LOGISTICS FINAL EXAM STUDY GUIDE CHAPTER 1 AN OVERVIEW OF LOGISTICS CSCMP Council of Supply Chain Management Professionals definition Page 4 Logistics management is that part of Supply Chain Management that plans implements and controls the efficient effective forward and reverse flow and storage of goods services and related information between the point of origin and the point of consumption in order to meet customers requirements Types of Utility Form what Production Operations Refers to a product s being in a form that 1 can be used by the customer and 2 is of value to the customer Place where Logistics Refers to having products available where they are needed by customers products are moved from points of lesser value to points of greater value Time when Logistics Refers to having products available when they are needed by customers Possession the transaction Finance Refers to the value or usefulness that comes from a customer being able to take possession of a product Why has logistics gained importance Increasing Competitive Pressures Shift in Channel Power Globalization Development of IT systems the Increasing Importance of Information Increased Product Proliferation Increased Number of Delivery Points Systems approach Page 9 indicates that a company s objectives can be realized by recognizing the mutual interdependence of the major functional areas of the firm such as marketing production finance and logistics Implication 1 Goals should be compatible with the company s goals and objectives Implication 2 decisions made by one functional area should consider the potential implications on other functional areas Total Cost Approach Page 12 coordinate materials management and physical distribution in a cost efficient manner All relevant activities in moving and storing products should be considered as a whole not individually Key is that all relevant logistical cost items are considered simultaneously when making a decision Logistics interaction with other functional areas Activities in the Logistics Channel Page 17 CHAPTER 5 THE SUPPLY CHAIN MANGEMENT CONCEPT Supply Chain Management SCM Page 78 According to the CSCMP SCM encompasses the planning and management of all activities involved in sourcing and procurement conversion and all logistics management activities Importantly it also includes coordination and collaboration with channel partners which can be suppliers intermediaries third party service providers and customers In essence supply chain management integrates supply and demand management within and across companies Supply Chain Page 79 encompasses all activities associated with the flow and transformation of goods from the raw material stage extraction through to the end user as well as the associated information flows Supply Chain Operations Reference SCOR Page 80 identifies five key processes Plan Source Make Deliver Return associated with SCM FILL OUT CHART IN AN EXCEL FILE Global Supply Chain Forum GSCF Model Page 80 Attributes Affecting SCM Implementation Page 81 Customer Power Fast supply chain emphasizes a speed and time component Agile Supply Chain focuses on an organization s ability to respond to changes in demand with respect to volume and variety Failure to be fast and agile results in decreased market share Perfect Orders An order that simultaneously achieves relevant customer metrics Lean Supply Chain focuses on eliminating all waste including time and ensuring a level schedule Legality combines agility and leanness as a way to focus part of one s supply chain on a timely response to customer orders and or product variety and another part of the supply chain on leveling out the planning requirements to smooth production Long Term Orientation Partnerships positive long term relationships between supply chain participants Leveraging Technology Enhanced Communication Across Organizations Inventory Control Bullwhip effect characterized by variability in demand orders among supply chain participants results in inventory lumps INterorganizational Collaboration Supply Chain Collaboration cooperative supply chain relationships formal or informal between manufacturing companies and their suppliers business partners or customers developed to enhance the overall business performance of both sides Supply Chain Facilitators Third Party Logistics That one company e g a manufacturer allows a specialist company to provide it with one or more logistics functions e g warehousing outbound transportation Barriers to SCM Implementation Page 88 Regulatory and Political Considerations Political considerations and governmental stability are two barriers Tension in the Middle East Lack of Top Management Commitment Weak management in 2 3rds of organizations Reluctance to Share or Use Relevant Information Technology in certain ways is dwindling SCM Incompatible Information Systems Incompatible Corporate Cultures Globalization CHAPTER 7 DEMAND MANAGEMENT ORDER MANAGEMENT AND CUSTOMER SERVICE Demand Management Page 113 the creation across the supply chain and its markets of a coordinated flow of demand Order Management Page 115 management of the various activities associated with the order cycle The order cycle refers to the time from when a customer places an order to when the goods are received Customer Service Page 120 the ability of logistics management to satisfy users in terms of time dependability communication and convenience 3 Basic Types of Forecasting Models Page 113 1 Judgmental Forecasting involves using judgment or intuition and is preferred in situations where there are limited or no historical data such as with a new product introduction Include surveys and such Time Series Forecasting future demand is solely dependent on past demand 2 3 Cause and effect forecasting assumes that one or more factors are related to demand and that the relationship between cause and effect can be used to estimate future demand Order fulfillment Process Page 116 1 Order transmittal refers to the time from when the customer places an order until the seller receives the order 5 ways to transmit order in person by mail by telephone by fax and electronically 2 Order Processing refers tot the time from when the seller receives an order until an appropriate location such as warehouse is authorized to fill the order 3 Order Picking and Assembly includes all activities from when an appropriate location such as warehouse is authorized to fill the order until goods are loaded aboard an