Logistics_Management-1

Logistics_Management-1 - Michigan State University 2004 1 M...

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Unformatted text preview: Michigan State University, 2004- 1 - M Michigan State University, 2008- 1 - Click to edit Master subtitle style l Michigan State University, 2008 Logistics Management Michigan State University, 2004- 2 - M Michigan State University, 2008- 2 - Logistics Defined The process of planning, implementing, and controlling the efficient, effective forward and reverse flow and storage of goods, services and related information from the point of origin to point of consumption in order to meet customer requirements. Council of Supply Chain Management Professionals Michigan State University, 2004- 3 - M Michigan State University, 2008- 3 - Logistics of Business is Big Business • Total logistics expenditure of United States Firms in 2007 exceeded 10% of GDP • Global logistics expenditure in 2008 will exceed $ 9 Trillion (US) • 10-30% of total operating expenses and 5-20% of sales are spent on logistics in companies • Logistical service elements are ranked second only to product quality in importance to industrial buyers Michigan State University, 2004- 4 - M Michigan State University, 2008- 4 - Logistics of Business is Big Business 100 200 $ Billion 1980 • GDP $2.80 trillion · Logistics Cost $451 billion • 16.1% of GDP · Transportation Cost $214 billion • 47.5% of Logistics Cost Source: Council of Supply Chain Management Professionals’ “18th Annual State of Logistics Report® June, 2008 2007 • GDP $13.84 trillion · Logistics Cost $1.398 trillion • 10.1% of GDP · Transportation Cost $857 billion • 61.3% of Logistics Cost Michigan State University, 2004- 5 - M Michigan State University, 2008- 5 - • To meet or exceed specified customer service levels at the least total cost • Elements of service include: * Product availability: Having product available at the place customers want it. (avoid stock outs,) * Lead time Performance: How long it takes for customers to receive the products (Customer experienced lead time, variability in that lead time, on-time delivery) * Service quality, reliability, and accuracy: Such things as ensuring the right product is delivered, no damage, providing information, shipping to the right place. * “Perfect Order Performance” Logistics Objectives Michigan State University, 2004- 6 - M Michigan State University, 2008- 6 - Order Processing Inventory Transportati on Facility Network Warehousing Material Handling Packaging Logistics Cost Elements Michigan State University, 2004- 7 - M Michigan State University, 2008- 7 - Logistics Impact on Financial Performance • Costs – Transportation • Inbound • Outbound • Inter-facility – Warehousing/Distribution Center – Material Handling (receiving, checking, marking, etc.) – Inventory Carrying Cost – Information Systems/Processing • Assets – Inventory – Transportation Equipment – Handling Equipment – Warehouse/DC Facilities – Technology Investment Michigan State University, 2004- 8 - M Michigan State University, 2008- 8 - Key Trade-Offs in Logistics...
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This note was uploaded on 08/11/2009 for the course MSC 303 taught by Professor Cooper during the Spring '08 term at Michigan State University.

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Logistics_Management-1 - Michigan State University 2004 1 M...

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