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Global operations: Supply chain management & GLobal logistic

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berna karsli

on 17 December 2014

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Transcript of Global operations: Supply chain management & GLobal logistic

Supply Chain Management & Logistics
Transport in Supply Chain Management
1. Introduction to Global Operations Management​, Supply Chain Management & Logistics -> Damla Arat
2. SCM Relationships -> Berna Kizilkayali
3. Transport in SCM -> Vanesa Dimitrova
4. Logistics Service Providers & Procurement-> Marco Estrada
5. Inventory Management in SCM-> Andrius Lubauskas
6. The role of information in the SCM-> Jose Mendez
7. Supply chain vulnerability –​risk management and resiliency ->Saskia Lara
What is Logistics?
”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 requirements. This definition includes inbound, outbound, internal, and external movements.” – Council of Supply Chain Management Professionals (CSCMP)
Seven “rights” of Logistics by E. G. Plowman

Right Product​
Right Quantity and right Quality​
Right Condition​
Right Place​
Right Time​
Right Customer​
Right Cost​

Activities in Logistics

Warehousing and Storage​
Industrial Packaging​
Materials Handling​
Inventory Control​
Customer Service
Transport in a Supply Chain
Obstacles for the transportation
Modes of transport
Each mode has different economic and technical structures, that can provide different qualities, depending on the types of goods, locations, distances, values.

For the distribution of different goods and services logistics use certain mode
Road carriers
Railroad carriers​
transport goods at lower price
efficient by moving larger quantities from one place to another
expensive equipment requirements
fixed costs are higher
Air carriers​
freight can be transport really fast​
limited amount and type of goods that the plane can transport​
high cost of air travel ​
limited capacity and flexibility
requires airport location​
Intermodal transportation​
Product Safety​
Inventory Management​
in Supply Chain
What is inventory?​
Quantities of goods/materials in stock​

It’s what firms hold to satisfy customer demand

Provides value and have financial cost​
Types of Inventory
Raw materials, work in process, finished goods

Cycle stock , safety stock, seasonal stock​

Maintenance, Repair and Operating Items​
Reasons for Holding Inventories
To meet expected demand​
To guard against shortages​
To benefit from discounts​
To facilitate the production process​
Hedge against price fluctuations​
Some processes require holding work in progress​
The importance of inventory management​

Helps in maintaining a trade-off between carrying costs and ordering costs which results into minimizing the total cost of inventory.​
Facilitates maintaining adequate inventory for smooth production and sales operations.​
Avoids stock out problem, that a firm otherwise would face in the lack of proper inventory management​
Suggests the proper inventory control system to be applied by a firm to avoid losses, damages and misuses. ​
Inventory Control Systems/Methods
Fixed order quantity approach​
Fixed time period​
Just In Time (JIT)​
Economic Order Quantity​
First in, first out​

Stock control systems - keeping track manually​


Stock book​

Stock cards
Stock control systems - keeping track using computer software
Runs on similar principles to manual systems​
More flexible​
Efficient ​
Quick ​
Identify the cheapest and fastest suppliers​
Automatic stock monitoring ​
Used alongside RFID, to track items through the supply chain
The Role of Information in the Supply Chain​
Why is information important in the supply chain?
Decision making based on facts ​

Driving business efficiently and effectively​

Timely and accurate information reduce logistics cost ​

 ->
Meet Customer´s Demand

Why information technologies?
They make human´s life easier. ​

Accessible and affordable ​

Bring customers and suppliers closer​

The information flows faster and more accurate ​

Timely and accurate information​

Information visibility​

Which are the benefits?
Line up operations​
Schedule´s variability reduction​
Planning period’s reduction​
Partnerships growth ​
Inventory´s control​
Timely and accurate information​
Fewer fluctuations on customer demand. ​
REAL demand can be observed.

