3/23/2010

Course framework

E‐Logistics International SCM
E-Logistics & International
• Fundamentals of Logistics and Supply Chain Management
Supply Chain Management
• Supply Chain Integration  • Global supply chain/logistics 
and e Logistics
and e‐Logistics management
BUSI 1150 / 1024
• E‐procurement • Lean and agile supply chain 
• E‐fullfilment strategy
• Logistics visibility and RFID • Green logistics and 
Dr Yong Lin • Bullwhip (Beer Game) sustainable supply chain
E‐mail: Y.Lin@gre.ac.uk • Emergency logistics and 
sustainable supply chain
2

1.  Logistics defined Key Logistics Activities
• Logistics is the management of the flow of goods,  Order
information and other resources, including energy and  Processing
people, between the point of origin and the point of 
consumption in order to meet the requirements of consumers 
Facility
(frequently and originally military organizations)
(frequently, and originally, military organizations).  Network
Inventory

• Logistics is the design and administration of systems to 
control movement and geographical positioning of raw  Warehousing
materials, work‐in‐process, and finished inventories at the  Material Handling Transportation
lowest total cost.  Packaging
(Donald J. Bowersox, David J. Closs, David Closs, M. Bixby Cooper, 2009, Supply Chain 
Logistics Management, 3/e, McGraw‐Hill College)
3 4
Donald J. Bowersox, David J. Closs, David Closs, M. Bixby Cooper, 2009, Supply Chain Logistics Management, 3/e, McGraw-Hill College.

The scope of integrated logistical  1) Inventory flow
operations
• Managers must be concerned 
with the movement and storage 
of inventory in 3 major forms
– Materials
– Work‐in‐process
– Finished products
Fi i h d d t
• Logistical operations should add 
value by moving inventory when 
and where needed
– Materials and components gain 
value at each step of their 
transformation into finished 
inventory
Logistical Integration

5 6
Donald J. Bowersox, David J. Closs, David Closs, M. Bixby Cooper, 2009, Supply Chain Logistics Management, 3/e, McGraw-Hill College.

1
 3/23/2010

2) Information flow 2. Supply Chain & SC Management
• Information flow identifies specific  • Supply‐
Supply‐chain is a term that describes how organizations 
locations within a logistical system  (suppliers, manufacturers, distributors, and customers) are 
that have requirements linked together.
– Information also integrates the three 
operating areas
• Information
Information facilitates coordination 
facilitates coordination Tier 3 to Tier 3 to
of planning and control of day‐to‐day  Initial
suppliers
Tier 2
Suppliers
Tier 1
Suppliers
Tier 1
Customers
Tier 2
Customers
Consumers/
End-Customers

operations 1 1
2 2
• Logistical information has two major 

Tier 3 to n suppliers

Consumers / End-Customers
n 1 1 n
components 1

Initial Suppliers
1

Tier 3 to n customers
n 2 2
– Planning / coordination information 1 n
2 3 n
– Operational information needed to  3
1
2
complete work n n n
1

n
7 8
Focal Company Members of the Focal Company’s Supply Chain

Logistics vs. Supply Chain Supply Chain Strategy
Efficient vs. Responsive Supply Chain
• Logistics management is that part of supply chain
Efficient  Responsive 
management that plans, implements, and controls the Primary purpose Supply predictable demand at low  Response quickly to unpredictable 
efficient, effective forward and reverse flow and storage of cost demand to minimize stock‐outs, etc.
goods, services, and related information between the point of Manufacturing  High utilization Deploy excess buffer capacity
focus
origin
g and the p point of consumption
p in order to meet
Inventory strategy High turns, minimize inventory in  Deploy significant buffer stocks of 
customers' requirements. supply chain parts or finished goods
Lead time focus Shorten lead time as long as it  Aggressively reduce lead times
doesn’t  increase costs
Approach to  Select primarily for cost and  Select for speed, flexibility, and 
choose suppliers quality quality
Product design  Maximize performance, minimize  Use modular design into
strategy costs postponement product 
differentiation as long as possible

Marshall L. Fisher, “What is the Right Supply Chain for Your Product?” Harvard Business Review, March-April 1997, p. 107.
9 10

