Test 1 Flashcards
Four types of economic utility?
Possession utility, form utility, Place Utility, Time utility
Systems Approach
This is the Theory that everything is integrated together through logistics. You may ship via train which is cheaper, but packing is more expensive so all together it may be costing more
Cost trade offs
changes to one activity may cause some costs to increase and some to decrease
Total Logistics Concept
integration of all activities into a unified whole that seeks to minimize distribution costs in a manner that supports an organization’s customer service objectives
Inventory valuation
Allows a company to come up with an amount of money their inventory is worth
Stock keeping unit
product and service identification code for a store or product, often displayed as a machine-readable bar code that helps track the item for inventory
Landed cost
This is the total cost of a shipment after factoring in purchase price, shipping costs, insurance, etc.
Transaction processing system
collects and stores information about transactions
ex. Electronic data interchange (EDI)
Drawbacks of EDI
High setup costs, Reduced lead times
RFID
Compared to bar codes: can store much more data. offers both read and write capabilities
Logistics information system definition
the people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to logistics decision makers
Management Information System (MIS) and Executive Information System (EIS)
Convert TPS data into information for monitoring performance and managing an organization. Objective is to provide managers and executives the information they really need.
Decision support systems
Help managers make decisions by providing information, models, or analysis tools
DSS (Simulation)
Technique that models a real-world system, typically using mathematical equations to represent the relationships among the system’s components
DSS (Application specific software)
Technique developed to help managers deal with specific logistics processes or activities
3 stratagies that can be pursued by an organization
Cost Leadership, Differation, and focus
Logistic strategy decisions
Determining number and location of warehouses
Deploying inventory
Selecting Transportation modes
Investments in technology that support logistics
Marketing decisions
Product availability, desired customer service levels, and packaging design directly influence logistics decisions
Finance decisions
Rates of return may affect the decision to manage one’s own warehouse or use a third-party provider
Manufacturing decisions
Strategic decisions by manufacturing to implement just-in-time system would influence logistics decisions in warehousing, transportation and inventory management
Procurement
The decision to move from domestic to global sourcing would naturally affect logistics activities such as the potential use of new modes of transportation
Strategic profit model: Return on investment, Return on net worth, Return on Assets
ROI: common measure of a companies financial success
RONW: measures profitability of funds invested in the business
ROA: Indicates what percentage of every dollar invested in the business is ultimately returned to the organization as profit
Strategic Profit model fails to:
Consider the timing of cash flows
assets dedicated to specific relationships
What is usually the most relevant logistics asset?
Inventory
Balance Scorecard definition
is a strategic planning and performance management system used in industry, government, and nonprofit organizations. (forces managers to look beyond traditional financial measures)
four perspectives a manager should evaluate their business from?
Customers, Internal business process, Learning and growth, financial results
Two basic organizational structures?
Fragmented organizational structure and Unified organizational structure
Two basic organizational structure for LOGISTICS DEPARTMENTS:
Centralized logistics and decentralized logistics
Fragmented vs Unified Organizational structure
Fragmented: Logistics activities are managed in multiple departments throughout organization
Unified organizational structure: Multiple logistics programs are put together and ran as a single department
Centralized logistics vs decentralized
Centralized logistics: Company maintains a single logistics department that administers the related activities for the entire company from the home office
Decentralized logistics: Logistics-related decisions are made separately at the divisional or product group level and often in different geographic regions
Three primary types of organizational design
Hiearchial, top down management
Matrix - Cross functional responsibilities
Network - Process focused on combining tasks into value by making products and activites
Relevancy
Refers to meeting the customer needs of current and emerging customers. This is done by creating mutually beneficial relationships with customers
Responsiveness
Reflects the degree in which organizations can meet the needs of unique or unplanned customer requests
Flexibility
Is an organization’s ability to address unexpected operational situations
5 managerial issues in logistics
Productivity, Quality, Risk, Sustainability and complexity
Productivity
Refers to output/input. Provides insight into efficiency
Quality
Relates to a firm’s ability to deliver products, material and services without defects or errors to both internal and external customers1
ISO 9000
Is a set of generic standards used to document, implement, and demonstrate quality management and assurance systems (it is a certification)
What kind of risk is theft?
An operational risk
Pilferage
This is employee theft. Good way to prevent this is to keep goods moving through the system.
Reverse logistics
This is the process of managing returned goods. Can be 4-5 times more expensive and can also take up to 12 more steps as forward logistics
Network complexity
Is the growing number of nodes and the associated changes to the links in logistics systems
Process complexity
Centers on the haphazard development of processes, additions and modifications to processes over time, and/or changing process requirements
Range complexity
Centers on the implications associated with the increasing number of products that most companies continue to face in an effort to differentiate themselves with their customers
Two prominent SCM models?
Supply chain operations reference - is focused on the logistics, operations, and procurement functions
Global supply chain forum - involves all business functions
Agile supply chain
Since customers wants and needs can change quickly, it is important to be agile
Traditional supply chains vs Customer centric supply chains
Traditional supply chains are factory driven and push oriented. Customer centric supply chains are pull oriented
Perfect order
Simultaneous achievement of relevant customer metrics such as on-time delivery, damage free and correct order quantity. Looks at orders from the customers perspective
Leagility
A hybrid between lean and agile supply chains. Focus part of one supply chain on timely response and another part on leveling out planning requirements to smooth production output
Lean supply chains
Making sure to reduce waste and resources while maintaining operational functions. ex. moving from start and stop patterns to a continuous flow
4PL
Refers to a company whose primary purpose is to ensure that various 3PLs are working toward the relevant supply chain goals and objectives
