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Logistics Management/ Supply Chain Management


Logistics Management/ Supply Chain Management Judith Molka-Danielsen j.molka-danielsen_at_himolde.no http://home.himolde.no/~molka Overview Global value model for B2B ... – PowerPoint PPT presentation

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Title: Logistics Management/ Supply Chain Management

Logistics Management/Supply Chain Management
  • Judith Molka-Danielsen
  • j.molka-danielsen_at_himolde.no
  • http//home.himolde.no/molka

  • Global value model for B2B systems (all)
  • Logistics management/supply chain (ch10)
  • Human Resource/support services (ch10)
  • Customer Relations Management (ch11)
  • Manufacturing and process management (ch12)
  • Financial management/EDI (ch12)

B2B Inputs
Logistics Management
Manufacturing Process Management
Customer Management
Financial Management
Logistics ManagementSupply Chain Management
  • Supply Chain Management (SCM) is an outgrowth of
    traditional logistics management and Enterprise
    Resource Planning (ERP)
  • It extends the management function outside the
    organization to both the supplier organizations
    and the distribution channels
  • Good ERP/SCM can increase net revenues 4-6
  • SCM has become an expectation for industry

  • Firms are moving from an process-efficiency
    driven focus
  • to a customer value-benefit focus.
  • This involves understanding Customer Needs.
  • Costs are coorelated to uncertainty in the Supply
    Chain (enterprise integration SCM software is to
    address this).
  • SCM modules address logistics, manufacturing,
    finance, etc.

  • The best-in-practice approaches have been
    incorporated in various systems
  • Major vendors include
  • SAP
  • PeopleSoft
  • Baan
  • Often, organizations find adoption of full blown
    ERP/SCM systems require significant
    organizational change

LM-SCMPurchasing/Supplier Management
  • The goal is to simplify routine transactions and
    reduce paperwork
  • Trend is to reduce supplier steering and partner
    with the selected suppliers so that both
    organizations win
  • Purchase orders can be issued by DBMS triggers on
  • Suppliers can be allowed to replenish inventory
    based on agreed upon parameters

LM-SCMDistribution Management
  • The distribution or demand chain is concerned
  • Speeding data acquisition
  • Controlling inventory, warehousing and shipping
  • Reducing paperwork
  • It also includes invoice auditing and order

LM-SCM Fundamentals
  • What is a Supply Chain? Steps to meet customer
    needs. Global competition makes the customer in
    control of production, not the manufacturer.
  • What is SC-management? Coordination of tasks
    (order generate, taking, filling, distribution of
    products, services and information). Key players
    create an extended enterprise.
  • Is SCM a new concept? No, 25 years. Focus
    progresses efficiency, integration of
    enterprise, product made to customer
    expectations. The last means more information
    integration between organizations.

LM-SCM Fundamentals
  • Pull (build to order) versus Push (build to
    stock) models.
  • Pull model requires support product varients,
    reduced lead times, improved quality, lower unit
    cost, operational excellence, performance
  • Pull implementation requires gather customer
    demands, make right choices to meet demand, make
    informed decisions on materials, deliver goods,
    collect payments.
  • Managers need unified plan, communication,
    coordination to all involved.

LM-SCMElements of SCM
  • Planning System for Purchasing Management right
    product, right place, right time. Consumer demand
    triggers order up the supply chain. Begin with
    POS terminal. Then use information to determine
    inventory investment, saftey stock, inventory
    turns, replenishment frequency.
  • System 1. Order generation and forecast
    planning, 2. Order taking and entry for

LM-SCMElements of SCM
  • Execution System for Distribution Management
    facilitate the physical movement of goods and
    services. Focus on operational efficiency.
  • Ensure order fulfillment, procurement,
    manufacturing, and distribution management are
    integrated. .