3.  e‐business strategy Objectives of e‐business
• Be based on assessment of internal and external  • Cost reduction in purchasing or selling through less 
environment human involvement and lower resource costs.
• Have clearly defined objectives backed up by vision • Increased efficiency enabling faster cycle times for 
• Have strategies, tactics and implementation that 
Have strategies, tactics and implementation that purchasing or sale of goods.
select the best techniques to achieve these strategies • Capability to sell to overseas markets or previously 
• Have monitoring and control that assess whether the  untargeted markets
objectives are being achieved and a feedback loop to 
ensure corrective action occurs.
• Match with the corporate strategy

11 12

2
 3/23/2010

e‐Logistics e‐logistics and traditional logistics
• e‐Commerce logistics, or e‐Logistics, therefore, is  • The major difference:
applying the concepts of logistics via the Internet in  – Volume
order to conduct those aspects of business  • Traditional logistics deals with the movement of large amounts of 
materials to a few destinations, such as to retail stores.
electronically.  
• e‐logistics shipments typically are small parcels sent to many 
e‐logistics shipments typically are small parcels sent to many
customers’ homes.
– Objective
• Traditional logistics: Efficient‐Cost
• e‐logistics:                  Speed‐Cost
– Information
• Traditional logistics: Fax, Paperwork, MIS
• e‐logistics:                  Internet, EDI, RFID, Integrated IS
13 14

4. e‐Procurement model Why resist to e‐Procurement
• There is conservatism within purchasing departments, 
perhaps to avoid redundancies or redeployment.
• Suppliers may often not want to move to e‐procurement since 
approaches such as auctions lead to reduced prices.
• There are internal procurement systems from several different 
There are internal procurement systems from several different
vendors, so may not be compatible.
• There may be technical difficulties in integrating internal 
systems with several different external systems.

15 16

Elements of an e‐procurement system 5.  Supply chain visibility & RFID
• Originator request and 
selection (integration with 
catalogue systems)
• Manager authorization

• Buyer placing order

• On delivery warehouse 
reconciling order and delivery 
(integration with account and 
warehouse systems)
• Payment (integration with 
accounting applications)
Visibility is the seamless flow of information that starts and ends with the consumer.
17

3
 3/23/2010

Bullwhip Effect Benefits of applying Information System 
to SCM
• Increased efficiency of individual processes 
– Benefit: reduced cycle time and cost per order 
• Reduced complexity of the supply chain 
– Benefit: reduced cost of channel distribution and sale 
• Improved
Improved data integration
data integration between elements of the supply 
between elements of the supply
chain 
– Benefit: reduced cost of paper processing 
Occurs when • Reduced cost through outsourcing 
slight demand
variability is – Benefits: lower costs through price competition and reduced spend on 
magnified as manufacturing capacity and holding capacity. 
information
moves back • Innovation
upstream – Benefit: better customer responsiveness. 
19 20

RFID: Radio Frequency IDentification  Applications, Benefits, and Challenges 
• …the use of small “tags” on products that can receive  • RFID is useful for tracking products throughout the 
and transmit radio signals for the purpose of  supply chain.
electronically identifying the product and certain  – Active RFID can be used to locate products within the 
characteristics about that  product from  distance. broad area of a plant, warehouse, or retail store.  
– Passive RFID can be used to track the movement of 
products through specific gateways such as off the end of 
an assembly line, through a building door or a truck dock 
door.  
– RFID can read a mixed group of products as it moves 
through the gateway making it much easier to record the 
movement of mixed pallets or loads of product. 

21 22

Applications, Benefits, and Challenges  6. International Supply Chains
• The primary RFID benefits include accuracy, speed of  • International distribution systems
– Manufacturing still occurs domestically, but distribution and typically 
read, ability to read multiple products at a single  some marketing take place overseas.
time, and consistency.   • International suppliers
• This combination of benefits should result in lower  – Raw materials and components are furnished by foreign suppliers
– Final assembly is performed domestically. 
i l bl i f dd i ll
operating costs and less need for buffer inventory.   – In some cases, the final product is then shipped to foreign markets.
• Offshore manufacturing
• The major challenges include, – Product is typically sourced and manufactured in a single foreign 
location
– the fixed cost of making facilities RFID compliant, variable 
– Shipped back to domestic warehouses for sale and distribution
cost of adding the RFID tag to the product, read reliability 
• Fully integrated global supply chain
for some products (liquids and metals), and defining 
– Products are supplied, manufactured, and distributed from various 
consistent standards. facilities located throughout the world. 
23

