Chapter_11_Logistics_Management

Chapter_11_Logistics_Management - Michigan State...

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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...

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