Logisti cs & supply chain management
Chapter one: What is logistics & Scm
What is logistics
1) What is logistics
Log involves getting
The right product
In the right way
In the right quantity and right quality
In the right place at the right time
For the right place at the right time
For the right customer at the right cost
2) Logistics is
The process of planning, implementing, and controlling procedures for the efficient and effective
transportation and storage of goods including services, and related information from the point of origin to the
point of consumption for the purpose of conforming to customer requirements.
3) What is logistics management?
• Logistics management is primarly concerned with optimizing flows within the organization
• The mission of logistics management is to serve the customer in the most cost-effective way
• More than “trucks and sheds” / “wheels and walls” alone
What is SCM
1) What is a supply chain?
A supply chain= is a system of organizations, people, activities, information and resources involved in moving a
product or service from supplier to customer. Supply chain activities transform natural resources, raw materials
and components into a finished product that is delivered to the end customer.
A supply chain= is a network of connected and interdependent organizations mutually and co-operatively
working together to control, manage and improve the flow of materials, resources (money + people +
equipment) and information from suppliers to end users.
2) Supply chain management
SCM is the management of a network of relationships within a firm and between interdependent
organizations and business units consisting of material suppliers, purchasing, production facilities, logistics,
marketing, and related systems that facilitate the forward and reverse flow of materials, services, finances
and information from the original producer to final customer with the benefits of adding value, maximizing
profitability through efficiencies and achieving customer satifaction.
End-to-end perspective:
1
,Supply chain views
Supply view = PUSH
Supply view = PULL
Distinguishing logistics and scm
See slide.
The total picture – SCOR model
• Main SC processes according SCOR?
- Source
- Plan
- Make
- Deliver
- Return
• Focal areas of this course
- We will use this model throughout the course to keep the overview
The evolution of logistics and scm
Six key developments triggered the evolution:
Shift to transporting higher value goods
Falling product/material prices
Deregulation of transport
Productivity improvements
Emphasis on inventory reduction
Changes in company structure
Chapter two: International Trade & Globalization
Growth in international trade
In recent decades, there has been considerable growth in world trade
2
,Facilitated by:
- Reduction in trade barriers between countries and regions
(Regional) trade agreements (EU, NAFTA,…)
- Emergence of institutions such as WTO, IMF, World Bank, UNCTAD
- ‘Tourism products’
- Technology advancements, e.g. containerization (see later)
Hence more freight is moving all around the world
Logistics systems => an increasingly important role in the global economy
Last few hundred years: greater openness and liberalized trade
However: Protectionism has always immersed
Advanced nations are realizing that economic growth and stability depend on a strategic mix of trade policies,
meaning both free trade & protectionism
Important conclusions:
• Global trade heavily concentrated in a few countries
• Leading exporters = leading importers
• Leaders are often Western industrialized countries.
• Growing importance of China and the Far East in general
• Japan, South Korea, Hong Kong
• South America: Only Mexico and Brazil in top 30
• Africa not in top 30
• US import value very large in comparison with other countries
o trade deficit!
Containers: the humble hero
It is said that the advent of containers (as of 1956) has been more of a driver of globalization than all trade
agreements in the past 50 years taken together.
Contributions of containers:
- Quicker
- Safer
- More cost-effective
Shipping containers carry +-16% of volume of seaborne trade, but they carry over 50% of the world’s seaborne
trade in terms of value.
TEU: twenty-foot equivalent unit (Dimension of standard container)
Measuring logistics performance
The global logistics performance index (LPI) ranks 160 countries’ logistics performance against six key
dimensions:
3
, 1. Customs
2. Infrastructure
3. International shipments
4. Logistics competence
5. Tracking & tracing
6. Timeliness
Globalization
Some definitions:
The transformation of national economies into an interdependent, integrated global economic system.
Globalization allow firms to view the market as an integrated marketplace that includes buyers, producers,
suppliers and governments in different countries.
Different stages in terms of trading relationships in the path towards globalization
1) Countries begin to trade with each other, importing and exporting
2) Establishment of presence in overseas markets
FDI = foreign direct investment. Financial flows from a company in one country to invest in another country.
Belgian status
• In 2021, Belgium’s has the 10th position on the list of world merchandise exporters (in millions of $) /
18th position in 2019
• Having the 5th place in Europe (behind France, above UK)
• In 2021, Belgium was the 12th world merchandise importer / 13th position in 2019
• Our country ranked behind Canada but preceded Mexico
Why does Belgium have an open economy?
• Central location
• High population density
• Scarcity of natural resources
• Centre of Belgian economy =
processing foreign goods (adding value) and export them
Belgium is a gateway to Europe
• In the middle of the political and economical center of the European Union
• Hardly any trade restrictions
• Ideal location to reach more than 500 million of the wealthiest people in the world
• Close to world cities like Paris and London
Belgium is a gateway to the world
Belgium had qualitative infrastructure
• Third most dense motorway network in Europe
(at least if your’re not stuck in any congestion)
• Second most dense railway transportation network in Europe
4
Chapter one: What is logistics & Scm
What is logistics
1) What is logistics
Log involves getting
The right product
In the right way
In the right quantity and right quality
In the right place at the right time
For the right place at the right time
For the right customer at the right cost
2) Logistics is
The process of planning, implementing, and controlling procedures for the efficient and effective
transportation and storage of goods including services, and related information from the point of origin to the
point of consumption for the purpose of conforming to customer requirements.
