Chapter 1 Overview of Logistics Logistics Management is a part of supply chain management that plans implements and controls the efficient forward and reverse flow and storage of goods services between the point of origin and the point of consumption in order to meet customer requirements Logistics Issues today o Environmental uncertainty Fuel cost unrest in Middle East o Increasing focus on risk management building resiliency into supply chain to hedge against things like earth quakes fires o Sustainability Gov mandates increased consumer consciousness o Consolidation in transportation 3PL sectors o Increasing of user friendly analytical tools o Increased use of multi channel and cross channel order fulfillment order a tv from staples online to be shipped while picking up headphones from in store Logistics is receiving increased focus interest o Increasing competitive pressure Place Customer Service is the hardest component for competitor to replicate Logistics competency is one way that a company can outcompete others in its industry by providing outstanding customer service Also allows smaller firms to differentiate from bigger companies o Shift in Channel Power development category killer stores such as Wal Mart best buy home depot has result in shift of power from manufacturers to retailers Suddenly manufacturers must provide outstanding service i e delivery within an hour time window or their product sits for a day o Globalization Supply chains are growing increasingly longer with the move towards lean operations inventory levels have been consistently reduced o Increasing Role of IT organizations improves cost performance and operational efficiency Companies are drowning in data now they have to turn it into useful information Information visibility within and across o Product Proliferation Companies have greatly increased the number of product offerings within categories to try and secure niche customers Also SKU proliferation greatly increases the challenge of inventory management requires higher levels of safety stock demand become harder to read o Increasing of Delivery Points Retail outlets are beginning to expand their product offerings making the logistics process even more complicated for manufacturers and distributors Logistics Relation to other functions Place Time Logistics Logistics spending in on the rise 1 33 trillion in 2012 Chapter 5 Supply Chain Management Lots of name changes consultants who try to differentiate their offerings Logistics is a part of Supply Chain Management Our definition of Supply Chain Management Supply Chain Management the management of relationships in the network of organizations from end customers through original suppliers using key cross functional business processes to create value for customers and other stakeholders Elements and Key Decisions o Process o Structure o Components process what processes should be linked with each of the members What are the key members What level of integration should be applied for each Customer Relationship Management Process o Customer relationships are managed by customer teams which negotiate mutually beneficial product service agreements with large strategically significant customers o Customer teams develop and implement customer partnering programs o Product service agreements are established o Key performance evaluation criteria both company performance and customer account profitability are used to measure results Supplier Relationship Management Process o Relationships with major suppliers are corporately managed as partnerships o Product service agreements are developed and managed with key suppliers and segments of non key suppliers o Teams work with suppliers to reduce costs and improve service o Goal is to improve the profitability of both the focus firm and the suppliers o Purchase order transactions are integrated with the supply process to improve productivity and all areas of supplier performance Motivations for Supply Chain Management o External o Internal organization channels Changing Customers Technology Critically of speed Partnering with choice suppliers applies to multiple While supply chain management is the current trend functional logistics knowledge never goes out of style Chapter 6 Procurement Partnership is a tailored business relationship based on mutual trust openness shared risk and shared rewards that results in business performance greater than would be achieved by two firms working together in the absence of partnership o Types include Arm s Length Type 1 low level component Type 2 med level component Type 3 high level component Vertical Integration Join Venture o Why Partner To gain the advantages of vertical integration while still maintaining organizational independence To take advantage of best in class expertise To achieve service improvements To gain operational efficiencies To respond to competition o Deciding who to partner with o Model Developed to match suppliers compelling reasons to partner expected Partnership Drivers benefits The stronger the drivers the more chance of successful partnership Partnership Facilitators the likelihood of partnership success Ie corporate compatibility management philosophy symmetry etc More Driver points Facilitators points higher level of partnership Environmental factors which increase o 5 Lessons Learned You must be willing to look at things differently Most companies have a lot more in common than they think Visibility is key to building trust Mistakes happen the problem is not learning from them A well structured plan that is closely monitored is key for ensuring results Chapter 7 Customer Service Customer service is the output of the logistics function and is the place component of the marketing mix Customer service is crucial for a company s success because while the other components may attract one time buyers customer service is crucial for a company to keep customers o Rule of thumb is that it is 5x less expensive to sell to existing customers than find new customers o Existing customers are more loyal often buy more good referrals Pre Transactional Elements o Establish a good customer service policy o Communicate the policy to customers o Formally establish the policy Transactional Elements o Stockout levels o Order info o Elements of order cycle o System accuracy o Order convenience o Substitution Post Transactional Elements o Installation warranty repairs o Product tracing o Customer claims complaints