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Global operations: Supply chain management & GLobal logistic
Transcript of Global operations: Supply chain management & GLobal logistic
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 Quantity and right Quality
Activities in Logistics
Warehousing and Storage
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
transport goods at lower price
efficient by moving larger quantities from one place to another
expensive equipment requirements
fixed costs are higher
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
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 control systems - keeping track using computer software
Runs on similar principles to manual systems
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
Which are the benefits?
Line up operations
Schedule´s variability reduction
Planning period’s reduction
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
Damage to customers
Risk Management - Strategies
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,
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
the rapid advances everywhere
Four reasons to decide to outsource
Failures in outsourcing
consistency of quality
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
- 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
- very long operating costs
- work continuously without a break
- move large quantities over
- vulnerable to attack in politically
- 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.
- 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
Pick and pack
Involved in the strategy design
Development of "clusters"
- financed by the public
- shortages of skilled drivers
- regulations of driver hours
- restricted access to cities and
- limits on exhaust emissions
"Is about specifying requirement, identifying sources, evaluating options and acquiring resources that are fit for purpose, cost effective and sustainable."
Level of spend
Technology lifecycle of market
Number of sources and potential suppliers
Improvement and cost reduction
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.“
competition among supply chain partners
changing of customer requirements
limited information availability
Transport in Supply Chain Management
* Bullwhip effect
* Efecto Látigo
* Coup de fouet