Logistics & Supply Chain Management Overview

• Course Name: Logistics and Supply Chain Management
• Instructor: Dr. Sally Raouf
• Semester: Spring; Level 2
• Academic Year: 2024-25
• Course Code: SCH201
• Prerequisite: MGT101 - Principles of Management

Course Overview

• Students learn the components of supply chain management and its role within and across enterprise functions.
• Objectives are to create value, build competitive infrastructure, leverage worldwide logistics, synchronize supply with demand, and measure performance globally.
• Logistics involves the storage and distribution of goods and services in the right quantity, condition, time, and place.

Textbook References

• Bowersox et al. (2020). Supply Chain Logistics Management. 6th ed. McGraw Hill.
• Christopher. M. (2011). Logistics and Supply Chain Management. 4th ed Pearson

Assessment

• The course includes both conceptual and numerical components
• Two Quizzes worth 20 marks
• Assignments and Participation worth 10 marks
• Midterm exam worth 20 marks
• Final Exam worth 50 marks
• 50% of both Midterm and Final exams is assessed with Essay format

Course Topics

• Logistics and supply chain management introductory concepts
• Logistics and customer value
• Customer accommodation
• Integrated operations planning (synchronizing supply and demand)
• Procurement
• Inventory management
• Transportation
• Warehousing
• Global supply chain
• Performance measurement

Distribution Channels

• These are intermediaries like facilitators, middlemen, and distributors.
• They display, sell, or deliver the product from the producer to the end user

Distribution Channel Member

• Any member between the point of production and final consumption

Logistics

• A process of activities that creates value focused on the design and administration of a system to control timing and geographical positioning.
• This system manages raw materials, work-in-progress, and finished inventories at the lowest total cost.
• It involves coordinating, moving and storing goods and resources between set points.

Two sets of activities in Logistics:

• Inbound logistics involves receiving, storing, and distributing incoming goods or raw materials for production

• Securing supply for a business is a key focus

• Activities include receiving/handling from suppliers, warehousing/materials handling, RM inventory management, inbound transportation, and supplier relationship management.

• Outbound logistics involves processes to deliver finished products to customers and fulfilling demand

• Activities include warehousing final goods, order processing, packing, outbound transportation, finished goods inventory management, marketing communications, and returns management (reverse logistics).

Logistical Activities

• Five activities: Order processing, Warehousing and materials handling, Inventory management, Transportation, Facility network design

Supply Chain

• A longer distribution channel, this starts from raw materials to components to finished products carried to the final consumer.

Upstream

• Raw materials flow into a manufacturing company (factory) from suppliers

Downstream

• Materials are processed by a factory and finished goods are distributed to end consumers through a Physical distributions System

Upstream SCM Activities

• Demand forecasting.
• Sourcing, supplier selection and Procurement.
• Forward(inbound) logistics (receiving materials, raw material inventory management, inbound transportation and supplier relationship).
• Supplier relationship collaboration.
• Quality assurance and control.

Downstream SCM Activities

• Demand management (synchronizing supply and demand through production planning).
• Life cycle support.
• Customer relationship management.
• Performance monitoring.
• Outbound logistics (warehousing, inventory management, order fulfillment, packing, distribution, marketing and sales and.
• Returns management or reverse logistics).

SCM

• A broader concept than logistics and materials management
• Includes all activities of logistics plus planning, analysis, and improving each activity of logistics

Logistics Management

• Concerned with coordinating, moving, and storing resources around the business from suppliers to customers (business or final consumers).
• These activities include 4 Ms being manpower, materials, machines and money from one destination to another throughout the supply chain.

Materials Management

• Concerned with moving materials around the business from suppliers to customers (business or final).
• Involves coordinating and moving materials from one point to another throughout the supply chain

Supply Chain Management

A set of processes used to effectively and efficiently integrate suppliers, manufacturers, distribution centers, distributors, and retailers

• So products are produced and distributed with right quantities, location and time
• Achieved to minimize system-wide costs while achieving consumer value proposition
• Involves the management of upstream and downstream relationships with suppliers and customers
• This delivers superior customer value at less cost to the supply chain as a whole

Supply Chain Management Definition

• Linked major business processes, that drives competitive advantage, within and across companies into a high-performance model.
• Integrates supply and demand management within and between companies

Competitive Advantage

• Effective logistics and SCM can provide major competitive advantage
• Model is called the "three Cs" which covers company, customers and competitors

