Table of Contents
Instructor Guide
© 2012 APICS Confidential and Proprietary
Principles of Distribution and Logistics
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© 2012 APICS
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Instructor Guide Version 1.0
Table of Contents
Page
Brief Table of Contents
Session 1 Operations Management Foundations
Session 2 Introduction to Distribution and Logistics
Session 3 Channel Network Design
Session 4 Inventory Management
Session 5 Distribution Requirements Planning (DRP)
Session 6 Mid–Term Examination
Session 7 Warehouse Management
Session 8 Packaging and Materials Handling
Session 9 Transportation Management
Session 10 Transportation Operations
Session 11 Final Exam
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Principles of Distribution and Logistics
Table of Contents
Session 1: Operations Management Foundations
Principles of Operations Management Overview...............................................
1-3
Principles of Manufacturing Management Overview..........................................
1-5
Operations Management Foundations Overview………….................................
1-7
Session Learning Objectives………………………..……….................................
1-9
Why Study Operations Management?………………………..………..................
1-11
Why is Operations Management So Important?.................................................
1-13
Operations Management Definition...................................................................
1-21
What Do Operations Managers Do?...................................................................
1-25
Operations Management and the Organization..................................................
1-27
Operations Management and the Supply Chain………......................................
1-29
Operations Management and Competitive Advantage......................................
1-35
Trends in Operations Management...................................................................
1-39
Career Opportunities..........................................................................................
1-41
Distribution and Logistics Concepts Self-Assessment.......................................
1-45
Distribution and Logistics Terms Check.............................................................
1-47
Bill of Distribution Exercise……………………………...…...................................
1-49
Distribution and Logistics Organizational Structure Exercise.............................
1-51
Review, Terms, Discussion Questions, Exercises………...................................
1-53
Terms Check…………........................................................................................
1-55
Performance Check – Answers and Test Documents.…...................................
1-58
Discussion Questions………….…......................................................................
1-61
Suggested Additional Readings…......................................................................
1-65
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Session 2: Introduction to Distribution and Logistics
Introduction to Distribution and Logistics Overview……….……….....................
2-3
Session Learning Objectives..............................................................................
2-5
Defining Distribution Management…..................................................................
2-7
What is the Supply and Distribution Channel?……..……...................................
2-9
The Need for Distribution Channels...………......................................................
2-11
Reducing Channel Transaction Complexity.......................................................
2-13
Channel Intermediaries……………………..........................................................
2-17
Role of the Distribution Function…….................................................................
2-21
Defining Logistics Management.........................................................................
2-27
Logistics Management Functions.......................................................................
2-29
Logistics Operations……....................................................................................
2-31
Reverse Logistics and Motivating Factors..........................................................
2-33
Reverse Logistics Hierarchy and Benefits..........................................................
2-35
Logistics Strategy……………………..….............................................................
2-37
Guidelines for Logistics Strategy……….............................................................
2-39
Logistics and Supply Chain Management..........................................................
2-41
Review, Terms, Discussion Questions, Exercises………...................................
2-43
Terms Check…………........................................................................................
2-45
Performance Check – Answers and Test Documents.…...................................
2-49
Discussion Questions………….…......................................................................
2-53
Case Study……………………...…......................................................................
2-57
Suggested Additional Readings…......................................................................
2-61
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Principles of Distribution and Logistics
Session 3: Channel Network Design
Channel Network Design Overview……........................................................
3-3
Session Learning Objectives..............................................................................
3-5
Channel Network Design Fundamentals............................................................
3-7
Reasons for Supply and Distribution Channels..................................................
3-9
Critical Design Considerations………..…………………………………………….
3-13
Channel Design Factors…………………............................................................
3-15
Level of Channel Dependency…….……...........................................................
3-17
Channel Design – Manufacturing Method……..................................................
3-19
Channel Configuration Attribute Matrix.……......................................................
3-21
Producer Storage with Direct Delivery...............................................................
3-27
Producer Storage with Drop Ship……...............................................................
3-29
Producer with Extended Channel Network.........................................................
3-31
Aggregator with Extended Channel Network......................................................
3-33
Aggregator with e-Business Network.…………..……….....................................
3-35
Framework for Channel Network Design…………………..…………...………….
3-39
Micro Decisions Influencing Channel Design.....................................................
3-41
Factor-Rating Method………………………………………...................................
3-43
Center of Gravity Method………........................................................................
3-45
Channel Demand and Capacity………………………...…...................................
3-47
Review, Terms, Discussion Questions, Exercises………...................................
3-49
Terms Check…………........................................................................................
