scm logistics introduction

8/2/2019 SCM Logistics Introduction

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INPUTS OUTPUTSOPERATIONS

Introduction to Logistics and SCM

Logistics supports activities of companies at their inputs,throughput or operations and at their output.

Logistics has an important role towards customers, as wellas towards suppliers..


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INPUTS OUTPUTSOPERATIONS

PeopleBuildingsRaw materialsEquipmentsInformation

InvestmentEtc.

GoodsServicesProfitsWasteWagesEtc.

ManufactureServeSupplyTransportSell

TrainEtc.

Inputs, operations, output


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ROLE OF LOGISTICS

Internalsupplier

Internalcustomer

Operations within theorganization

External supplier External customer

MaterialsManagement

Outbound

LogisticsInbound

Logistics

Logistics


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DEMAND AND SUPPLY CYCLE

CUSTOMERS

SUPPLY OFPRODUCTS

DEMAND FORPRODUCTS

OPERATIONS

OTHERINPUTS

OTHEROUTPUTS

PASSED TO CREATE

PASSED TOARRANGE


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LOGISTICS

Logistics is the function responsible for theflow of materials from suppliers into anorganization, through operations within theorganization, and then out to customers.

The supply system includes the process ofplanning, implementing, and controlling theefficient, effective flow and storage ofgoods and services from the organizationfrom its place of production to the placewhere it is required. This supply system isreferred as Logistics Management.


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MATERIALS

Materials are all the things that anorganization moves to create itsproducts. These materials can be

tangible (such as raw materials) andintangible (such as information).


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EXAMPLE OF SUPPLY CHAIN

WholesalerManufacturer Retailer

Supplier

Supplier

Customer

Customer


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PROCESS OF SUPPLY CHAININTEGRATION

Deliver Source Make Deliver Source Make Deliver Source DeliverMake Source

Sub-supplier

Supplier Enterprise Customer Sub-customer

Enterprise Systems


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SUPPLY CHAIN MANAGEMENT -DEFINITION A supply chain consists of activities and

organizations that materials move through on theirjourney from initial suppliers to final customers.

As goods and services flow from supplier toproducer to customer to final user, supply chain

management is concerned with the interfacesbetween organizations. SCM is the management of linkages between

organizations. SCM is a network of the manufacturers suppliers,

and suppliers suppliers on the one hand and

customers and customers customers on the otherhand. This network exists to ensure a free andsmooth flow of information, goods, services andprofits among all its participants.


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SC of milk

FARMMILKTANKER

COLLECTION

Supplier

Supplier

Customer

Customer

DAIRY

Supplier

BOTTLINGPLANT

Customer

supplier

Customer

SUPERMARKET

DISTRIBUTER

Customer

Customer

Customer

SupplierSupplier


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OBJECTIVES OF SUPPLY CHAIN

To reduce the physical supply chainlinks;

To define supply chain responsibilities to

a core service competency

To decrease the time and cost of gettingend user customer products in required

quantity at the place of requirements.


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ACTIVITIES IN A SUPPLY CHAIN

InitialSupplier

3rd tierSupplier

2nd tierSupplier

1st tierSupplier

Organization

1st tiercustomer

2nd tierlcustomer

3rd tierlcustomer

Finalcustomer

Upstream activities

Downstream activities


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SUPPLY CHAIN AROUND AMANUFACTURER

3rd

tierSupplier

2nd

tierSupplier

1st

tierSupplier

Manufacture

1st tiercustomer

2nd tierlcustomer

3rd tierlcustomer

MaterialSupplier

ComponentSupplier

Sub-assemblySupplier

WholesalersRetailersEndusers


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MOVEMENT WITHOUT AWHOLESALER

Factories

24 routes

customers


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MOVEMENT WITH AWHOLESALER

Factories

3 routes inwards

customers

WHOLESALER

8 routes outwards

Using intermediaries simplifies the supply cahin


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BENEFITS OF WELL DESIGNEDSUPPLY CHAIN -1

Best location of operations, regardless ofthe location of customers.

Concentrating operations in large facilities,

benefits of economies of scale obtained. Producers do not keep large stocks of

finished goods, as the same are kept downthe supply chain nearer to customers.

Higher price discouts to wholesalers due tolarge order size.


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BENEFITS OF WELL DESIGNEDSUPPLY CHAIN - 2

Wholesaler keeps stocks of many suppliers, givingretailers a choice of goods.

Wholesalers are near to retailers and have shortlead time.

Retailers carry less stocks as wholesalers providereliable deliveries.

Retailers can have small operations, giving aresponsive service near to customers.

Transport is simpler with fewer, larger deliveriesthus reducing costs.

Organization can develop expertise in specifictypes of operations.


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Seedling Young Tree Mature Tree Logs

Final Customer

Small roll of

Finished paper Large roll of paper

Sheets of paper Packer Wholesaler Retailer

Raw Paper Wood Pulp

Grown bygardener

Plantedby

forester

Felled by

logger

Chipped

ProcessedProcessedFinishing

Cutting

Transport Transport Transport

Purchase

SUPPLY CHAIN FOR PAPER


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ACTIVITIES OF LOGISTICS

Procurement /purchasing

Inwardtransport

Receiving Warehousing

Stock control Order picking Materials handling

Outward

transport

Physicaldistribution of

finished goods

Recycling,returns, and

waste disposal

Locations communication

scm logistics introduction

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