basic supply chain conceptsx

ELA Certification for Logistics Professionals

Performance Criteria (Standards – 2nd Layer)

2 Supervisory/Operational Management Level (EJLog)

2.0 Basic Supply Chain Concepts

European Logistics Association

Standards – 2nd Layer Version 110101

© European Certification Board for Logistics 2011 1 Basic Supply Chain Concepts

2.0.1 Explain the scope and role of component activities within the supply chain

• Understand the terms “logistics management” and “supply chain management”

• Understand and apply the basic logistics terminology

• Understand the historical development [e.g. military, business/products, services, changes and enlargement] and briefly explore how logistics has developed over time

• Identify logistics as the management of goods flows {and related information and financial flows} within a system organised to achieve specific objectives

• Identify supply chain management as working together across and between businesses/business partners in a chain or network

• Determine the component activities within logistics and the supply chain

2.0.2 Map a supply chain identifying component activities

• Define the various parts of logistics management [e.g. incoming materials/purchasing/supply logistics, production logistics, distribution logistics/outgoing goods and reverse/return logistics]

• Understand the differences in logistics management between industrial companies, trading organisations, government agencies and the services sector

• Identify the types of goods flows

• Identify the decisions taken in the various parts of a supply chain

2.0.3 Identify the source and characteristics of supply and demand

• Understand the changes in consumption, production and distribution patterns

• Identify characteristics of supply and demand

• Understand logistics in terms of matching the customer demand and the supply side, integrating the own company, external suppliers and service providers

2.0.4 Explain how supply chain management contributes to competitive advantage

• Understand how logistics and supply chain management contributes to competitive advantage

2.0.5 Identify how the supply chain activity contributes to sustainability

• Understand the impact of logistics and supply chain management on sustainability



• Understand the requirements for environmentally friendly design of products and packaging materials, re-use and recycling

2.0.6 Explain how MTS, ATO, MTO and ETO configurations work

• Understand and apply the concepts of customer order decoupling point [e.g. Make–to-Stock = MTS, Assemble–to–Order = ATO, Make–to-Order = MTO, Engineer–to–Order = ETO]

• Understand the role of inventory

2.0.7 Determine the lead times within a supply chain

• Understand and apply the difference between delivery time and lead/throughput time/reaction time

• Understand the principles of time-based competition [e.g. reducing lead time/cycle time and delivery time; time compression]

• Identify various categories of lead times [e.g. design, sourcing, manufacturing, distribution, delivery, ordering]

• Measure lead time

• Identify the major factors impacting lead time

2.0.8 Assess the barriers that hinder supply chain flows

• Understand that logistics decisions are made at various strategic, structural, tactical, functional and operational levels [e.g. strategic = customer service requirements, business objectives, logistics objectives; structural = make/buy, number/location/size of facilities, modes of transport, degree of automation; functional = site selection, inventory deployment, carrier selection, roles and responsibilities; operational = operating policies, control rules, procedures, scheduling, routing]

• Understand the role of interfaces (technical and organisational) in supply chain flows

• Identify barriers in goods flows and information flows

• Understand the role of transparency and trust in supply chain collaboration

• Define appropriate action to improve supply chain flows in and between organisations

2.0.9 Identify how changes in supply and demand impact cost to serve

• Understand and apply the concept of customer service

2.0.10 Identify opportunities for trade-offs between supply chain activities

• Understand the concept of quality/reliability and continuous improvement



2.0.11 Identify the key roles for information and IT within the supply chain

• Understand the role and benefits of IT within the supply chain

• Identify the information needs within the supply chain

• Identify logistics information systems and related software in logistics and supply chain management [e.g. MRP-I, MRP-II, DRP, ERP, APS, TMS, WMS]

• Understand how functional logistics information systems work together and the requirements on interfaces [e.g. EDI]

• Assess the use of information and communication technology [ICT] and their impact on logistics performance

• Understand chances and challenges related to the application of RFID technology in the supply chain

basic supply chain conceptsx

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