3-51
Performance Check – Answers and Test Documents.…...................................
3-56
Discussion Questions………….…......................................................................
3-59
Case Study……………………...…......................................................................
3-63
Suggested Additional Readings…......................................................................
3-67
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Session 4: Inventory Management
Inventory Management Overview……...............................................................
4-3
Session Learning Objectives..............................................................................
4-5
Inventory Definitions………….............................................................................
4-7
Functions of inventory……..…………..…………….............................................
4-9
Strategic Inventory Management Process …..……...….....................................
4-11
Characteristics of inventory in the Distribution Channel.....................................
4-13
Channel Inventory and Demand Flows………....................................................
4-15
Inventory Replenishment Components……..………….......................................
4-17
Ordering Techniques – When to Order……………............................................
4-19
Order Point – Basic Model and Order Point Trigger...........................................
4-21
Order Point – Potential of Demand Variation and Safety Stock.........................
4-23
Calculating the Safety Stock…………….............................................................
4-25
Determining the Order Quantity..........................................................................
4-31
Order and Inventory Carrying Cost Components.……………….........................
4-33
Determining the Optimal Order Quantity….………….…….…..………………….
4-35
EOQ Calculation…………………….………………………………………………..
4-37
Maximum and Minimum Ordering.....................................................................
4-39
Replenishment Planning Process......................................................................
4-41
Review, Terms, Discussion Questions, Exercises………...................................
4-43
Terms Check…………........................................................................................
4-45
Performance Check – Answers and Test Documents.…...................................
4-49
Discussion Questions………….…......................................................................
4-53
Case Study……………………...…......................................................................
4-57
Suggested Additional Readings…......................................................................
4-65
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Principles of Distribution and Logistics
Session 5: Distribution Requirements Planning (DRP)
Distribution Requirements Planning (DRP) Overview…………………………….
5-3
Session Learning Objectives….…………...........................................................
5-5
Distribution Channel Dependencies…………....................................................
5-7
“Push” System Functions……………………………............................................
5-9
“Push” System Allocation – Example……..........................................................
5-11
“Pull” System Functions…....………...................................................................
5-13
What to Choose: Order Points or DRP?…………..............................................
5-15
Defining Distribution Requirements Planning (DRP)..........................................
5-17
Time Phasing – The Heart of DRP…..………….................................................
5-19
Introduction to the DRP Grid………………………..............................................
5-21
PAB and the DRP Grid……...……………..........................................................
5-23
Net Requirements and the DRP Grid……..........................................................
5-25
DRP Planned Order Generation……..……........................................................
5-27
PAB and Net Requirements Recalculation……….………..................................
5-29
DRP Grid Exercise……….....………………….…………………………………….
5-31
DRP and the Bill of Distribution………………………………………….………….
5-33
DRP Planning Process…………………………….…………………………………
5-35
DRP Example……………………………………….………...................................
5-37
Review, Terms, Discussion Questions, Exercises………...................................
5-39
Terms Check…………........................................................................................
5-41
Performance Check – Answers and Test Documents.…...................................
5-45
Discussion Questions………….…......................................................................
5-49
Case Study……………………...…......................................................................
5-53
Suggested Additional Readings…......................................................................
5-57
Session 6: Mid-Term Exam
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Session 7: Warehouse Management
Warehouse Management Overview....………………………...............................
7-3
Session Learning Objectives….…………...........................................................
7-5
Defining Warehouse Management………………………………………………….
7-7
Warehouse Functions – Materials Handling……………………………………….
7-9
Product Storage…………………………..............................................................
7-11
Order Management…………………………….....................................................
7-13
Information Transfer…………………..................................................................
7-15
Types of Warehousing……………..…..…….......................................................
7-17
Basic Operations of Warehousing……………...................................................
7-25
Strategic Decision Components..…………………………………………………..
7-27
Use of Third-Party Logistics (3PL)……..….......................................................
7-29
Warehouse Management Process.....................................................................
7-31
Importance of Warehouse Standards.................................................................
7-33
Receiving Flow………………………...……………………………………….……..
7-37
Warehouse Stocking Functions……………………….........................................
7-39
Three P’s of inventory Control...……………………............................................
7-37
Transaction Management……………………………..…………………………….
7-43
Order Picking Options……….……………………...……………………………….
7-45
Order Shipment Flow…………………………….………………………………….
7-47
Warehouse Performance………………………………….....................................
7-49
Review, Terms, Discussion Questions, Exercises………...................................
7-51
Terms Check…………........................................................................................
7-53
Performance Check – Answers and Test Documents.…...................................
