BA331:EXAM 1 STUDY GUIDECH.1- Only in recent past that bus. Orgs. Have come to recognize vital impacts that logistics management can have in achievement of competitive advantage. - Logistics:o The process of strategically managing the procurement, movement, and storage of materials, parts, and finished inventory (and relavent info. Flows) o Through the org. and its marketing channels.o In such a way that current/future profitability are maximized through the cost-effective fulfilment of orders. o (Logistics mgmt. is subset of SCM)- Logistics:o Essentially a planning orientation and framework o Seeks to create a single plan for the flow of products/info through a bus. - Supply chain mgmt.:o Builds upon frame work of logistics o Seeks to achieve linkage/coordination btween the processes of other entities in the pipelineo i.e. suppliers, customers, org itselfo GOAL OF SCM:  To reduce/eliminate buffers of inventory that exist btween orgs in a chain Through the sharing of info on demand and current stock levelso FOCUS OF SCM: Focus is on cooperation/trust/recognition that if properly managed “whole can be greater than the sum of its parts” Focus is upon the mgmt. of relationships in order to achieve more profitable outcome for all parties in the chain. o DEFINITION SCM: The management of upstream/downstream relationships with suppliers and customers  In order to deliver superior customer value  At less cost to the supply chain as a wholeo MORE ACCURATE DEFINITION SCM: A network of connected and interdependent orgs Mutually and cooperatively working together to control/manage/improve The flow of materials/info from suppliers to end users- Argued “Demand chain mgmt.” more accurate to reflect fact that chain should be driven by market not by suppliers.- Chain should be called “network” bc there are multiple suppliers (and suppliers to suppliers) and multiple customers (and customers’ customers) in total system. - What is a Business?o Demand Side of bus. Generate and manager customer demando Supply Side of bus.  Fulfill or supply customer demando Support Activities: General mgmt. Finance/accounting Info Tech Design/enginerring HR/org design- What does a bus do? Businesses create 3 types of utility- Form- Place- Time- Change in the business environmento 19th century new practices developed to solve their current bus problemso Ex. Scarcity/limited tech/adversarial postureo Now exists new set of problems for today Era of supply chain competition (new rules of comp.) Globalization of industry Downward pressure on price Customers taking control- A New Dimension of Competitiono Fundamental diff from the previous model of competition is that the org can no longer act as an isolated and ind entity in comp with other “stand-alone” orgs.o Instead need to create value delivery systems Are more responsive to fast-changing markets More consistent and reliable in delivery of that value Requires that the supply chain as whole be focused on achieve. of these goalso Old Paradigm Companies P&G(Procter & Gamble) / Ford (Motor company) Marketing success ground rules- Strong brands- Backed by large advertise budgets- Aggressive sellingo New Paradigm Companies Companies must recognize it is through capabilities / competencies that they compete Orgs create superior value for customers/consumers By managing core processes better than competitors manage theirs Core processes =- new product development- supplier develop- order fulfillment- Customer mgmt. By performing core processes in more cost-effective way than competitors, orgs will gain advantage in marketplace. Competitive Advantage = Product excellence X Process