Competitive Advantage Sources

• Company can differentiate itself (Value) from its customer
• By using lower cost it could achieve greater profit

Cost Advantage

• The low-cost producer is likely to have sector’s greatest sales volume
  • Economies of Scale: More Production
    • Fixed costs can be spread across a greater volume
  • The impact of the ‘experience curve’
    • The Total cost per unit decreases as workers become more skilled

Value Advantage

• Providing more Value than Competitors in variety, responsiveness, customisation
• Can achieve a more segmented approach to the market

Four Cases for Companies

-Commodity market provider - Low value add and low cost - Products indistinguishable from competitors - There is no real cost advantage - The strategy to move in matrix to either - Cost leadership or service leadership

Cost Leadership

 - Low Value and high cost 
 - Through economies, scale and experience

Total costs drop allow products at lower prices than peers.

Service Leader

• High Value and low cost
  • To deliver performance through
    • Greater responsiveness -Reliability and excellence

Cost and Service Leader

 - Appropriate and effective supply chain

Outsourcing

• Value chain disaggregates firm into relevant activities to see cost behaviour
• Also provides ways to get competitive advantage
  • Performing activities more cheaply or better than competitors
• Organisations need to look at each activity in value chain evaluate real competitive advantage
• If lack advantage consider outsourcing to enable a cost-effective or value-added partner.
• In other words, the supply chain becomes the value chain

Eight Supply Chain Integrative Processes

• Demand Planning Responsiveness: Achieving maximum responsiveness.
• Customer Relationship Collaboration: Facilitating strategic information sharing.
• Order Fulfillment & Service Delivery: Ability to execute superior order-to-delivery performance.
• Product/Service Development Launch: Participation in product/service development.
• Manufacturing Customization: Facilitating postponement.
• Supplier Relationship Collaboration: Managing supplier relationships.
• Life Cycle Support: Repairing and supporting products.
• Reverse Logistics: Returning and managing inventories for cost effectiveness.

Supply Chain Value Proposition

• A combination of goods and services and to customers by configuring the supply chain
• This increases quality, productivity and operational excellence while achieving EERS (Effectiveness, Efficiency, Relevancy and Sustainability)
• Service Excellence leads to Effectiveness
• Cost Minimization and Avoidance leads to Efficiency
• Value Generation - Relevancy.
• Continuous Improvement - Sustainability.

Value Performance

• Effectiveness refers to delivering products in a timely manner to the consumer's desired location.
• Efficiency refers to delivering products at the minimum total cost, including all process costs.
• Relevancy refers to ability to react to changes in the environment, marketplace, or consumer requirements.
• Sustainability refers to the firm's ability to reconfigure the supply chain to enhance both the environment and the firm.

Supply Chain Responsiveness

• Anticipatory (Push) Business model: Using traditional Supply Chain Model
• Responsiveness(Pull) Business Model: Uses a responsive demand driven model

Anticipatory Business Model ("Push”)

• Is a traditional supply chain business model based forecast of expected demand
• Production is completed before actual demand, results in higher risk as inventory accumulates.

Responsive Business Model ("Pull')

• From ‘customer backwards to the factory.
• Consumer now not at end, but at start
• Needs:
• Joint planning with supply chain partners.
• Technology to share knowledge regarding customer demand.
• Agile adapts to market and Use of a build-to-order model in which production starts only after customer order is confirmed.

Agility Achievement

• Synchronize activities through shared supermarket POS data
• Work smarter not wastefully to eliminate or re-engineer inefficient processes
• Partner with suppliers for inbound lead time reduction
• Reduce complexity by simplifying designs.
• Complete some activity to an incomplete stage assembly until a work in progress stage
• Manage interconnected processes through cross functional interdepiclany teams
• Apply metrics to drive perfect alignment

Globalization Opportunities

• Attractive due to unmet domestic demand
• 90% of global demand is not fully satisfied by local supply using matching resources of components
• Moving distribution manufacturers to countries with favourable cost/labour

Global Logistics Differences

• Distance of Operations is higher than domestic business
• Documentation for Transactions are higher with more complex transactions
• Dealing with diversity of work activities
• Consumer need to deal with cultural differences

Supply Chain Disruptors

• "Want it now" mentality.
• Personalization.
• Smaller, sustainable Millennial preferences
• Omnichannel.
• Aging consumer needs
• Technology such as, Automous vehicles and IOT
• AI Support in decision
• Apply Uber distribution models for mass customization
• Using 3D Printing with big data through alternative fuels