Chapter 2 scm

UNIT ONE

CHAPTER 2

ROLE OF LOGISTICS IN SUPPLY CHAIN

Logistics basically connects the source of supply
with the source of demands.

Logistics fills the gap between supply and demand.

…..an integrated system.
….. Logistics is an information-based activity of
moving goods from one place to another.

Supply chain management integrates the
supplier, distributor and customer logistics
requirements into one cohesive process
to include demand planning, forecasting,
materials requisition, order processing,
inventory allocation, order fulfilment,
invoicing and bills payment.

Logistics refers to the movement of materials
within a production facility, the shipment of
incoming materials from suppliers and shipment
of outgoing products to customers

SCM is the process of integration to bridge the gap
between supply and demand.

SCM may be viewed as a logical extension of
logistics management.

Till last class (11.02.2013)…

Beginning of class (12.02.2013)…

Logistics typically refers to activities that occur
within the boundaries of a single organization and
supply chains refer to networks of companies that
work together and coordinate their actions to
deliver a product to market.

Also traditional logistics focuses its attention on
activities such as procurement, distribution,
maintenance, and inventory management. Supply
chain management acknowledges all of traditional
logistics and also includes activities such as
marketing, new product development, finance, and
customer service.

DEFINING LOGISTICS…

…LOGISTICS IS USED IN BUSINESS FOR MOVEMENT
OF INVRNTORY FROM VENDORS TO THE
MANUFAURERS AND FINALLY THE FINISHED
PRODUCTS TO THE CONSUMERS.

American Council of Logistics Mgt.:

The process of planning, implementing and
controlling the efficient, cost effective flow and
storage of raw materials, in-process inventory,
finished goods and related information from
point of origin to point of consumption for the
purpose of conforming to customers’ requirement.

Philip Kotler:

Planning, implementing, and controlling the
physical flows of materials and finished goods
from point of origin to point of use to meet the
customer’s need at a profit.

Martin Christopher:
Logistics is essentially a planning and an
information based activity.

Philip Scary:
The corporate traffic cop that directs flow of
material from source through production and
distribution to the final customer.

The function of logistics ultimately supports
corporate goals by delivering products to the
consumer at a time and place of his choice, at
an affordable cost.

The need of logistics management arises because of:
i.) competitive pressures
ii.) information technology
iii.) channel power
iv.) profit leverage

COMPONENTS OF SCM:
WAREHOUSING NETWORK
TRANSPORTATION NETWORK
INVENTORY CONTROL SYSTEM
SUPPORTING INFORMATION SYSTEM

……. Objective: delivering the right product
at the right place at the right time at
the least cost.

The logistics system has to strike balance
between the two polemic objectives of
customer service and cost.

Logistics makes it possible to deliver
products to the customer anywhere
irrespective of its manufacturing location.

The success of the supply chain depends to a
great extent on logistics.
For logistics and supply chain to be successful, the
following need to be planned and managed properly:
I. Close coordination with the suppliers
II. Reduction of inventory levels
III. Speed, reliability and consistency in inventory
movement
iv. Faster replenishment cycle
v. Shorter performance cycle
vi. flexible manufacturing cycle
vii. Asset utilization and productivity
viii. Innovation for value additions in customer service
offerings

Chapter 2 scm

More Related Content

What's hot (11)

Viewers also liked (20)

Similar to Chapter 2 scm (20)

Chapter 2 scm