Slide 1 : INPUTS OUTPUTS OPERATIONS People
Buildings
Raw materials
Equipments
Information
Investment
Etc. Goods
Services
Profits
Waste
Wages
Etc. Manufacture
Serve
Supply
Transport
Sell
Train
Etc. OPERATIONS RESULTS IN OUTPUT
DEMAND AND SUPPLY CYCLE : DEMAND AND SUPPLY CYCLE CUSTOMERS SUPPLY OF
PRODUCTS DEMAND FOR
PRODUCTS OPERATIONS OTHER
INPUTS OTHER
OUTPUTS PASSED TO CREATE PASSED TO ARRANGE
ROLE OF LOGISTICS : ROLE OF LOGISTICS Internal supplier Internal customer Operations within the organization External supplier External customer Materials Management Outbound
Logistics Inbound
Logistics Logistics
LOGISTICS : LOGISTICS Logistics is the function responsible for the flow of materials from suppliers into an organization, through operations within the organization, and then out to customers.
The supply system includes the process of planning, implementing, and controlling the efficient, effective flow and storage of goods and services from the organization from its place of production to the place where it is required. This supply system is referred as ‘Logistics Management’.
MATERIALS : MATERIALS Materials are all the things that an organization moves to create its products. These materials can be tangible (such as raw materials) and intangible (such as information).
Slide 6 : 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 by gardener Planted by forester Felled by
logger Chipped Processed Processed Finishing Cutting Transport Transport Transport Purchase SUPPLY CHAIN FOR PAPER
EXAMPLE OF SUPPLY CHAIN : EXAMPLE OF SUPPLY CHAIN Wholesaler Manufacturer Retailer Supplier Supplier Customer Customer
PROCESS OF SUPPLY CHAIN INTEGRATION : PROCESS OF SUPPLY CHAIN INTEGRATION Deliver Source Make Deliver Source Make Deliver Source Deliver Make Source Sub-supplier Supplier Enterprise Customer Sub-customer Enterprise Systems
SUPPLY CHAIN OF MILK : SUPPLY CHAIN OF MILK FARM MILK TANKER
COLLECTION Supplier Supplier Customer Customer DAIRY Supplier BOTTLING
PLANT Customer supplier Customer SUPER
MARKET DISTRIBUTER Customer Customer Customer Supplier Supplier
SUPPLY CHAIN MANAGEMENT - DEFINITION : SUPPLY CHAIN MANAGEMENT - DEFINITION A supply chain consists of activities and organizations that materials move through on their journey from initial suppliers to final customers.
As goods and services flow from supplier to producer to customer to final user, supply chain management is concerned with the interfaces between organizations.
SCM is the management of linkages between organizations.
SCM is a network of the manufacturer’s suppliers, and supplier’s suppliers on the one hand and customers and customer’s customers on the other hand. This network exists to ensure a free and smooth flow of information, goods, services and profits among all its participants.
OBJECTIVES OF SUPPLY CHAIN : OBJECTIVES OF SUPPLY CHAIN To reduce the physical supply chain links;
To define supply chain responsibilities to a core service competency
To decrease the time and cost of getting end user customer products in required quantity at the place of requirements.
ACTIVITIES IN A SUPPLY CHAIN : ACTIVITIES IN A SUPPLY CHAIN Initial Supplier 3rd tier Supplier 2nd tier Supplier 1st tier Supplier Organization 1st tier customer 2nd tierl customer 3rd tierl customer Final customer Upstream activities Downstream activities
SUPPLY CHAIN AROUND A MANUFACTURER : SUPPLY CHAIN AROUND A MANUFACTURER 3rd tier Supplier 2nd tier Supplier 1st tier Supplier Manufacture 1st tier customer 2nd tierl customer 3rd tierl customer Material Supplier Component Supplier Sub-assembly Supplier Wholesalers Retailers End users
SUPPLY CHAIN STAGES : SUPPLY CHAIN STAGES Supplier Wholesaler
/ Distributor Retailer Customer Retailer Customer Wholesaler
/ Distributer Supplier Supplier Wholesaler
/ Distributor Customer Retailer Manufacturer Manufacturer Manufacturer
MOVEMENT WITHOUT A WHOLESALER : MOVEMENT WITHOUT A WHOLESALER Factories 24 routes customers
MOVEMENT WITH A WHOLESALER : MOVEMENT WITH A WHOLESALER Factories 3 routes inwards customers WHOLESALER 8 routes outwards Using intermediaries simplifies the supply cahin
BENEFITS OF WELL DESIGNED SUPPLY CHAIN -1 : BENEFITS OF WELL DESIGNED SUPPLY CHAIN -1 Best location of operations, regardless of the 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 down the supply chain nearer to customers.
Higher price discouts to wholesalers due to large order size.
BENEFITS OF WELL DESIGNED SUPPLY CHAIN - 2 : BENEFITS OF WELL DESIGNED SUPPLY CHAIN - 2 Wholesaler keeps stocks of many suppliers, giving retailers a choice of goods.
Wholesalers are near to retailers and have short lead time.
Retailers carry less stocks as wholesalers provide reliable deliveries.
Retailers can have small operations, giving a responsive service near to customers.
Transport is simpler with fewer, larger deliveries thus reducing costs.
Organization can develop expertise in specific types of operations.
ACTIVITIES OF LOGISTICS : ACTIVITIES OF LOGISTICS Procurement /
purchasing Inward
transport Receiving Warehousing Stock control Order picking Materials handling Outward
transport Physical
distribution of
finished goods Recycling,
returns, and
waste disposal Locations communication