Operations Management of

Logistics and Supply Chain: Issues and Directions

Xiang Li. (2014). Operations Management of Logistics and Supply Chain: Issues and Directions.
Discrete Dynamics in Nature and Society, Volume 2014, ID 701938, 7 pages

Anurag Gupta
Under the guidance of: Prof. M. Mathirajan
 Table of Contents

1. Definitions
2. Difference Between Logistics and Supply Chain Management
3. Issues in Inventory and Transportation Management
4. Issues in Sourcing
5. Issues in Marketing
6. Issues in Green Logistics
7. Issues in Behaviour Operations
8. Future Directions
 1. Definitions
Operations Management

Operations Management is the set of activities or processes that

create goods and services through the transformation of inputs into
outputs. Example: Education system.
 Logistics

The commercial activity of transporting goods to customers

(material handling, production, packaging, transportation).
The process of planning, implementing and controlling the
efficient, effective flow and storage of goods, services and
related information from origin to consumption- point.

Example: Water bottles, IT industry.

Destination: Customers or Corporations.
Items: Physical (food, equipment, liquids)
or abstract (information, energy).
 Supply Chain Management

Supply chain management is a set of approaches utilized to efficiently integrate:

Suppliers
Manufacturers
Warehouses
And Stores
2. Difference Between Logistics and Supply Chain
Management
Logistics Management Supply Chain
Management
Meaning The commercial activity Approach to integrate
of transporting goods to supplier, manufacturers,
customers. warehouses and stores.
Objective Customer Satisfaction. Competitive Advantage.
Number of organizations Single. Multiple.
involved
One in another Subset. Superset.
 3. Issues in Inventory and Transportation Management

A. Management of Perishable Products:-

Types of perishable losses-

Quantity loss
Quality loss

Producer (fresh product) Distributor (issue to

maintain freshness) Consumer (receive only fresh)

Example- Fashion goods, fish.

B. Intermodal transportation:-

Issues in selecting best shipments through the international

Network (heuristics model).
Timely delivery through multimodal transportation
(AHP multimodal flow).
Cost effective delivery (load planning).

Complex intermodal transport problems (hybrid approach with AI methods).

 4. Issues in Sourcing
Sourcing: the first step of supply chain.
Opportunity for supplier to improve efficiency.
Knowledge and experience from learning causing negotiations.
Auctioning: issue in sourcing strategy.

Single buyer and multiple sellers.

Single seller and multiple buyers.
Confidential or shared knowledge of actual production costs.
Profit optimization depending on contract schemes and profit- sharing (IBM).

Issue with uncertain volume (short- term supplier switching).

 5. Issues in Marketing

Intergenerational product transition: Deriving optimal prices for old and new. (Samsung- heuristic method).
Issue with uncertain market (heterogeneous customers).
Accurate demand information (higher price- risk).
Competition with two complementary products (supporting products together).
Substitutes: Advertiser bears the costs (Gillette).

Seasonal discounts.
Goal: to reduce inventory holding costs, increasing profits.

Online sales and bricks- and- mortar (dual channel strategies).

Strategy: selling same product with multiple online retailers at heterogeneous prices.
Comparing dynamic pricing with the centralised solutions.
 6. Issues in Green Logistics

Green storage, green packaging, green transport.

Aim: to reduce environmental pollution (sustainable management).
Loss of employees, if not green.

Reverse logistics (closed- loop): reverse flow of used products.

Issue in remanufacturing the returned products.
Issue in creating separate manufacturing processes, for used products (clothes industry).
Issue in quality uncertainty of acquired used product.
Identical manufacturing and remanufacturing time: same optimal costs (glass industry).
 Issues in Green Logistics

Obstacle in green recovery strategy: uncertainty in returns and demands.

Issue: different qualities of returned products (treat differently).

To reduce remanufacturing costs: remanufacturing returned products with better quality.

Heterogeneous acquisition prices of returned products.
Heterogeneous selling prices of remanufactured products.
 7. Issues in Behaviour Operations

Decisions under the consumers behaviour.

Aim: to gain competitive edge and profit.
Customers behaviour types: risk averse, regretful and strategic.

Hierarchical structures:
Brand- primary model (brand and then type of product)
Type- primary model (type and then brand) V-neck T-shirt.

Issue in scarcity strategy: high demand variability.

Lower profit, if strategic customers are present.
Loss due to strategic customer behaviour can be less, with two product variants compared to single-
benchmark product.
 8. Future Directions

Logistics:
Traditional Research- Perishable and fashion products with short life cycle.
Future Directions- City logistics, emergency logistics and agricultural supply chain.

Development of Economy and Technology:

Traditional Research- Research on E- Business and Distributed Channel Choice.
Future Directions- Research on RFID, Cloud Techniques and Big data.
 Future Directions

Environmental Study:
Countries investing in green logistics, by creating technical competition.
Research on implementation of plans and strategies for green development.

Multimethodology:
Traditional Research- Modelling, Simulations, Cases and Surveys.
Future Directions- Combining multiple research methodologies

(Research on establishing models with real- world cases and

papers exploring real- world with theoretical models).