C2 Integrated logistics and supply chain

total logistics

treat the many different element that come under the broad category of distribution and logistics as one single integrated system

cost-trade offs

changes to one logistic activity cause some goods to increase and other to decrease

within logistics components

within a single function (warehouse, locations)

between logistics components

within a different logistics functions/elements (inventory-warehousing)

between company functions

within different company areas (finance-inventory, production-runs-inventory, marketing-customer satisfaction)

between company and external organizations

between 2 companies that are directly associeated (retailers)

total cost approach

all relevant activities in moving and storing products should be considered as a whole, no individually (cost efficient)

strategic

medium to long term, overall structural decisions, trade off between company functions and organizations

tactical

short to medium term, subsystems decisions made

operational

day to day decision making, operations controlled base on rules/standards

planning

ensuring operation is set up to run properly (doing the right thing)

control

make sure the operation run efficiently (doing the thing right)

feedback

where are we now?

objectives

where do we want to be? (customer requirements)

planning

how are we going to get there? (strategic, tactical and operational)

monitoring

how do we know when we have arrived?

globalization challenges

extended supply lead times, productions postponement with local added value, complicated node management, multiple freight transport options, extended and unreliable transit times

direct product profitability (DPP)

product oriented, unique process, particular product to a particular customer

material requirement planning (MRP)

balance supply and demand, necessary quantity and right timing, inventory control

distribution requirements planning (DRP)

inventory redistribution, stock allocation accord needed, stable inventory levels

just in time (JIT)

produce as orders arrive, minimal inventory, sporadic sales

service/value advantage

tailored service, distribution channel strategy, reliability, responsiveness, information, flexibility

cost/productivity advantage

capacity utilization, asset turn, low inventory, low wastage