Advanced Logistics Mngmt Midterm

logistics management

part of supply chain that plans, implements, and controls efficient, effective forward and reverse flow of goods between point of origin and point of consumption to meet customers’ requirements

reverse logistics examples

IKEA buy back and resell, Amazon returns, HP ink recycle program

inbound logistics

logistics brining raw materials to factory floor

outbound logistics

logistics delivering manufactured goods to end consumer

parts of supply chain that aren’t logistics

marketing, IT, strategic planning

value added by logistics

product, promotion, price, place

total cost approach

all relevant activities in moving and storing products should be considered as whole

product

amount of SKUs to hold, product design, sustainable products

promotion

availability of highly advertised products

price

landed price

place

bring products to right place

logistics in relation to GDP

higher % of GDP means higher transportation costs, lower % of GDP means lower amount of transportation and less economic activity

primary cash flow

customer → producer → supplier

MPS

master production schedule

MRP

material requirements planning

MRP II

manufacturing resource planning

landed cost/price

sum of item price, shipping cost, and all other costs to deliver product to you

material management

inbound logistics

physical distribution

outbound logistics

logistics variations

demand fluctuations, seasonality, product variety, product and system defects

6 sigma

improve quality by removing defect causes and reduce variabilities in processes, 6 standard deviations from mean

unexpected variations

natural disasters, political events, pandemics

master production schedule

indicates when and how much of each finished product will be demanded

daily demand formula

daily demand = forecast / working days

MRP Inputs

master schedule, BOM, inventory records

MRP outputs

primary/secondary reports

primary reports

changes, order released, planned order schedules

secondary reports

exception reports, planning reports, performance control reports, inventory transactions

MRP disadvantage

ignores resource capacity

MRP II

includes capacity requirements planning for feasible schedules, addresses machine and labor resources

logistics management components

transportation management, warehousing, materials handling, inventory management, order fulfillment

supply chain management

coordination of suppliers, manufacturers, distributors, and retailers to ensure products and services are available to final consumer in timely and cost effective fashion

MRP steps

establish gross requirements, determine net requirements, determine planned order releases

net requirements formula

net requirements = gross requirements - scheduled receipts - on hand inventory

ERP deployment strategies

big bang implementation, phased rollout, parallel rollout, SaaS rollout

inventory polling

polls uncertain demand

MRP II pros

easy to use, many packages available, well-trained workforce, excels at aggregating material requirements, still popular with small to medium companies

MRP II cons

assumes fixed lead times, not interactive, planning isn’t driven by events

forecast information flow

forecast drives MPS, MPS drives MRP / MRP II

on order inventory

inventory ordered currently going through lead time

inventory position

determines total available and incoming stock capability

inventory position formula

inventory position = on-hand inventory + on-order inventory - backordered inventory

ERP

fully integrated computer-based technology used by organizations to manage resources and information throughout a supply chain

decentralized data system

marketing can count beer sold by pack, production by bottle, transportation by case

ERP modules

finance, ops / supply chain, quality / materials management, sales & marketing, HR

ERP examples

Microsoft Dynamics, SAP, Oracle, Infor

ERP disadvantages

very expensive, lengthy implementation process, data errors replicated throughout system, high cost of system downtime, reliant on vendor to support mission critical systems

company driven ERP deployment

based on company established objectives, well understood, have IT departments to manage ERP systems

ERP vendor led

have established methods used for ERP implementations

big bang implenentation

strategy to implement all enterprise functionality and ERP modules in single instance as major event

big bang implementation pros

shorter implementation time, lower costs compared to longer implementation, all user training complete before initial rollout, ERP goes live on planned date

big bang implementation cons

riskier than phased rollout approach, details may be overlooked to rush change, employees are designated to learn new system before designated implementation date, failure in area of system can effect all others

phased rollout

focuses on phasing in few modules at time for slower, more controlled implementation approach

phased rollout pros

step by step implementation, ability to leverage lessons from pprior implementation rollouts, employees learn as they go, less risky

phased rollout cons

longer implementation timeline and potentially higher costs, delayed integration of whole business process / enterprise, can make implementation complexities, change fatigue, large planning and coordination needed

parallel rollout

legacy and new ERP system deployed simultaneously

parallel rollout pros

users learn new system while working on old one, eliminates most data integrity and migration issues, least risky implementation method

parallel rollout cons

double keying of data is very labor intensive, most expensive method

SaaS rollout

ERP accessed through cloud instead of local server, used by small to medium companies

SaaS rollout pros

simpler to deploy, lower implementation cost, rapid scalability and reliability, staff can concentrate on more value adding activities

SaaS rollout cons

potentially limits some integration capabilities, increased data security risk, relies on fast & stable internet

bullwhip effect

amplification of variability in demand when moving up the supply chain from retailers to manufacturers