Logistics and Supply Chain Challenges for the Future - PowerPoint PPT Presentation

About This Presentation
Title:

Logistics and Supply Chain Challenges for the Future

Description:

Chapter 16: Logistics and Supply Chain Challenges for the Future Introduction Logistics and supply chain management are changing quickly, and are characterized by ... – PowerPoint PPT presentation

Number of Views:573
Avg rating:3.0/5.0
Slides: 31
Provided by: JohnPatri8
Category:

less

Transcript and Presenter's Notes

Title: Logistics and Supply Chain Challenges for the Future


1
Chapter 16
  • Logistics and Supply Chain Challenges for the
    Future

2
Introduction
  • Logistics and supply chain management are
    changing quickly, and are characterized by
  • Many innovations and improvements
  • Movement towards being considered as players in
    strategic, competitive advantage
  • Prime candidates for application of tried and
    proven approaches to strategic planning

3
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Historical Perspective on Strategy
  • Has become an appropriately meaningful and
    integrated activity in most globally competitive
    firms.
  • Evolutionary development phases
  • In the 50s and 60s, was referred to as investment
    planning.
  • In the 70s, began to focus on internal growth
    opportunities.
  • In the 80s, a combination of outside investment
    and internal growth opportunities was used.

4
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • In the 80s, a combination of outside investment
    and internal growth opportunities was used.
  • In the 90s, refocused on gaining strategic
    advantage in the marketplace and for defending
    against competitors.
  • In the early 2000s, strategic focus clearly moved
    toward the development of effective, interfirm
    relationships that would create maximum value for
    the firms products and/or services.

5
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Definitions
  • Strategy a course of action, a scheme, or a
    principal idea through which an organization
    hopes to accomplish a specific objective or goal.
  • Tactics refers to the operational aspects that
    are necessary to support strategy.

6
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Examples
  • Cross-docking a term that describes moving
    goods through a distribution center in less than
    a day, a tactic used by Wal-Mart among others to
    both lower prices while increasing customer
    service.
  • Rapid inventory turns contribute to the lower
    costs, and the speed of the flow of inventory
    results in the increase in customer service.
  • Internet capabilities employed by Best Buy to
    let customers order over the Internet and pickup
    items at a retail store location.
  • Best Buy is combining its technological
    competencies with its logistics and supply chain
    capabilities of customer service and market
    positioning.

7
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Examples
  • Inventory availability Benneton is another
    retailer that has used good logistics to
    accomplish increased market share and higher
    profit levels
  • By developing a Quick Response (QR) system
    utilizing bar coding of cartons and linking
    production to retail locations, Benneton achieves
    low in-store inventory, right stock availability,
    and high levels of customer service.

8
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Strategy Classification
  • Porters model of basic strategies, namely, cost,
    differentiation, and focus is the most popular
    scheme.
  • Strategies based on low cost essentially stress
    offering a product or service in a market at a
    price or cost lower than that of competitors.
  • Automobiles and electronic products are two
    examples of this strategy, as are the general
    operations of retail firms such as Wal-Mart,
    Target, and McDonalds.

9
Figure 16-2 Strategies for Creating Value
10
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Strategy Classification
  • Strategies based on differentiation attempt to
    make a product or service look unique, such that
    consumers are willing to par a premium price.
  • Perceptions based on better fit, higher quality,
    long product life, better service, and other
    similar attributes are typical of strategies
    based on differentiation.

11
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Strategy Classification
  • Strategies based on focus attempt to make a
    product or service fit a niche or small market
    segment where either cost or differentiation is
    then employed.
  • Offering delivery, 24/7 hours, multiple offerings
    of similar products into differentiated segments
    and other similar strategies are typical of
    focus-based models of classification.

12
Overview of Strategic Planning for Logistics and
Supply Chain Management
  • Strategy Classification
  • Porters value chain suggests that a company can
    be disaggregated into five primary activities and
    four support activities.
  • Examine Figure 16-3.

13
Figure 16-3 The Generic Value Chain
14
Time-Based Strategies
  • Reducing Cycle Time
  • Logistics activities that shorten the length of
    the order/replenishment cycle have been the focus
    of much recent attention.
  • Reductions in cycle time are based on three
    factors processes, information, and decision
    making.
  • If logistics is seen as a series of processes,
    performing those processes faster will reduce
    cycle time.

15
Time-Based Strategies
  • Utilization of faster, more efficient forms of
    order transmission---EDI or the Internet---can
    significantly reduce the time needed to complete
    the transaction.
  • Finally, empowering individuals to make decisions
    can be one of the most important ways to speed
    cycle time.
  • Pre-approvals and other delegated decision making
    models can lead to making mistakes, but the
    experience of Proctor Gamble, among others, is
    that the risk is justified in terms of time saved
    and improvement in customer responsiveness.

