Logistics
Tran Van Hoai
Faculty of Computer Science & Engineering
HCMC University of Technology
2010-2011
Tran Van Hoai
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Outline
• What is logistics ?
– As a part of supply-chain
• Systems and total cost approaches
• Logistical relationships with a firm
• Activities in the logistical channel
2010-2011
Tran Van Hoai
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Economic impacts
Year
Inventory
carrying
costs
Transporta Administrativ
tion costs
e costs
Total US
logistics
costs
Logistics as a
percentage of
GDP
1980
220
214
17
451
1985
227
274
20
521
16.1
12.4
11.4
12th Annual State of Logistics Report, 2001
mainly contributes to explosive growth
1960
- (60% GDP
31
increase)
44
of Ireland’s
3
78
economy
14.7in
1965
38
mid-64 and late-4 1990s106
14.7
56
91
6
153
-1970
15-20% GDP
of Vietnam
(~12billions
USD14.7
2010,
1975
97
116
9
222
13.5
source:
Vietstock.vn)
351
25
659
Strong 283
macro-level
economic
impacts
1990
1995
302
441
30
773
10.4
2000
377
590
39
1006
10.1
2010-2011
Tran Van Hoai
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Impacts to individual customer
Economic utility
Possession
utility
Form
utility
Place
utility
Time
utility
• A student uses online service to order Valentine’s
Day flowers for his out-of-country girlfriend
– Possession utility: service provides secured payment
by credit card
– Form utility: service provides correct bouquet
– Place utility: bouquet arrives at girlfriend’s residence
– Time utility: on Valentine’s Day
2010-2011
Tran Van Hoai
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What is logistics ?
• It has been referred by
many terms
• Different organizations
may have different
definition of logistics
– Business logistics
st organization:
•
1
–
Distribution
Logistics is a part of supply chain process that plans,
transportation &
– Industrial
distribution
implements,
and
controls the efficient,
effective
forward
inventory
management
Logisticsflow and storage of goods,
and –reverse
services, and
• 2nd organization:
– Logistics
management
related
information
between point transportation,
of origin and point of
– Materials management
inventory
management
consumption
in order to meet customers’
requirements
– Supply chain
& warehousing
(Council
of Logistics Management)
management
–…
2010-2011
Tran Van Hoai
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Supply chain configurations (1)
Supplier
Organization
Customer
Direct Supply Chain
2010-2011
Tran Van Hoai
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Supply chain configurations (2)
Supplier’s
supplier
Supplier’s
supplier
Customer’s
customer
Organization
Customer
Extended Supply Chain
2010-2011
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Supply chain configurations (3)
Ultimate
customer
Ultimate
supplier
Market
research firm
Financial
provider
Supplier’s
supplier
Organization
Ultimate Supply Chain
2010-2011
Customer
3rd party
logistics supplier
Tran Van Hoai
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Supply chain management
A supply chain management is as systemic, strategic
coordination of traditional business functions and tactics
across these business functions within a particular and
across businesses in the supply chain, for the purposes of
improving long-term performance of individual companies
and supply chain as a whole
(Mentzer et al, 2001)
2010-2011
Tran Van Hoai
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Supply-Chain Operations Reference
(SCOR)
SCOR
process
Definition
Plan
Balancing demand & supply to develop actions which
best meets requirements
Procuring goods & services to meet planned or actual
demand
Transforming product to finished state to meet
planned or actual demand
Providing finished goods & services to meet planned
or actual demand
Returning & receiving returned products for any
reason
Source
Make
Deliver
Return
2010-2011
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Increased importance of logistics
• A reduction in economic regulation
– Tailored logistics approach to meet different
specific service levels
• Technological advances
– Computer
– Internet
• Growing power of retailers
• Globalization of trade
– $200billions in 1970 -> $7.7trililions in 2000
2010-2011
Tran Van Hoai
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Logistical relationships within firm
FINANCE
MARKETING
PRODUCTION
Systems approachLOGISTICS
and total cost approach
should be applied to logistics
2010-2011
Tran Van Hoai
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Activities in logistical channel
• Customer service
• Facility location
decisions
• Inventory management
• Order management
• Production scheduling
• Returned products
• Transportation
management
2010-2011
•
•
•
•
Demand forecasting
Industrial packaging
Materials handling
Parts and service
support
• Procurement
• Salvage and scrap
disposal
• Warehousing
management
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