Chapter_11_Logistics_Management

Chapter_11_Logistics_Management - Michigan State University...

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Unformatted text preview: Michigan State University, 2010 Logistics Management Michigan State University, 2010- 2 - Logistics of Business is Big Business • Total logistics expenditure of United States Firms in 2008 was almost 10% of GDP • Global logistics expenditure in 2008 exceeded $ 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, 2010- 3 - • Logistics Management : movement and storage of materials to meet customer needs and organizational objectives- Includes forward and reverse flow- Includes flow of materials and information Logistics Management http://thenewlogistics.ups.com/#/scale/media?item=1,1 Michigan State University, 2010- 4 - Figure 11-1 Activities of Integrated Logistics Management Michigan State University, 2010- 5 - • 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 Logistics Impact on Financial Performance Michigan State University, 2010- 6 - • Cost to cost – Example: Increase transportation cost to reduce inventory • Cost to service – Increased logistics cost to obtain increased service Key Trade-Offs in Logistics Michigan State University, 2010- 7 - Transportation Michigan State University, 2010- 8 - • Infrastructure • Economic Regulation – Attempt to make transportation services equally accessible and economical to all. Control entry into business, rates and services. Much of this regulation has been reduced in the U.S....
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Chapter_11_Logistics_Management - Michigan State University...

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