3) What is logistics management?
• Logistics management is primarly concerned with optimizing flows within the organization
• The mission of logistics management is to serve the customer in the most cost-effective way
• More than “trucks and sheds” / “wheels and walls” alone
What is SCM
1) What is a supply chain?
A supply chain= is a system of organizations, people, activities, information and resources involved in moving a
product or service from supplier to customer. Supply chain activities transform natural resources, raw materials
and components into a finished product that is delivered to the end customer.
A supply chain= is a network of connected and interdependent organizations mutually and co-operatively
working together to control, manage and improve the flow of materials, resources (money + people +
equipment) and information from suppliers to end users.
2) Supply chain management
SCM is the management of a network of relationships within a firm and between interdependent
organizations and business units consisting of material suppliers, purchasing, production facilities, logistics,
marketing, and related systems that facilitate the forward and reverse flow of materials, services, finances
and information from the original producer to final customer with the benefits of adding value, maximizing
profitability through efficiencies and achieving customer satifaction.
End-to-end perspective:
1
,Supply chain views
Supply view = PUSH
Supply view = PULL
Distinguishing logistics and scm
See slide.
The total picture – SCOR model
• Main SC processes according SCOR?
- Source
- Plan
- Make
- Deliver
- Return
• Focal areas of this course
- We will use this model throughout the course to keep the overview
The evolution of logistics and scm
Six key developments triggered the evolution:
Shift to transporting higher value goods
Falling product/material prices
Deregulation of transport
Productivity improvements
Emphasis on inventory reduction
Changes in company structure
Chapter two: International Trade & Globalization
Growth in international trade
In recent decades, there has been considerable growth in world trade
2
,Facilitated by:
- Reduction in trade barriers between countries and regions
(Regional) trade agreements (EU, NAFTA,…)
- Emergence of institutions such as WTO, IMF, World Bank, UNCTAD
- ‘Tourism products’
- Technology advancements, e.g. containerization (see later)
Hence more freight is moving all around the world
Logistics systems => an increasingly important role in the global economy
Last few hundred years: greater openness and liberalized trade
However: Protectionism has always immersed
Advanced nations are realizing that economic growth and stability depend on a strategic mix of trade policies,
meaning both free trade & protectionism
Important conclusions:
• Global trade heavily concentrated in a few countries
• Leading exporters = leading importers
• Leaders are often Western industrialized countries.
• Growing importance of China and the Far East in general
• Japan, South Korea, Hong Kong
• South America: Only Mexico and Brazil in top 30
• Africa not in top 30
• US import value very large in comparison with other countries
o trade deficit!
Containers: the humble hero
It is said that the advent of containers (as of 1956) has been more of a driver of globalization than all trade
agreements in the past 50 years taken together.
Contributions of containers:
- Quicker
- Safer
- More cost-effective
Shipping containers carry +-16% of volume of seaborne trade, but they carry over 50% of the world’s seaborne
trade in terms of value.
TEU: twenty-foot equivalent unit (Dimension of standard container)
Measuring logistics performance
The global logistics performance index (LPI) ranks 160 countries’ logistics performance against six key
dimensions:
3
, 1. Customs
2. Infrastructure
3. International shipments
4. Logistics competence
5. Tracking & tracing
6. Timeliness
Globalization
Some definitions:
The transformation of national economies into an interdependent, integrated global economic system.
Globalization allow firms to view the market as an integrated marketplace that includes buyers, producers,
suppliers and governments in different countries.
Different stages in terms of trading relationships in the path towards globalization
1) Countries begin to trade with each other, importing and exporting
2) Establishment of presence in overseas markets
FDI = foreign direct investment. Financial flows from a company in one country to invest in another country.
Belgian status
• In 2021, Belgium’s has the 10th position on the list of world merchandise exporters (in millions of $) /
18th position in 2019
• Having the 5th place in Europe (behind France, above UK)
• In 2021, Belgium was the 12th world merchandise importer / 13th position in 2019
• Our country ranked behind Canada but preceded Mexico
Why does Belgium have an open economy?
• Central location
• High population density
• Scarcity of natural resources
• Centre of Belgian economy =
processing foreign goods (adding value) and export them
Belgium is a gateway to Europe
• In the middle of the political and economical center of the European Union
• Hardly any trade restrictions
• Ideal location to reach more than 500 million of the wealthiest people in the world
• Close to world cities like Paris and London
Belgium is a gateway to the world
Belgium had qualitative infrastructure
• Third most dense motorway network in Europe
(at least if your’re not stuck in any congestion)
• Second most dense railway transportation network in Europe
4
