BALLOU16 - 16-1Logistics/Supply Chain ControlChapter 16The...

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Unformatted text preview: 16-1Logistics/Supply Chain ControlChapter 16The logistician is now a process manager and no longer just an activities administrator. 16-2CONTROLLINGPLANNINGORGANIZINGCorrecting• Fine tuning• Major re-planning• Re-engineeringMeasuring• Auditing• Performance measures• ReportingStandards/Goals• Performance targetsAssessing• Status analysis• Benchmarking• Best-in-classControlling in Logistics/Supply Chain Management16-3•Control can be represented as a model whose key elements are:-Inputs, process, and outputs-Standards and goals-Performance measurement-Monitoring-Corrective action•Control systems are:-Open-loop-Closed-loop-ModifiedA Control ParadigmDefinitionThe process where planned performance is brought into line or kept in line with desired objectives.Schematic of Control ProcessElements of the control processInputsOutputsSupply chain activitiesand customer servicelevelsActivity costs andcustomer serviceMonitorComparison by manager, consultant, or computerCorrective actionProcessOngoing supply chain activitiesExternal and internal forces and changesPerformance reportsStandardsor goals16-4Open-Loop Control SystemService andinventory level goalsMonitorThe managerReports on costand serviceProcessWarehouseoperationCorrective action:Adjust supplyDemandInputsOutputsStock resupplyStockouts andinventory costs16-5Closed-Loop Control SystemDecision ruleWhen L <ROP, order Q*Computerreport on LCorrective action:Adjust supplyDemand, DInputsOutputsStock resupply, QInventoryon hand, LInventory standardsfor Q*and ROPProcessWarehouseoperation16-6Modified Control SystemInventory standardsfor Q*and ROPDecision ruleWhen L <ROP, order Q*Computerreport on LProcessWarehouseoperationCorrective actionStock order on supplierDemand, DInputsOutputsStock resupply, QInventory on hand, L,stockouts and inventory costsManagerReports on costs,service, product promotions,production schedules, etc.16-716-8Auditing PerformanceReasons for conducting an audit•Bring logistics system in line with the inherent demand characteristics•Identify opportunities for improvement•Understand the nature of logistics in the firm and its relative costs•Determine if logistics meets its performance goalsElements to evaluate•Customer service levels•Transportation costs•Inventory costs•Demand levels•Purchase costs16-9...
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BALLOU16 - 16-1Logistics/Supply Chain ControlChapter 16The...

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