Notes on Tactical Logistics Management (TLMLMA2)

Tactical Logistics Management Overview

Module Introduction

  • Module: Tactical Logistics Management (TLMLMA2) - Second Year, Module 9

  • Objective: Introduces key tactical logistics management activities and principles.

  • Topics Covered: Goods flow processes, time management in supply chains, financial aspects of logistics, customer service.

Assessment Structure

  • Assessment Methods:

    • Class Test (10% of semester mark)

    • Summative Assessment (30% of semester mark)

    • Final Examination (60% of final mark)

Study Unit 1: Introduction to Tactical Logistics Management

  • Key Concepts:

    • Tactical logistics involves arranging and organizing resources to ensure timely product availability.

    • Activities include buying, making, moving, storing, and selling.

  • Tactical vs. Strategic Logistics:

    • Tactical updates occur monthly to yearly; strategic decisions have longer timeframes.

    • Tactical focuses on cost-effective distribution for customer satisfaction.

Tactical Logistics Activities

  • Objectives:

    • Minimize order conversion time and WIP (Work In Progress).

    • Improve pipeline visibility, demand visibility, quality, and reduce costs.

Goods Flow Management

  • Supply Chain Flow: Coordinates purchase orders, material requirements, and production schedules to meet customer demands.

  • Material Requirements Planning (MRP): Determines inventory needs based on demand forecasts and schedules production accordingly.

Supply Chain Processes

  • Push Systems: Products pushed based on forecasts, can lead to inefficiencies (e.g., Bullwhip Effect).

  • Pull Systems: Demand-driven system, relying on actual customer orders, reducing inventory levels and variability.

  • Push-Pull Systems: Combine elements of both, enhancing responsiveness to customer demands.

Financial Aspects of Logistics Management (Study Unit 2)

  • Key Topics:

    • Shareholder value, cost of equity, free cash flow, economic value added.

    • Cost accounting concepts (marginal costing, CVP analysis).

Concepts of Costing

  • Shareholder Value: Value derived from equity, increased via cash flow optimization.

  • Cost of Equity Formula: Ce=Rf+βimesextMrpC_e = R_f + \beta imes ext{Mrp}

  • Activity-Based Costing (ABC): More accurate cost assignment based on the activity that drives costs.

  • Cost-Volume-Profit (CVP) Analysis: Identifies breakeven points and profit margins through fixed and variable cost understanding.

Conclusion

  • Encouragement for active participation and timely preparations for assessments. Understanding the concepts will aid in logistics management success and improve strategic decision-making.