Chapter 1: Intro to logistics and supply chain management Flashcards
Define Logistics Management
Logistics management is that part of supply chain management that plans,
implements, and controls the efficient and effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.
- Describe the Megatrend: Globalisation
Significant factor that changed business operations
Compression of time and distance; disappearance of traditional political boundaries
- Describe the Megatrend: The empowered consumer
-internet allows access to wealth of information
-world of choices: compares prices, services, quality with extreme accuracy
-demands competitive prices, customised product offerings
-increased service expectations
- Describe the Megatrend: Shift in global economic power
-BRICS countries became exporters of innovation, capital and talent
-New geographies and sources: lead to new/different competitor profiles > markets may lose influence and become less attractive for business
- Describe the Megatrend: Demographic shifts
-Resource scarcity, shifts in economic power and drastic changes in societal norms
-Young and growing population: larger workforces/markets for consumer goods
-Increase pressure to create jobs/may affect business models
- Describe the Megatrend: Rise in technology
-Changes dynamics of business
-Consumers/firms access to seemingly unlimited information at any time
-Creates opportunities for collaboration
-Major breakthroughs in disciplines: AI + created new industries
- Describe the Megatrend: COVID-19 pandemic
-Highly disruptive+ serious challenge to conventional thinking and practice in supply chains
-Difficult demand fulfilment+ emergency items dominated supply chains
-Developed suitable humanitarian supply chains: deal effectively with demand requirements for future similar events
- Describe the Megatrend: Climate change and resource scarcity
-Higher demand for water/electricity
-Extreme weather conditions and rising sea levels: farming, fishing and hunting impossible in some places
-Increased conflict and political tension to gain control over scarce resources
- Define logistics: Military logistics
~Right support- right place- right time
~Includes rations, ammunition, equipment, vehicles, spare parts, medical services
- Define logistics: Engineering logistics
~Integrated logistics support, system operation and support, maintenance management
- Define logistics: Business logistics
~Commercial environment, demand/supply of raw and finished good
- Define logistics: Production logistics
Logistics that occur in production environment between raw and finished products.
- Define logistics: Reverse logistics
Logistics that occur when loads are returned, disposal of packaging materials, obsolete products.
- Define logistics: Construction logistics
~Delivery of construction materials at right time to right place
~Ensure that development is never stagnant: new buildings, old ones demolished/replaced
~Logistics done on the road: stress on existing congested infrastructure
- Define logistics: City logistics
Logistics of moving freight from place of origin to destination in most cost-effective way
- Define logistics: Humanitarian logistics
Primary objective of humanitarian logistics activities is to alleviate the suffering of vulnerable people. (Requires specific responses)
Describe Supply Chain Management
Set of inter- and intra-firm processes, produce and deliver goods/services to customers → central to survival of many firms in global business environments.
What will determine the future of business?
Competition between effective supply chain rather than individual firms.
True or False: firms do not exist in isolation.
True
What is the difference between supply chain and logistics?
-Logistics never focus on interrelationships with upstream/downstream entities.
-Supply Chain integrate elements clearly beyond organisational borders
True of False: Logistics adds value to the supply chain process?
True
Describe what Third-Party logistics entails.
Management structure where a third party fulfils certain roles and responsibilities regarding the provision of logistics services between the supplier (first party) and the clients or customers (second party). Also known as contract logistics or outsourcing.
Name the six types of 3PL service providers.
- Transportation based
- Warehouse and distribution based
- Forwarder based
- Shipper based
- Finance based
- Information based
Explain the 3PL service provider: Transportation based
Offers transportation service and comprehensive set of other logistics offerings
Explain the 3PL service provider: Warehouse and distribution based
Offers comprehensive warehousing services.
Explain the 3PL service provider: Forwarder based
~Independent agent with forwarder roles
~Non-asset owners that provide wide range of logistics services.
Explain the 3PL service provider: Shipper based
-Focuses on management of shipping process from beginning to end
-Provides technology (transportation management system)
-Gives information [freight data, matrix reports]
Explain the 3PL service provider: Finance based
Provides freight payment and auditing, cost accounting and control, and tools for monitoring, booking, tracking, tracing and managing inventory.
Explain the 3PL service provider: Information based
Significant growth/development of internet-based, business-to-business, electronic markets for transportation and logistics services.
Define Fourth-Party Logistics
An integrator that assembles the resources, capabilities and technology of its own organisation and other organisations to design, build and run comprehensive supply chain solutions.
How does 3PL differ from a 4PL in four main respects?
- 4PL sperate entity established as a joint venture or long term contract.
- It acts as a single interface between the client and multiple logistic service providers.
- All aspects of the client’s supply chain are managed by the 4PL organisation.
- It is possible for a 3PL provider to form a 4PL organisation within its existing structure.
What are 6 benefits of 4PL organisations?
- addresses strategic failures or 3PL services with a single point of contact to manage all aspects of the client of supply chain.
- addresses financial failures of 3PL services by releasing capital, through selling logistics assets to 4PL organisation on free market.
- addresses operational failures of 3PL services because new entity allows creation of totally new culture.
- realises opportunities by selling supply chain services to external clients.
- retains corporate supply chain knowledge.
- improves accountability.
Name the five Primary activities according to Porter’s Value Chain
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- Service
Describe Porter’s Value Chain Primary activity: Inbound logistics
Includes activities such as receiving, storing, listing and grouping inputs to the product.
Also included are functions such as materials handling, warehousing, inventory management, transportation scheduling and managing suppliers.
Describe Porter’s Value Chain Primary activity: Operations
Includes machining, packaging, assembly, maintenance of equipment, testing, operational management and so on
Describe Porter’s Value Chain Primary activity: Outbound logistics
Refers to activities such as order processing,
warehousing, scheduling transportation and distribution management.
Describe Porter’s Value Chain Primary activity: Marketing and Sales
Activities that make or convince buyers to purchase the company’s products. Included are advertising, promotion, selling, pricing, channel selection, retail management.
Describe Porter’s Value Chain Primary activity: Service
Has to do with maintaining the product after sale, thus guaranteeing quality and/or adding value in other ways such as through installation, training, servicing, providing spare parts and upgrading.
Name the 4 Secondary activities according to Porter’s Value Chain
- Procurement
- Technology development
- Human resource management
- Infrastructure
Describe Porter’s Value Chain Secondary activity: Procurement
Includes activities such as purchasing raw materials, servicing, supplies, negotiating contracts with suppliers, securing building
leases.
Describe Porter’s Value Chain Secondary activity: Technology development
Includes activities such as R&D, product
and/or process improvements, (re) design, developing new services.
Describe Porter’s Value Chain Secondary activity: HRM
Includes recruitment and education, as
well as compensation, employee retention and other means to fully capitalize on human resources.
Describe Porter’s Value Chain Secondary activity: Infrastructure
Includes general management, planning procedures, finance, accounting, public affairs and quality management
