Corporate Transportation Planning and Policy

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SCMN 7700/7706Demand Fulfillment Segment
01 SCL Overview
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Course Introduction

• SCMN 7700-06

Execution across our supply chain is the key to
maintaining our growth. Otherwise, were just
another retailer on the Web. Jeff
Bezos, Amazon.com
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Course Overview

• Introductions
• Course and syllabus highlights
• Instructor information

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SCMN 7700 Focus and Fit
M B A C O R E
M B A P R O J E C T
SCMN 7800
AMLG 7600
AMLG 7700
INTERNSHIP ELECTIVE
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Primary Responsibilities

• Logistics Opportunity Analysis
• PEC Team Project
• Class Activities
• Case Analysis
• Earthbound Farm
• Final Exam
• Take home, open book

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Instructor Information

• Professor Brian Gibson
• [phone]
• Brian.Gibson_at_auburn.edu

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Supply Chain Logistics Overview
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Supply Chain Overview- Some Caveats

• SCM is like art
• Everyone has their own interpretation
• SCM involves strategy
• Its more than moving stuff
• SCM is not a department
• It crosses organizations and functions
• SCM is not rocket science
• Or is it?

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What is Supply Chain Management?
Supply Chain Management - is the art of
managing the flow of materials and products,
information, and financial resources from source
to user. Integrated Supply Chain
Management - refers to the integrated set of
processes completed by supply chain participants
where technology is used to seamlessly share
information from end-to-end.
There are five key participants in a supply chain
Three key items flow between the supply chain
participants
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What does SCM involve?

• SCM includes all the activities that take place
  to get a product in your hands from the time of
  raw materials extraction to the minute you pull
  out your credit card and take the final product
  home.
• SCM focuses on
• Planning and forecasting
• Supply management and purchasing
• Operations management and product assembly
• Logistics, inventory, and transportation

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Is SCM important?

• A well-designed and executed supply chain
• Promotes efficiency and effectiveness
• Provides customers with access to the products
  that they want, when they want them, at a
  reasonable price
• Provides excellent career and employment
  opportunities
• Provides basic necessities such as food and water
  
• Any breakdown of these logistics pipelines
  quickly threatens human life. Recall 2005 when
  Hurricane Katrina flooded New Orleans, LA leaving
  the residents without a way to get food or clean
  water. As a result, a massive rescue of the
  inhabitants had to be made. During the first
  weekend of the rescue effort, 1.9 million meals
  and 6.7 million liters of water were delivered.

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SCM strategy or activity?
A recent survey asked 750 logistics
professionals How do you primarily view the role
of Supply Chain Management within an
organization? 9.1 As a corporate function or
activity within the organization 15.6 As a
strategy that transcends individual functions in
the organization 72.8 As a combination of
strategy and activity within the
organization 2.5 As something else.
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Supply Chain Participants
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SCM promotes competitive advantage in the
marketplace

• Simply stated, SCM can help an organization move
  materials, product, and information BETTER,
  FASTER, and CHEAPER than their competition.
• SCM provides valuable opportunities to
• develop collaborative, trusting relationships
• rationalize product touch points
• drive out costs and achieve tremendous
  efficiencies
• improve customer satisfaction

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if it is properly implemented
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and obstacles are overcome
Challenges
Pitfalls
1. Inefficient process design 2. Uncoordinated/
ineffective network operations 3. Inadequate or
wrong information 4. Inappropriate performance
measurements
1. Network complexity 2. Incompatible goals
among SC members 3. Unsynchronized supply and
demand 4. Lack of history and relationships
1. Segment Customers Based on Service Needs 2.
Customize the Logistics Network 3. Drive
Operations From Demand 4. Differentiate Product
Closer to the Customer 5. Source Strategically
6. Develop Supply Chain-Wide Technology
Strategy 7. Use Supply Chain Spanning
Performance Measures
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Multiple SCM benefits

• Properly implemented SCM promotes.

Product visibility Control and
consistency Total cost reduction Customer
satisfaction
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can be accomplished simultaneously

• Review the results for a supply chain that weve
  seen

Reduced cost Quicker delivery Less product
waste Happier customers Better planning Faster
payment
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SCM In Summary

• What It Is Not ...
• Silver Bullet
• Flavor of the Month
• Applicable to everything
• Simple replacement or modified version of
  pre-existing, interfirm relationships

• What It Is ...
• A customer focused framework
• Facilitating strategy to integrate logistics,
  manufacturing, and customer service
• Challenging
• Time consuming

Source Adapted from Coopers and Lybrand
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Logistics A Key SC Process
Logistics is so critical to Wal-Mart, and the
fact that David Glass has that background is a
plus -- logistics is one of the biggest
competitive advantages they have."
Securities Analyst
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Logistics Defined

• Frazelle text
• The flow of material, information, and money
  between consumers and suppliers
• Council of Supply Chain Mgt Professionals
• Logistics is that part of the supply chain
  process that plans, implements, and controls the
  efficient, effective flow and storage of goods,
  services, and related information from point of
  origin to point of consumption in order to meet
  customers requirements.

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What does logistics involve? the coordination
and management of interdependent functions
LOGISTICS
Customer Response
Fulfillment
Transportation
Inventory
Supply
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Where did logistics come from?
Integrated logistics
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Whats the logistics-SCM link?
Global Logistics
Supply Chain Logistics
Corporate Logistics
Scope and Influence
Facility Logistics
Workplace Logistics
1950s 1960s 1970s 1980s 1990s
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Why has logistics gained importance?

• Provides value through time and place utility
• Time utility products are available when needed
  by customers (e.g., plywood before hurricanes)
• Place utility products are available where
  needed by customers (e.g., bathing suits in
  Miami, not Anchorage)
• Promotes activity integration within across
  firms
• Serves as the link between corporate departments
• Requires cross-company cooperation
• Generates demand
• Superior service can result in increased sales
• Promotes efficiency and profitability
• Reducing cost while increasing service

Service Impacts
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Why has logistics gained importance?
Financial Impact Logistics costs have risen to
the point where companies can no longer afford to
ignore them
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Why has logistics gained importance?

• Past
• Large manufacturers conceived of and implemented
  innovations
• Today
• Retailers and consumers hold the power
• Increased demands which translate into logistics
  requirements for manufacturers
• Innovation brought about by retailers but
  implemented by manufacturers

Key Players New Focus
Logistics departments must provide top quality
service AND control costs
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The Role of Logistics in SCM

• Facilitate the flows
• Provide inventory visibility
• Promote supply chain efficiency
• Lower landed cost of goods
• Eliminate duplication
• Create customer satisfaction
• On-time, every time