Which information technology should a company use?​
Supply Chain Planning (demand for material, capacity and services)​

Execution (since an order is place until it is fulfilled) i.e
warehouse management, inventory management, labor optimization​

Event Management (data collection in real time from different sources)​

Business Intelligence (self-service reporting)​
Examples of Information Technologies
How do we measure the performance of a company?
Metrics or KPI (Key Performance Indicators)​

What have to be measure are the results and not the activities ​

In the SIX SIGMA methodology. “What can´t be measured can´t be controlled, what can´t be controlled can´t be improved, and what can´t be improved deteriorates”​
Supply chain vulnerability –​
risk management and resiliency ​


„Degree to which people, property, resources, systems, and cultural,
economic, environmental, and social activity is susceptible to harm,
degradation, or destruction on being exposed to a hostile agent or factor. “​

Questions that help to identify vulnerabilities​

What has disrupted operations in the past?​​

What known weaknesses do we have?​

What “near misses“ have we experienced?​

What would be the effect of the loss of our distribution site?​

What would be the effect of the loss of a key supplier or customer?
Outsourcing to volatile or vulnerable locations​

Failure to identify exposures​

Supplier of supplier​

accumulations of product
accumulations of suppliers
Assessing all aspects of a supply chain​
Damage to suppliers​

Damage to infrastructure​
“common-cause failure“​

Damage to customers​

Risk Management - Strategies
Diversify suppliers

Invest in solid relationships

Incorporate risk management criteria

Require suppliers to adhere to pre-established risk management and loss control practices

Know where factories are located from which parts are sourced

Supply Chain Management Relationships
The importance of relationships in SCM

to achieve quality and efficiency of the final product
to implement their own supply chain operations and management practises across countries
The Evolution of Logistics

“Supply Chain is the network of organizations that are involved through upstream
and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of ultimate consumer.” – Christopher Martin​

What is Supply Chain Management?

“Supply Chain is the network of organizations that are involved through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of ultimate consumer.” – Christopher Martin​

The reduction of costs,​
Customer satisfaction,​
Competitive advantage
Aims of SCM
Differences between Supply Chain and Logistics

-> the transfer to a third party of the management
and delivery of a process previously performed
by the company itself.

companies outsource for cost reasons
core competences
the rapid advances everywhere

Four reasons to decide to outsource
Failures in outsourcing
late delivery
consistency of quality
general reliability
general responsiveness
cost realization
SC integration vs. SC collaboration
is the alignment and interlinking of business processes

is product and process oriented
is a relationship between supply chain partners developed over a period of time

is focused on relationships
External & internal integration
horizontal & vertical collaboration
Supply Chain Strategies
raw materials
- capability to transport large volumes

- the cost of shipment is also very low

- preferable for long distance and heavy
- use of certain ports

- limited access to water

- potential for natural disasters
- small workforces
- unaffected by environmental conditions
- reliable
- very long operating costs
- work continuously without a break
- move large quantities over
long distances

- vulnerable to attack in politically
unstable areas

- can carry certain types of fluid​
- greater accessibility
- better capacity and efficiency
- works, when the transfer between
the modes is made quickly and cheaply
- can lead to delays and additional costs​
The intermodal transportation mode is the combination of the five basic modes.​
Advantages :
Disadvantages :
- air and motor carriers - excellent ride quality and good safety measures

- rail and water carriers- can damage the freight​, because of vibrations or unsafe materials
Logistics Service Providers

Own-account transportation
Trucking companies
Freight forwarders
Pick and pack
Reverse logistics
Involved in the strategy design
Development of "clusters"
Group E
Group F
Group C
Group D
- fast
- available
- dependable
- frequent

- financed by the public
- shortages of skilled drivers
- regulations of driver hours

- restricted access to cities and
sensitive areas

- limits on exhaust emissions
"Is about specifying requirement, identifying sources, evaluating options and acquiring resources that are fit for purpose, cost effective and sustainable."
Sourcing strategies
Level of spend
Recurring procurement
Market maturity
Technology lifecycle of market
Number of sources and potential suppliers
Contract duration
Improvement and cost reduction
Kraljik matrix
Procurement process
Global Operations Management
Global Operations Management
Global logistics company​
Domestic & Global Procurement​
Goods & Services​ -> Production System
Operations Management -> management of manufacturing sytems & service systems​
Domestic & Global Operations Management​

What is Supply Chain Management ?
Electronic data interchange
Materials requirement planning
Radio Frequency Identification
Vendors Management Inventories
Enterprise Ressource Planning


“Organizations that fare best are the ones that realize the importance of building resiliency into the supply chain.“
Business Dictionary
competition among supply chain partners

changing of customer requirements
governmental requirements
limited information availability

Transport in Supply Chain Management

Water carriers​

* Bullwhip effect
* Efecto Látigo
* Coup de fouet
Full transcript