After studying this chapter you will be able to understand: Secondary, or supporting; product scheduling; specify aggregate quantities; sequence and time production output; schedule supplies for production/operations; information maintenance (supports all other logistics activities); information collection, storage, and manipulation; data analysis; control procedures. | 1-1 Logistics Management LSM 730 Dr. Khurrum S. Mughal Lecture 5 1 Key Activities/Processes Secondary, or supporting Product Scheduling Specify aggregate quantities Sequence and time production output Schedule supplies for production/operations Information Maintenance (Supports all other logistics activities) Information Collection, Storage, and manipulation Data Analysis Control Procedures 1-2 The Activity Mix Difference between Key and Support activities Key activities almost in every logistics channel Contribute most to the total logistics cost 1-3 1-4 Critical Customer Service Loop 1-5 Significance of Logistics 1-6 Category Percent of sales $/cwt. Transportation $ Warehousing Order entry Administration Inventory carrying Total $ Physical Distribution Costs Add one-third for inbound supply costs (Costs in Dollars per Centum Weight) Source: Davis & Drumm (2002) Logistics cost are about 10% of sales w/o purchasing costs 1-7 Significance of Logistics 1-8 Customer Service Performance Source: Herb Davis & Company 1-9 Significance of Logistics 1-10 Significance of Logistics 1-11 Effect on Logistics Foreign Outsourcing Profit G & A Marketing Logistics Overhead Materials Labor Profit G & A Marketing Logistics Overhead Materials Labor Tariffs Increase Reduction Increase Domestic sourcing Foreign sourcing 1-12 Significance of Logistics 1-13 Wal-Mart Wins with Logistics! Sales: 1987 K-Mart $26 Billion Wal-Mart $ 16 Billion Wal-Mart’s Focus on supply chain Cash registers linked to HQs Trucks and modern distribution centers Costs are lower than K-Mart or Target Stores Wal-Mart is the largest retailer in the world! 1-14 Focus Company Suppliers Supplier’s suppliers Customers Customers/ End users Acquire Convert Distribute The Supply Chain is Multi-Enterprise Product and information flow Scope in reality 1-15 Reality of SC Scope 1-16 SUPPLY CHAIN MANAGEMENT Interfunctional coordination Interorganizational coordination Activity and process administration The Multi-Dimensions of SC | 1-1 Logistics Management LSM 730 Dr. Khurrum S. Mughal Lecture 5 1 Key Activities/Processes Secondary, or supporting Product Scheduling Specify aggregate quantities Sequence and time production output Schedule supplies for production/operations Information Maintenance (Supports all other logistics activities) Information Collection, Storage, and manipulation Data Analysis Control Procedures 1-2 The Activity Mix Difference between Key and Support activities Key activities almost in every logistics channel Contribute most to the total logistics cost 1-3 1-4 Critical Customer Service Loop 1-5 Significance of Logistics 1-6 Category Percent of sales $/cwt. Transportation $ Warehousing Order entry Administration Inventory carrying Total $ Physical Distribution Costs Add one-third for inbound supply costs (Costs in Dollars per Centum Weight) Source: Davis & Drumm (2002) Logistics cost are about 10% of sales w/o purchasing costs
