Class 1
Chapter 1
Logistics is the process of strategically managing the procurement, movement and storage
of materials, parts and finished inventory (and the related information flows) through the
organization and its marketing channels in such a way that current and future profitability are
maximized through the cost-effective fulfilment of orders.
Supply chain management is the management of upstream and downstream relationships
with suppliers and customers in order to deliver superior customer value at less cost to the
supply chain as a whole. The focus of supply chain management is collaboration and
synergy.
The supply chain can be global. In modern times, it is often a value network of
manufacturing, warehousing and transport.
From a functional perspective, the main operational processes are “source”, “make”
and “deliver”.
,Example: the value web of Boeing Dreamliner
The challenge of supply chain management is the seeking of a sustainable and defensive
competitive advantage. That can be separated into a value differential (an unique value
proposition) and/or cost differential.
All costs decrease as the volume increases. Value can be created by segmenting benefits
and/or service.
Asides from handling changes in volume, logistics and supply chain management can also
increase efficiency and productivity, which leads to reduced costs.
,The twin peaks of excellence are both cost leadership and service leadership. If it is not
outsourcing, a firm gains competitive advantage by performing these strategically important
activities more cheaply or better than competitors.
Gaining competitive advantage:
, Primary and support activities in the value chain:
The mission of logistics management is to plan and coordinate all activities to achieve
desired levels of service, quality and costs.
The scope of logistics spans the entire organisation, from the management of raw
materials through to the delivery of the final product.
The service and the performance to the market will be more and more important (on top of a
good product, which is a prerequisite). Integration can make this happen.
Chapter 1
Logistics is the process of strategically managing the procurement, movement and storage
of materials, parts and finished inventory (and the related information flows) through the
organization and its marketing channels in such a way that current and future profitability are
maximized through the cost-effective fulfilment of orders.
Supply chain management is the management of upstream and downstream relationships
with suppliers and customers in order to deliver superior customer value at less cost to the
supply chain as a whole. The focus of supply chain management is collaboration and
synergy.
The supply chain can be global. In modern times, it is often a value network of
manufacturing, warehousing and transport.
From a functional perspective, the main operational processes are “source”, “make”
and “deliver”.
,Example: the value web of Boeing Dreamliner
The challenge of supply chain management is the seeking of a sustainable and defensive
competitive advantage. That can be separated into a value differential (an unique value
proposition) and/or cost differential.
All costs decrease as the volume increases. Value can be created by segmenting benefits
and/or service.
Asides from handling changes in volume, logistics and supply chain management can also
increase efficiency and productivity, which leads to reduced costs.
,The twin peaks of excellence are both cost leadership and service leadership. If it is not
outsourcing, a firm gains competitive advantage by performing these strategically important
activities more cheaply or better than competitors.
Gaining competitive advantage:
, Primary and support activities in the value chain:
The mission of logistics management is to plan and coordinate all activities to achieve
desired levels of service, quality and costs.
The scope of logistics spans the entire organisation, from the management of raw
materials through to the delivery of the final product.
The service and the performance to the market will be more and more important (on top of a
good product, which is a prerequisite). Integration can make this happen.
