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Unformatted text preview: Transportation and SCM
Transportation and SCM
Transportation is vital to the efficient and effective functioning of the supply chain. The Evolution of Logistics
The Evolution of Logistics Logistics = the process of planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to consumer requirements. SCM
SCM Logistics focuses on the coordination of activities within the firm. Supply Chain Management encompasses the activities in the entire logistics channel environment, i.e., the firm and all of its intermediaries. Transportation is a vital element of the supply chain. Links vs. Nodes. 2000: A Decade of Challenges
2000: A Decade of Challenges A changing environment forced businesses to reevaluate their approach to doing business. Focused on customer service, quality, value added, and productivity. Contributing factors included: intensified global competition; increased involvement in international markets; deregulation of transportation; mergers; and shrinking profit margins. The Evolution of Logistics
The Evolution of Logistics 1.
3. Emphasis on logistics began after WWII and continued into the 21st century.
The internet and ebusiness.
Rapidly changing technology. The Logistics Concept
The Logistics Concept The Logistics Concept includes three elements: Focus on total cost.
2. Take advantage of tradeoffs.
3. Avoid suboptimization.
1. Evolving Logistics Structures
Evolving Logistics Structures Fragmentation in the 1960’s. Evolving Integration in the 1980’s – Materials Management Inbound and Physical Distribution Outbound. Total Integration in 2000. Never actually achieved, but this is what we strive for. Optimality and Total Cost
Optimality and Total Cost The overarching goal of logistics is to achieve optimality in performance. First level, optimality between transportation, inventory, and customer service. Second level, optimality between logistics and other functional areas of the firm. Third level, optimality within the SC. Channel Members
Channel Members Other carriers of the same or different mode. Joint rates/revenue divisions. Trackage rights access by other rail carriers. Delivered price. Channel captains, e.g., WalMart. Cost Trade Offs
Cost Trade Offs 1.
2. Numerous tradeoffs are possible within the firm and the supply chain.
The goal is to take advantage of these trades offs to reduce costs and improve customer service.
Production and inventory
Inventory and warehousing Trade Offs Con’t
Trade Offs Con’t
5. 6. Packaging and Loss and Damage.
Production and Transportation – Lardner’s Law.
Transportation and customer service, i.e., premium transportation yields better service.
Transportation and Inventory – JIT. ...
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- Fall '08