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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
