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From Logistics Management to Supply Chain Management
Speaker: Chen Yuh-Wen
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Content
• Basic Concepts of Logistics Management
• Basic Concepts of Supply Chain Management
• From Logistics Management to Supply Chain Management: A Simple Software
• Future Works
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Basic Concepts of Logistics Management
• Definition• Logistics Strategy and Planning• Logistics Network• Relative Importance of Service Elements• Customer Order Processing• Transportation System• Storage and Handling System• Inventory Policy
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Logistics Strategy
• Objectives of logistics strategy– Cost reduction– Capital reduction– Service improvement
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Major Planning Areas of Logistics Management
• Customer service goals
• Facility location strategy
• Inventory decisions
• Transport strategy
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Logistics Network
The Logistics Network consists of:
• Facilities:Vendors, Manufacturing Centers, Warehouse/ Distribution Centers, and Customers
• Raw materials and finished products that flow between the facilities.
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Supply
Sources:plantsvendorsports
RegionalWarehouses:stocking points
Field Warehouses:stockingpoints
Customers,demandcenterssinks
Production/purchase costs
Inventory &warehousing costs
Transportation costs Inventory &
warehousing costs
Transportation costs
• ©Copyright 1999 D. Simchi-Levi, P. Kaminsky & E. Simchi-Levi
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The objective of Logistics Management is to balance service level against
• Production/ purchasing costs
• Inventory costs
• Facility costs (storage, handling and fixed costs)
• Transportation costs
• Lost Sales Cost
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Relative Importance of Service Elements
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Customer Order Processing
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Transportation System
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Storage and Handling System
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Inventory Policy
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Basic Concepts of Supply Chain Management
• Definition
• The Dynamics of the Supply Chain: The Bullwhip Effect
• Strategic Partnering
• Postponement
• IT and Decision Support System .
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Definition of SCM
• Definition:Supply Chain Management is concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed in the right quantities, to the right locations and at the right time, and so as to minimize total system cost subject to satisfying service requirements.
• Notice:– Every partner is involved– Systems approach to reducing costs– Integration is the key
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SupplierPartner 1
SupplierPartner 2
Enterprise
Mfg.Partner 3
Mfg.Partner 2
LogisticsSupplier 1
Mfg.Partner 1
LogisticsSupplier 2
Customer 3
Customer 2
Customer 1
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The Dynamics of the Supply Chain : The Bullwhip Effect
Ord
er
Siz
e
Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998
CustomerDemand
CustomerDemand
Retailer OrdersRetailer OrdersDistributor OrdersDistributor Orders
Production PlanProduction Plan
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Strategic Partnering• Advanced Information Systems
• Top Management Commitment
• Mutual Trust
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PostponementBenetton …Old Manufacturing Process
Spin or Purchase Yarn
Dye Yarn
Finish Yarn
Manufacture Garment Parts
Join Parts
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PostponementBenetton…New Manufacturing Process
Spin or Purchase Yarn
Manufacture Garment Parts
Join Parts
Dye Garment
Finish Garment
This step is postponed
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IT and Decision Support System
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From Logistics Management to Supply Chain Management
• Integration– Information Technology
– Database Sharing
– Work Language (Code)
– Global Optimization
• A Simple Model D:\.企業供應鏈管理決策模型之研究 ppt
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Future Work
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Suggested Future Researches
• Alliances and SCM
• Allocation Problem and SCM
• Intelligent SCM