply Chain Management
Supply
Supply base reduction, supplier alliances, SRM, global
sourcing, ethical and sustainable sourcing
Operations
Demand management, CPFR, inventory management,
MRP, ERP, lean systems, Six Sigma quality systems
Logistics
Logistics management, customer relationship
management, network design, RFID, global supply chains,
sustainability, service response logistics
Integration
Barriers to integration, risk and security management,
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performance measurement, green supply chains
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The Foundations of Supply Chain
Management
(continued)
Supply Elements:
Supplier management - improve performance through
 Supplier evaluation (determining supplier capabilities)
 Supplier certification (third party or internal certification to assure product quality and
service requirements)
Strategic partnerships - successful and trusting
relationships with top-performing suppliers
Ethics and sustainability – recognising suppliers’
impact on reputation and carbon footprint
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Continuous Improvement as Strategy
Improve 6 customer requirements
(competitiveness)
Improve effectiveness
Improve efficiency
Productivity = Effectiveness + Efficiency
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Strategic Results: The 4-P Cycle of
Continuous Improvement
People
(Skilled, motivated
people who can handle
change. Less stress.)
Productivity
(Less wasteful, more
efficient use of all
resources.)
Products
(Satisfied customers
because of better
quality goods/services.)
Processes
(Faster, more flexible,
leaner, and ethical organisational
processes. Organisational learning.)
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Process Improvement Benefits
Streamlining processes to eliminate
wasteful activities or steps cuts fixed
and variable costs.
To sum up...
Those same streamlining efforts yield
better output quality, more timely
delivery, and other customer wants…
revenues increase as demand
increases.
Profit potential appears at lower
volumes, thus opening new market
opportunities.
ISSUE: The SCM Evolution
1. The evolution did develop
Integration thinking
2. The evolution lost track of the
components of Logistics
3. ILS M endeavours to re-instate
elements within SCM
4. Optimise the SCM and
Application within organisations
AND IMPORTANTLY
5. Integrate the Engineering
Component to facilitate
Maintenance and usability.
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27
Plan-Do-Check-Act Cycle
4. Make the change
permanent, or try
another time; begin
with STEP 1 for a
new cycle.
4
Act
1
Plan
3
2
Check
Do
3. Evaluate the
results of the change
to the process. Did the
anticipated improvement
occur?
1. What change is needed in
order to gain continuous
improvement? Are data
available, or must a test
be conducted?
2. Analyse appropriate
data if available or
conduct test. Carry out
suggested change to the
process.
Processes
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Behavioural
Strategy
Inputs
Structural
Strategy
Operational
Strategy
Outputs
People
Capital
Energy
Materials
Technology
Market and
Environmental
Forces
Goods
Transformation
Processes
Services
LOGISTICS IN SCM
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SCM INBOUND LOGISTICS (1/2)
1. Inbound Logistics - transportation, storage and receiving of
goods into a business (goods procurement for production).
2. Elements:
 Purchasing materials (sourcing or buying of raw materials/products)
 Receiving
 Reverse logistics
 Order processing
 Product picking and packing
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SCM INBOUND LOGISTICS (2/2)
1. Inbound Logistics – do address the components link to stock
management.
2. Functions:
 Requirements management
 Order management (pre-order, order and post-order administration)
 Stock receipts and management
 Stock maintenance
 Stock issuance and management
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SCM OPERATIONS LOGISTICS (1/2)
1. Operational Logistics – the issuance of stock to production for
the manufacturing of products/systems.
2. Elements:
 MRP’s
 Bill of Materials
 Stock Issues
 Re-order initiation
 Quality assurance
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SCM OPERATIONS LOGISTICS (2/2)
1. Operational Logistics – the application of the output from the
inbound logistics
2. The application of logistics principles to the value adding
process and finished products.
3. Functions:
 Bill of Materials (JIT)
 Stock Issues (correctness & quality)
 Quality assurance built in and not on
 Warehousing and maintenance of finished goods
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SCM OUTBOUND LOGISTICS (1/2)
1. Outbound Logistics – receiving, storage, distribution &
transportation of goods from production to client/users.
2. Elements:
 Client order processing (warehouse management system)
 Product picking and packing (WMS)
 Distribution planning
 Shipping/Transportation
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SCM OUTBOUND LOGISTICS (2/2)
1. Outbound Logistics – do address the components link to stock
management for finished products.
2. Function:
 Client orders
 ERP
 Process Flow between finished goods, warehousing, distribution and
warehousing.
 Optimised distribution networks.
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SCM FUNCTION vs LOGISTICS
MANAGEMENT
1. From current point of view, PROCUREMENT is a single support
function.
2. Also Support functions are:
– ICT/IT/IS (4th IR) – (Organisational)
– Human Resources (organisational)
– Infrastructure (organisational)
3. Marketing and Sales as well as SERVICE is separated.
4. Definition of service?
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ELEMENTS OF LOGISTICS
1. Various opinions on the quantum of type of elements.
However, Blanchard and Stocks and Lambert the most
notable.
2. Consensus on the fact that Logistics do stand in support of the
SCM AND other value chains thus not limited to the SCM only.
3. Thus stated: Logistics is an integration mechanism for all
value-adding activities (i.e. utilises “raw” material to produce
a product/system for the end-user.)
37
ILS Management
Source: Meyer, 2019, adapted from Blanchard, 2014
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BIBLIOGRAPHY
1. https://www.futurelearn.com/info/courses/principl
es-global-management-logisticsassets/0/steps/65241 accessed 28 June 2021
2. https://en.wikipedia.org/wiki/Logistics accessed 28
June 2021
3. https://www.saloodo.com/logisticsdictionary/inbound-logistics/
4. https://www.shipbob.com/blog/inbound-andoutbound-logistics/
5. https://www.google.com/search?q=inbound+logistic
+components&oq=inbound+logistic+components&aqs
=chrome..69i57j0i10l2j0i10i395j0i10j69i60l3.6976j1j
7&sourceid=chrome&ie=UTF-8