Responsive Electronic supply chain equipment High margin 2-2 The objectives of Logistics Strategy
• Minimize cost • Minimize investment • Maximize customer service
Use ROLA
3 An important objective in Logistics Strategy Maximize return on logistics assets (ROLA) Costs of Logistics’ logistics contribution operations to sales
ROLA RevenueCosts Assets Investment in logistics assets 4 Logistics Planning • Levels of logistics planning; • Strategic • Tactical • Operational • What to Plan; • Customer service levels • Facility location • Inventory decisions • Transportation Decisions
5 Strategic, Tactical, and Operational Decisions Decision area Strategic Tactical Operational Seasonal equip- Dispatching Transportation Mode selection ment leasing
Inventories Location, Control policies Safety stock levels Order filling
Order Order entry, transmittal, Processing
processing and processing system orders, Filling design back orders
Purchasing Development of supplier- Contracting, Expediting
buyer relations Forward buying
Warehousing Handling equipment Space utilization Order picking
selection, Layout design and restocking
Facility Number, size, and
location location of warehouses 2-7 Flow of Logistics Planning
7 The total logistics concept • System-wide management of entire logistics chain as a single entity instead of separate management of individual logistical functions. • Integrated Logistics a process of planning, coordinating and arranging the potential operational activities so as to optimize the productivity to ensure success. • With businesses today looking for better connectivity and collaboration in real-time, the concept of integrated and smarter logistics have shaped up in the recent times. The financial impact of logistics Challenges of Global Logistics • extended supply lead times; • production postponement with local added value; • complicated node management; • multiple freight transport options; • extended and unreliable transit times; and • the need for greater visibility in the supply chain.
