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• Hermes Alejandro Muñoz Oviedo

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JAMES R. STOCK



STRATEGIC LOGISTICS MANAGEMENT

DOUGLAS M. LAMBERT

FOURTH EDITION

McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

CHAPTER 1 Logistics’ Role in the Economy and the Organization

Logistics Management Defined

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That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers’ requirements. Council of Logistics Management

McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Components of Logistics Management Inputs into logistics Natural resources

Human resources Suppliers Financial resources Information resources

McGraw-Hill/Irwin

Outputs of logistics

Management actions Planning

Implementation

Logistics management Raw In-process materials inventory

Finished goods

Control

Competitive advantage

Time and Customers place utility

Logistics activities Customer service Demand forecasting Inventory management Logistics communications Material handling Order processing Parts and service support

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Plant & warehouse site selection Procurement Packaging Reverse logistics Traffic and transportation Warehousing and storage

Efficient movement to customer Proprietary asset Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Marketing/Logistics Management Concept

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Customer satisfaction •Suppliers •Intermediate customers •Final customers

Integrated effort •Product •Price •Promotion •Place (distribution)

McGraw-Hill/Irwin

Company profit

•Maximize long-term profitability •Lowest total costs given an acceptable level of customer service

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Cost Trade-offs in Marketing and Logistics

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Order processing and information costs

Price

MARKETING

Product

Place/customer service levels Inventory carrying costs

Transportation costs

Lot quantity costs

Warehousing costs Order processing and information costs

McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Relationship of Logistics Activities to Logistics Costs • • • • • •

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Customer service levels Transportation costs Warehousing costs Order processing/information systems costs Lot quantity costs Inventory carrying costs

McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Key Logistics Activities • Customer service • Demand forecasting • Inventory management • Logistics communications • Material handling • Order processing • Packaging

McGraw-Hill/Irwin

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• Parts and service support • Plant and warehouse site selection • Procurement • Reverse logistics • Traffic and transportation • Warehousing and storage Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Flow through the Supply Chain

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Customer

Carrier Distribution center Supplier

Customer

Carrier

Customer Carrier Supplier

Carrier Manufacturing site

Customer

Carrier Supplier

Carrier

Customer

Distribution center Customer

McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Strategic Profit Model Gross margin Net profit Net profit margin

+

Financial leverage

=

Return on assets

x

%

Net profit Total assets x Net profit = Net worth Net worth Total assets

Net profit Net sales

Sales

Total expenses

x Asset turnover

Sales

Income taxes

$ Current assets

$

$ Fixed expenses

$

+

Accounts receivable

$ +

Fixed assets

$ McGraw-Hill/Irwin

Variable expenses

$

Total assets

$

Cost of goods sold

Inventory

$ +

Net sales Total assets

-

+

$

$

$

$

$

% Return on net worth

$

Sales 1-10

+

Other current assets

$

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Future Challenges and Areas for Performance Improvement • • • • • • •

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Supply Chain Management Strategic Planning Total Quality Management Just-in-Time Quick Response Efficient Consumer Response Logistics as a Competitive Weapon

McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Future Challenges and Areas for Performance Improvement (cont.)

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• • • • • •

Accounting for logistics costs Logistics as a boundary-spanning activity Global logistics Increasing skill requirements Logistics information systems Strategic alliances, partnerships, and outsourcing • Green marketing and reverse logistics McGraw-Hill/Irwin

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.