7-58
Discussion Questions………….…......................................................................
7-61
Case Study……………………...…......................................................................
7-65
Suggested Additional Readings…......................................................................
7-69
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Principles of Distribution and Logistics
Session 8: Packaging and Materials Handling
Packaging and Materials Handling Overview…….………………….…………….
8-3
Session Learning Objectives..............................................................................
8-5
Warehouse Design and Layout Objectives..…………........................................
8-7
Warehouse Size and Capacity…….….……………............................................
8-9
Basic Warehouse Layouts……....…………...…..................................................
8-11
Warehouse Layout Development……………...………….………………...……...
8-13
Warehouse Design and Layout Principles……...…...….…................................
8-15
Principles of Materials Handling………....…..……..............................................
8-17
Types of Storage Systems...…………..…...……….............................................
8-19
Large-Item or Large-Volume Storage…………..................................................
8-21
Small-Item or Low-Volume Product Storage…...................................................
8-25
Automated Storage Systems…………..……………………………………………
8-27
Stocking Inventory in Warehouse Locations.……………………………………...
8-33
Dock Equipment………………....…………………………………………………...
8-37
Mobile Materials Handling Equipment………………………..…………………….
8-41
Role of Packaging…………….………………….…………………………………..
8-47
Unitization..…………………….……………………..............................................
8-49
Unitization Principles and Examples……………………………………………….
8-51
Warehouse Automation – Key Drivers...............................................................
8-53
Warehouse Automation Components…...……...................................................
8-55
Warehouse Management System (WMS)…………………….…………….……..
8-57
Review, Terms, Discussion Questions, Exercises………...................................
8-59
Terms Check…………........................................................................................
8-61
Performance Check – Answers and Test Documents.…...................................
8-66
Discussion Questions………….…......................................................................
8-69
Case Study……………………...…......................................................................
8-73
Suggested Additional Readings…......................................................................
8-77
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Session 9: Transportation Management
Transportation Management Overview....………..…………...............................
9-3
Session Learning Objectives….…………...........................................................
9-5
Defining Transportation Management………………..…………………………….
9-7
Fundamental Principles of Transportation………………...……………………….
9-9
Principles of Transportation Operations.............................................................
9-11
Transportation Participants……………………....................................................
9-17
Transportation Services – Load Transport.........................................................
9-19
Transportation Services – Product Storage……………..…..…….......................
9-21
Relationship of Transportation to Other Business Functions……………...........
9-23
Modes of Transportation..……………………………………………………………
9-27
Types of Transportation Carriers……..…..........................................................
9-41
Third-Party Logistics (3PL) – Functions and Transportation.............................
9-45
Logistics Outsourcing Models………..................................................................
9-47
Transportation Challenges………………………...………………………………...
9-49
Review, Terms, Discussion Questions, Exercises………...................................
9-51
Terms Check…………........................................................................................
9-53
Performance Check – Answers and Test Documents.…...................................
9-58
Discussion Questions………….…......................................................................
9-61
Case Study……………………...…......................................................................
9-65
Suggested Additional Readings…......................................................................
9-69
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Principles of Distribution and Logistics
Session 10: Lean Production Management
Transportation Operations Overview ……………………………………............... 10-3
Session Learning Objectives…………................................................................ 10-5
Transportation Operations Principles………………………….…………………...
10-7
Role of Transportation Administration…………………………............................
10-9
Types of Transportation Risk……..…………..…………………………………….. 10-11
Transportation Management Process……………………………….…………….. 10-13
Transportation Cost…..…………………………………………………..………….. 10-15
Detailed Transportation Cost Components…………..…………………………… 10-19
Transportation Rates and Pricing…………..……………………………………… 10-23
Terms of Sale………………………………….……………………………………... 10-25
Transportation Mode Selection……................................................................... 10-27
Transportation Carrier Selection…………….……………………………………… 10-31
Transportation Routing and Scheduling…......................................................... 10-33
Documentation and Post-Shipment Processing…….......................................... 10-39
Transportation Performance Measurement….................................................... 10-41
Transportation Performance Scorecard….......................................................... 10-43
Transportation Management System………………..…………………………….. 10-45
Review, Terms, Discussion Questions, Exercises………................................... 10-47
Terms Check…………........................................................................................ 10-49
Performance Check – Answers and Test Documents.…................................... 10-54
Discussion Questions………….…...................................................................... 10-57
Case Study……………………...…...................................................................... 10-61
Suggested Additional Readings…...................................................................... 10-65
Session 11: Final Exam
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Instructor Guide Version 1.0