4
 3/23/2010

7. Global Logistics vs. domestic 
Global Logistics vs. domestic Logistics
Logistics
• Demand, Distance, Diversity, and Documentation  (1) • Demand, Distance, Diversity, and Documentation  (2)
– Global logistics operations typically imply increased demand as the  – Global logistics operations increases product diversity as the product 
enterprise is attempting to serve a broader range of markets around  technical and language characteristics must be customized for each 
the world.  This makes is more difficult to manage capacity as demand  country or market segment.  This requires more production 
swings are often but not always more significant particularly for  changeovers and reduces the ability to shift products between 
seasonal products
seasonal products.   markets.  
markets
– Finally, global logistics increases the need for specific documentation
– Global logistics operations significantly increases distances that goods  for customs, insurance, and financial transfers. Many documents must 
must travel resulted in extended transit times and often increased  be completed, often in the language of the local country which are 
variation as product gets held up by weather and customs.   necessary to get the product through customs.  Typically, if the 
documents are not absolutely correct, the product will be held at 
customs.

25 26

Global Logistics Mapping 8. Lean vs. Agile Logistics/SC
Inland Ocean US Inland Inventory holding
transportation cost transportation cost transportation cost cost (cost of capital)

Packing cost Marine insurance Warehouse cost Administrative cost

Original Wire Cost of hedging

(Michigan)
Seattle
Autolink
A t li k
Shanghai Detroit
HLA
(Guangdong  US port handling cost
Unit cost China) Freight
Customs duty
Tooling cost forward fee
Customs broker fees

28

Aristocrat’s new global supply chain 9.  Green Logistics vs. Reverse 
Artwork
Local 
supplier
Logistics
Currency 
validator
Local 
supplier
Agile • Reverse Logistics refers to all efforts to move goods 
Printer
Local 
from their typical place disposal in order to recapture 
supplier London  European 
Power  Global  OFC customers value.
supply supplier Local 
Software
supplier Local 
supplier

Local 
Global 
Door
supplier
supplier
Macau  Macau 
customers
• Green Logistics refers to minimizing the ecological 
OFC

Trim
Global 
3PL 
Local 
supplier
impact of logistics, for example, reducing energy 
supplier
usage of logistics activities and reducing usage of 
Local 
supplier

Las Vegas  Las Vegas  American

LCD
Global 
supplier
Hub
Local 
IC customers
materials.
supplier
Lean Local 
supplier
Wiring  Global 
Asia
Reverse Green
looms supplier Sydney Sydney
Hub IC customers Logistics Logistics
Low‐cost 
economies
29 30

5
 3/23/2010

10. Service Supply Chain Dual‐directional nature of SSC
Service Service‐oriented
Focused
Physical Products
high
Suppliers

Service industry  Servitised
Service 
Service Suppliers Service provider Customer
supply chain supply chain Supply Chain

Figure.3 Service Supply Chain

Manufacturing‐oriented

Product … Supplier Manufacturer Distributor Retailer Customers

low General
Supply chain (Factory) Supply chain
Product Figure.4 Traditional Supply Chain
Focused
low high

Product-Service Matrix for classification of service supply chain

31 32

Modular supply network Course Assessment
Weight towards Return
Assessment Title Pass Mark Length Due Date
Complexity Level of
final grade Date
FIM supplier 3PL provider Automaker
structure process information Modularity Coursework: Article 23.04.10
Seat Module
30% 50% 1000 07.05.10
(a) Review (Essay) 11:59PM
5 (a) overall
PIM supplier 3PL provider Automaker
3-Hrs Examination 70% ?.05.10
Air‐
conditioner  (b)
4 (b)
Module
• Coursework 1: Article Review (Essay)
PIM supplier 3PL provider Automaker
Instrument  3
(c)
– 1000 words. Overview of e‐logistics. The main purpose is to identify
Panel   (c)
Module
Sub‐assembly 
why e‐logistics emerges, to distinguish e‐logistics and 
(d)
PIM supplier 3PL provider 2
supplier Automaker
traditional logistics, to clarify the benefits and challenges of e‐
Tire Module (d)
1 logistics. The essay should have enough evidences (cases or journal 
(i) (ii)
paper (5)) to support the arguments. 
Sub‐assembly
• 3‐Hrs Examination
– Section A: Case study: 2 questions
Figure 3. Patterns of modular supply network – Section B: Questions: 4 of 6
33 34

Exam May 2010
• Answer SIX questions in total.  
– Answer questions 1 – 2 in Section A (case study), which are 
compulsory, each question is worth 20 marks.  
– Also answer FOUR questions from Section B (short 
question).  Each question is worth 15 marks.
ti ) E h ti i th 15 k

• This is a CLOSED book examination.

35