chapter 1
DESCRIPTION
global logisticTRANSCRIPT
Key Terms
–Big-box retailer
–Co-branding
–Container
–Cost trade-offs
–Disintermediation
–Economic utility
–Form utility
–Humanitarian logistics
– Landed costs
– Logistics
–Marketing channels
– Logistics
–Marketing channels
–Materials management
1-2 Copyright © 2015
Key Terms
–Physical distribution
–Place utility
–Possession utility
–Postponement
–Sorting function Stock-keeping units (SKUs)
–Stockouts
–Sustainable products
–Systems approach
–Tailored logistics
–Time utility
–Total cost approach
1-3 Copyright © 2015
Learning Objectives
• To discuss the economic impacts of logistics
• To define what logistics is
• To analyze the increased importance of logistics
• To discuss the systems and total cost approaches to logistics
1-4 Copyright © 2015
Learning Objectives
• To expose you to logistical relationships within the firm
• To introduce you to marketing channels
• To provide a brief overview of activities in the logistics channel
• To familiarize you with logistics careers
1-5 Copyright © 2015
Economic Impacts of Logistics
• Macroeconomic Impacts
• Economic Utility
– Possession utility
– Form utility
– Place utility
– Time utility
1-6 Copyright © 2015
Table 1-1: The Cost of the Business Logistics System in Relation to a Country’s Gross Domestic Product (GDP)
1-7 Copyright © 2015
Logistics: What It Is
• Council of Logistics Management definition: “Logistics is that part of the supply chain process 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.”
1-8
Source: www.cscmp.org
Copyright © 2015
The Increased Importance of Logistics
• A Reduction in Economic Regulation
• Changes in Consumer Behavior
• Technological Advances
• The Growing Power of Retailers
• Globalization of Trade
1-9 Copyright © 2015
The Systems and Total Cost Approaches to Logistics
• Systems Approach
– Interdependence of company and logistics goals and objectives
– Interdependence of functional areas
• Stock-keeping units (SKUs)
– Interdependence of logistics activities or
Intrafunctional logistics
1-10 Copyright © 2015
The Systems and Total Cost Approaches to Logistics
• Total Cost Approach
– Cost trade-offs: changes to one activity cause some costs to increase and others to decrease
– Total Logistics Concept: integration of all activities into a unified whole that seeks to minimize distribution costs in a manner that supports an organization’s customer service objectives
1-12 Copyright © 2015
• Marketing
– Place Decisions
– Price Decisions
• Landed costs
– Product Decisions
• Stockouts
• Sustainable products
– Promotion Decisions
1-14
Logistical Relationships within the Firm
Copyright © 2015
Marketing Channels
• “set of institutions necessary to transfer the title to goods and to move goods from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.” Source: American Marketing Association Dictionary, www.marketingpower.com
• Channel members
– Manufacturers
– Wholesalers
– Retailers
1-15 Copyright © 2015
Marketing Channels
• Ownership channel – Covers movement of the title to the goods
• Negotiations channel – Buy and sell agreements are reached
• Financing channel – Payments for goods
• Promotions channel – Promoting a new or existing product
• Logistics channel – Moving and storing product throughout the
channel 1-16 Copyright © 2015
Channel Intermediaries/Facilitators
• Ownership channel – Banks, finance companies
• Negotiations channel – Brokers
• Financing channel – Banks, insurance companies, finance companies
• Promotions channel – Advertising agencies, public relations agencies
• Logistics channel – Freight forwarders
1-17 Copyright © 2015
Activities in the Logistical Channel
• Customer service • Facility location
decisions • Inventory
management • Order management • Procurement • Transportation
management
• Demand forecasting • International logistics • Materials handling • Packaging • Reverse logistics • Warehousing
management
1-18 Copyright © 2015
Logistics Careers
1-19
• Logisticians need to be both a generalist and a specialist
– As a generalist, the logistician must understand the relationship between logistics and other corporate functions, both within and outside the firm.
– As a specialist, the logistician must understand the relationships between various logistics activities and must have some technical knowledge for various activities.
Copyright © 2015
Logistics Careers
• “Logistician” highlighted as one on the 50 best careers for the year 2010 and suggested that logistics employment should increase by 20% through 2018.
Source: Liz Wolgemuth, “The 50 Best Careers of 2010”, U.S. News & World Report, December 28, 2009.
1-20 Copyright © 2015
Logistics Careers
• Examples of Logistics-related jobs include:
– Logistics analyst
– Consultant
– Customer service manager
– Purchasing manager
– Transportation manager
– Warehouse operations manager Source: www.cscmp.org
1-21 Copyright © 2015
Logistics Professionalism
• APICS – The Association for Operations Management (www.apics.org)
• American Society of Transportation and Logistics (AST&L) (www.astl.org)
• Council of Supply Chain Management Professionals (www.cscmp.org)
• Delta Nu Alpha (DNA) (www.deltanualpha.org)
• International Society of Logistics (SOLE) (www.sole.org)
• Supply Chain & Logistics Association Canada (SCL) (www.sclcanada.org)
• The Chartered Institute of Logistics and Transport in the UK – CILT (UK) (www.ciltuk.org.uk)
• Warehousing Education and Research Council (WERC) (www.werc.org)
1-22
Professional Organizations Dedicated to Advancing the
Professional Knowledge of their members:
Copyright © 2015
Copyright Notice
1-23 Copyright © 2015
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.