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8 Logistics_Short.pptx
- 2. Introduction
Logistics management – That part of supply chain management that
plans, implements, and controls the efficient, effective forward and
reverse flow and storage of goods, services, and related information
between the point of origin and the point of consumption in order
to meet customers’ requirements. © CSCMP – Council of Supply Chain Management Professionals
Copyright © 2016 Pearson Education, Inc. 8-2
- 3. Introduction
Logistics Management Activities
Transportation
Warehousing
Material handling
Packaging
Inventory management
Logistics information systems
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- 4. Logistics Decision Areas
Five Transportation Modes
Highway
Water
Air
Rail
Pipeline
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- 5. Logistics Decision Areas
Highway
Dominates the U.S. logistics infrastructure due to:
Geographic extension of supply chains
Greater emphasis on delivery speed and flexibility
Continues to grow because it is one of the most flexible modes of transportation
Very few goods are moved without highway transportation at some point in transit
Has become more cost effective over time due to:
Better scheduling and use of vehicle capacity
More efficient and reliable vehicles
Increased cost competition due to deregulation
Involves different types of shipments
Direct truck – Shipment made with no stops
Less than truckload (LTL) – Smaller shipment combined with other loads
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- 6. Logistics Decision Areas
Water
Ideal for materials with high weight-to-value ratio, especially if delivery speed is
not critical.
Examples of these materials include farm produce, timber, petroleum-based
products.
Has one of the lowest ton-mile rates of any mode which helps to keep costs
down.
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- 7. Logistics Decision Areas
Air
Ideal for customers with a low weight-to-value ratio, especially if delivery speed
or delivery reliability is critical.
Is the least-used mode in terms of tons and ton-miles.
Higher shipping costs and improvement in other modes have reversed the rise
in air growth over the past decade.
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- 8. Logistics Decision Areas
Rail
Has characteristics similar to water transportation but is somewhat more
flexible.
To accommodate growth, rail carriers have doubled the number of lines along
busy corridors, changed the physical configuration of the trains, and utilized
multimodal solutions.
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- 9. Logistics Decision Areas
Warehousing – Any operations that stores, repackages, stages, sorts,
or centralizes goods or materials.
Warehousing can be used to:
Reduce transportation costs
Improve operational flexibility
Shorten customer lead times
Lower inventory-related costs.
Copyright © 2016 Pearson Education, Inc. 8-9