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Introduction to Logistics & Supply Chain Management:
When was the last time that you made a purchase at McDonald’s? You may have not put much thought as to where all of the ingredients came from that produced your sandwich. Depending on the restaurant’s location, McDonald’s sources its ingredients from both local and global suppliers. The challenge is to ensure that all restaurants in the McDonald’s network have enough ingredients to meet customer demand. This is the challenge for Logistics & Supply Chain Management. Here is a list of relavent topics that Logistics / Supply Chain Management operations encompass.
History of Logistics & Supply Chain Management:
Logistics has always been a critical part as one of the 4 P’s in Marketing: Product, Place, Price and Promotion. The “Place” component ensures the product is at the right place, at the right time, in the right quantity and the right quality. Read about how the logistics discipline started and where it is headed.
Logistics & Supply Chain Management Defined:
According to the Council of Supply Chain Management Professionals (CSCMP), a professional organization for Logistics and SCM professionals, logistics is defined as:
“the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of conforming to customer requirements”
Creating a Logistics Strategy:
It is a fallacy to assume that the best logistics strategy is to get the product from the supplier to the customer the fastest and always be in stock for all organizations. If this were true, most organizations would not be profitable today. The truth is, creating a logistics strategy is a balancing act which takes many variables into account. Here is a list of what needs to be answered before creating a logistics strategy.
Inventory Management:
Managing inventory in the supply chain is critical to ensure high customer service levels. However, it is also a very costly asset to maintain. Having the right amount of inventory to meet customer requirements is critical. Find out what inventory best practices reduce inventory costs across the supply chain.
Purchasing Practices:
In a typical organization, 80% of the purchasing transactions represent approximately 20% of the total dollars spent. Many organizations spend the same amount of money to process a $1,000 transaction as a $10,000 transaction. Here are four methodologies that may be deployed to reduce small value purchase transaction costs which involve consolidation and automation. Find out which approach will work best for you.
Risk Management in Supply Chain Operations:
As outsourcing of Logistics / SCM operations become more popular for firms, the management of risk will gain more importance. Variables such as fluctuating exchange rates, supply disruptions due to labor strikes and supplier bankruptcy may cause havoc on the supply chain. Implementing a solid risk management strategy will help reduce uncertainties.
13-04-2008, 10:19 AM
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