16
Time-Based Strategies
  • Time-Reduction Logistics Initiatives
  • Push to pull
  • Cross-docking, JIT, VMI, and CRP are all
    contemporary approaches that help logistics
    systems move from push to pull (JIT Just In
    Time VMI Vendor Managed Inventory, CRP
    Continuous Replenishment Planning)
  • Each strategy reduces the order cycle by
    shortening the total time from vendor to delivery
    to customers.

17
Time-Based Strategies
  • Time-Reduction Logistics Initiatives
  • Anticipate customers needs
  • Improved ability to anticipate through
    collaborative planning, forecasting, and
    replenishment (CPFR) enables the logistics and
    supply chain processes to make a more valuable
    contribution to corporate objectives.
  • The switch from push to pull is a more
    demand-responsive system, but requires changes
    that may be difficult to achieve depending on the
    corporate culture in place.

18
Time-Based Strategies
  • Time-Reduction Logistics Initiatives
  • Manufacturing impacts
  • Pull approach requires a fast manufacturing
    system.
  • Risk of low or no inventory depends on fast and
    frequent replenishment.
  • Responding to demand
  • Consistent with time-compression strategies
  • Produce to order now being tried by furniture and
    farm implement manufacturers, both traditional
    produce for stock companies.

19
Time-Based Strategies
  • Time-Reduction Logistics Initiatives
  • Postponement involves not completely finishing a
    product until an order arrives.
  • Food processors that can brights (unlabeled
    canned goods) and do not label until an order is
    received
  • Auto manufacturers that pre-wire electronic
    harnesses to take any option, not knowing what a
    particular car order will specify.

20
Asset Productivity Strategies
  • Inventory Reduction
  • Much evidence that companies have been successful
    in reducing inventories.
  • Time reduction strategies have contributed.
  • Facility Utilization
  • Strategy to keep the goods moving throughout the
    logistics and supply chain system has contributed
    to effective use of logistics facilities thus
    squeezing more productivity from these assets.

21
Asset Productivity Strategies
  • Equipment Utilization Strategies
  • Some reductions have occurred here as a result of
    contraction of this equipment and smarter, more
    sophisticated equipment dispatching software.
  • Doing more with less is a result of leaner
    enterprises.

22
Asset Productivity Strategies
  • Third-Party/Contract Logistics Services
  • Use of 3PLs has resulted in dramatic positive
    impact on asset productivity.
  • DuPont, Nabisco, Proctor Gamble, General
    Electric and General Motors and others are users
    of 3PLs, focusing on managing logistics services
    rather than on the assets themselves.
  • Examine Figure 16-4 on 4PLs potential impact.

23
Figure 16-4Fourth-Party Logistics
24
Technology-Based Strategies
  • Disruptive technologies are those will help make
    firms more competitive, but will change the basis
    of competition.
  • Implications that logistics and supply chain
    areas of the future will differ significantly
    from those of today.
  • E-commerce e-procurement and electronic
    marketplaces will continue to grow in importance
    (Refer Chapter 4)

25
Relationship-Based Strategies
  • Collaboration
  • Supplier-Customer Dyad
  • Parties involved dynamically share and
    interchange information.
  • Gap Analysis (Pisharodi Langley, JBL 1990)
  • Group benefits more than individual benefits.
  • All parties modify their business practices.
  • All parties conduct business in new and visibly
    different ways.
  • All parties provide a mechanism and process for
    collaboration to occur.

26
Figure 16-7 Types of Collaboration
27
Relationship-Based Strategies
  • Value Nets
  • Taking the place of the old supply chain, the
    value net starts with the customer and is built
    around three powerful value propositions
  • High levels of customization
  • Super service
  • Convenient solutions

28
Relationship-Based Strategies
  • Value Nets
  • Combines strategic thinking with the latest
    advances in digital supply chain management.
  • Every customer is unique.
  • Customers choose products or services they value
    most.
  • Capture real choices in real time and transmit
    them digitally to other net participants.
  • Examine Figure 16-8.

29
Figure 16-8 Gateways Value Net
30
Synthesis and Future Directions
  • Shift from Vertical to Virtual Integration
  • Collaboration
  • Knowledge of Core Competencies
  • Expertise
  • Strategic fit
  • Ability to trust
  • Technology and Connectivity
  • Managing-the-People Skills
  • Comprehensive Supply Chain Perspective
Write a Comment
User Comments (0)
About PowerShow.com