LM-SCMElements of SCM
  • Performance Measurement Systems to study the
    health of the approach accounting and financial
    management systems are focus. Electronic commerce
    tools such as datawarehousing used to analyse
    data without impacting performance of operational
  • Use of software agents to let different users set
    different criteria for sifting through data. (
    ie. Salespersons, accountants, material planners,
    purchasing agents).

LM-SCMIntegrating Functions
  • Customer Asset Management manage proactively,
    better understand market and needs.
  • Integrated Logistics production planning,
    procurement, inventory management.
  • Financial Management manage flows through
    financial intermediaries.
  • Supply Chain coordination is also know as
    Integrated Workflow Management.

LM-SCMMerchandise management
  • 1 Million stockkeeping units (SKUs), every
    product style, size, color.
  • On-trend, in-stock execution strategies (optimize
    selection, minimize inventory)
  • best price per unit, minimize markdowns.

LM-SCMOrder Management Cycle (OMC)
  • 1. order planning and generation - make sure the
    inventory is there.
  • 2. online cost estimation and pricing - find
    prices, understand price elasticity of market,
    yield management
  • 3. order receipt and entry - how to interact with
    customers, receive requests, what to do with

LM-SCMOrder Management Cycle (OMC)
  • 4. order selection and prioritization - which
    customers get served first, better, which orders
  • 5. order scheduling - coordination between
    departments needed.
  • 6. order fulfillment and distribution - bringing
    parts together, ie. FedEx ships parts to assembly
    place, not warehouse. Retailing is not just
    selling but order fulfillment.
  • 7. order billing and payment management - can the
    customer understand the bill.

LM-SCMSoftware Interfaces
  • 1. CRI - Store operations and customer service.
    UPC - mark, track, exchange product information.
  • 2. RSI - where to keep stock. Partnerships with
    few key suppliers
  • purchasing - from suppliers
  • inventory mgmt - how much in stock, where
  • stock control - track movement
  • stock movement - receiving, checking, storing,
    pick-ups, dispatching
  • distribution operations - ops of warehouse,
    transport fleet
  • 3. RMI -
  • merchandise planning (profitability analysis,
  • mircomarketing (advertising, targeting
  • brand management (package and design).

LM-SCMApplication Software
  • Horizontal common functions across industries,
    ie. financial and manufacturing. See applications
    in Table 10.1
  • Vertical automate tasks that are specific to a
    market segment.
  • Dominate players SAP, Oracle, PeopleSoft, Baan.
  • Three-tier software and Intranets become
    technology to support enterprise business
    processes and philosophy. Use of ubiquitous Web

LM-SCMApplication Software
  • Packages are good they include the best
    practises of many businesses. They include
    distilled knowledge.
  • Important Characteristics of Software for SCM
  • total costs
  • access to expanded distribution channels
  • ability to integrate new technology
  • security is addressed
  • tailor to customer from the pre-packaged software
    with selective options.

LM-SCMUltimate Goals
  • When a sophisticated SCM system is coupled with
    agile manufacturing system, customer driven
    manufacturing is possible
  • A first experiment in this direction is the
    Levi-Strauss custom jeans
  • Most of the computer vendors offer similar

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Human Resource and Other Support Services
  • Any other support service in the organization can
    also be enhanced by distributed electronic
  • Human resources management is frequently
    addressed as a part of the effort because of the
    complexity of modern benefits packages

HRM Functions
  • Recruiting, training, salary administration
  • Payroll functions including time reporting,
    payroll calculation and tax computation
  • Benefits administration including flexible
    spending accounts, pension programs and defined
  • Health care benefits management

HRM Information Dissemination
  • A big part of the human resources function
    involves making information available to
  • Policies, procedures, options can be maintained
    and updated efficiently using intranet technology
  • Employee queries related to options and
    enrollments can be distributed by intranet

HRM Workflow
  • Benefits claims and queries can be submitted
    electronically and processed using workflow
  • Standard queries can be processed and returned
    securely by email to the appropriate person
  • Relationships with external agencies can be
    facilitated by email and EDI processing
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