BUSINESS LOGISTICS SYSTEMS ANALYSIS

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BUSINESS LOGISTICS SYSTEMS ANALYSIS
Lecture 2 Logistics Defined

• H. E. METZNER, Ph.D.
• Department of Engineering Management
• University of Missouri-Rolla

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LOGISTICS TAKES A NEW TURN

• Supporting Military Campaigns
• Supporting Military Deployment
• Distributing Consumer Goods
• Supporting Industrial Production

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LOGISTICS FOCUSED ON FEEDING THE MILITARY ON
LONG CAMPAIGNS

• Alexander The Great
• Roman Legions
• Napoleons Russian Campaign
• Washington At Valley Forge
• World War I And II

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MODERN TECHNOLOGY

• Modern Metals And Materials
• Modern Fuels
• Modern Production Processes
• Minituration
• Modular Switching

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Modern technology made living off the land
impossible. Spares and test equipment had
to accompany the weaponry to the field and
required logistics support.
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ELEMENTS OF LOGISTICS IN SUPPORT OF
MILITARY DEPLOYMENT

• Provisioning
• Training
• Technical Manuals
• Field Service

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LOGISTICS AND THE PHYSICAL DISTRIBUTION OF
CONSUMER GOODS

• Capital goods producers such as Boeing,
  Caterpillar, and John Deere had needs for
  logistics similar to the military.
• Mass production industries had a need for
  physical distribution.

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ELEMENTS OF A LOGISTICS CHANNEL
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FUNCTIONS OF A LOGISTICS CHANNEL

• Physical Distribution
• Information Movement
• Customer Service

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PHYSICAL DISTRIBUTION

• Packaging
• Materials Handling
• Transportation
• Warehousing

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INFORMATION MOVEMENT

• Order Gathering
• Order Processing
• Inventory Control
• Order Transmittal
• Production Scheduling
• Location Analysis

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CUSTOMER SERVICE

• Percent Fill Per Unit Time
• 90 In Two Days

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JUST-IN-TIME MANUFACTURING

• Inventory Reduction Strategy
• Frequent, Small Lot Transportation
• Firm Production Schedule
• Small Product Mix
• Assumes Slack Resources

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SUPPLY CHAIN MANAGEMENT

• EXPANDS THE JIT MODEL
• Backward to Tiers of Suppliers
• Forward to Consumer or User
• COORDINATES
• Manufacturing
• Purchasing
• In- and Out-bound Transportation
• Information Flows

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PHYSICAL SUPPLY AND DISTRIBUTION

• PHYSICAL PHYSICAL
• SUPPLY DISTRIBUTION

SUPPLIERS
FIRM
CONSUMER
TRUCK RAILROAD BARGE PIPELINE AIR
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The Logistics Planning Triangle
Facility location decisions
Customer Service
Transportation decisions
Inventory decisions
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LOGISTICS STRATEGY

• Cost reduction
• Capital Reduction
• Service Improvement

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FUNNEL MODEL

• Adjust safety stock as usage varies
• Fill echelons with stock for demand smoothing
• Aggregate demand over many users

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REPLENISHMENT CYCLES

• User Demand Cycle
• Retailer - Wholesaler Replenishment Cycle
• Retailer - W/S - Mfr Inventory Cycle
• Retailer - W/S - Mfr Production Cycle

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REPLENISHMENT CYCLES
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PIPELINE MODEL
IN
OUT
user
reseller
maker
vendor
vendor

• Use one, make one
• No safety stock buffers
• Variable velocity adjustments

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ASSEMBLY LINE and TEAM ASSEMBLY

• Assembly lines move the work piece from one
  position to another. The appropriate
  machines, tools, people and parts await the
  piece.
• Assembly stations hold the work piece and
  machines, tools, people and parts move to
  the piece.

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SUB-ASSEMBLIES AND PARTS LOGISTICS

• For assembly lines, parts and sub-assemblies
  are positioned and replenished as they are
  used in assembly.
• For assembly stations, parts and
  sub-assemblies are moved to the station in
  sequence as required by the work piece.

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ELEMENTS OF PHYSICAL DISTRIBUTION
KEY ACTIVITIES

• Customer Service Standards
• Transportation
• Inventory Management
• Information Flows and Order Processing

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ELEMENTS OF PHYSICAL DISTRIBUTION
SUPPORT ACTIVITIES

• Warehousing
• Purchasing
• Protective Packaging
• Location Strategy
• Forecasting and Scheduling

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BUSINESS LOGISTICS SYSTEMS ANALYSIS
Lecture 2 Logistics Defined
Assignment Q1, Q4
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Business Systems Logistics Analysis
Inventory Strategy
Transport Strategy

• Forecasting
• Storage fundamentals
• Inventory decisions
• Purchasing and supply
• scheduling decisions
• Storage decisions

• Transport fundamentals
• Transport decisions

Customer Service Goals

• The product
• Logistics service
• Information systems

Location Strategy

• Location decisions
• The network planning process

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