After studying this chapter you will be able to understand: The logistics/supply chain product, product in the planning triangle, nature of the product, product life-cycle curve, nature of the product. | 1-1 Logistics Management LSM 730 Dr. Khurrum S. Mughal Lecture 10 1 3-2 The Logistics/Supply Chain Product “Logistics/Supply Chain managers are ‘owners’ of the product-flow process from raw material sources to final consumers, not activity administrators.” 3-3 Product in the Planning Triangle PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord . proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord . proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • . | 1-1 Logistics Management LSM 730 Dr. Khurrum S. Mughal Lecture 10 1 3-2 The Logistics/Supply Chain Product “Logistics/Supply Chain managers are ‘owners’ of the product-flow process from raw material sources to final consumers, not activity administrators.” 3-3 Product in the Planning Triangle PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord . proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord . proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process Nature of the Product Product classification Consumer Products Convenience goods Shopping goods Specialty goods Industrial goods 1-4 Nature of the Product Product classification Consumer Products Convenience Products Purchased Frequently with little comparative shopping Distributed through multiple outlets High distribution costs justified by increased sales Example: vending machines for coca-cola 1-5 Nature of the Product Product classification Consumer Products Shopping Products Consumers seek and compare Comparing quality, price and performance Few outlets to be maintained Distribution costs are lower Examples: Furniture, Medical Services, Automobiles etc 1-6 Nature of the Product Product classification Consumer Products Specialty Products Buyers expend substantial effort Buyers wait significant amount of time to get the particular product Distribution is centralized Lowest physical distribution .
