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DevelopingaLogisticsPerspectiveasPartof

SupplyChainManagementMarthaC.CooperProfessorofLogisticsDepartmentofMarketingandLogisticsTheOhioStateUniversityModernLogistical&EconomyDevelopmentInternationalForum

October23-25,2001OverviewWhatIsSupplyChainManagement?IsSupplyChainManagementMoreThanSimplyaNewNameforLogistics?

WhatistheRoleofLogisticsintheDomesticEconomy?WhatistheRoleofLogisticsintheGlobalEconomy?SummaryLOGISTICSMANAGEMENTDEFINED….the

processofplanning,implementing,andcontrollingtheefficient,effectiveflowandstorageofgoods,services,andrelatedinformationfromthepoint-of-origintothepoint-of-consumptioninordertomeetcustomers'requirements.CouncilofLogisticsManagement,19861998CLMDEFINITIONOFLOGISTICS….isthatpartofthesupplychainprocessthatplans,implements,andcontrolstheefficient,effectiveflowandstorageofgoods,services,andrelatedinformationfromthepoint-of-origintothepoint-of-consumptioninordertomeetcustomers'requirements.CouncilofLogisticsManagement,1998;www.CLM1.orgFigure1SUPPLYCHAINMANAGEMENT:

IntegratingandManagingProcessesAcrosstheSupplyChainSupplyChainBusinessProcessesTier1SupplierTier2SupplierLogisticsPurchasing

Marketing&SalesR&DCustomerConsumer/End-userCUSTOMERRELATIONSHIPMANAGEMENTCUSTOMERSERVICEMANAGEMENTDEMANDMANAGEMENTORDERFULFILLMENTMANUFACTURING

FLOW

MANAGEMENTPROCUREMENTPRODUCT

DEVELOPMENT

AND

COMMERCIALIZATIONRETURNSPRODUCTFLOWProductionFinanceManufacturerInformationFlowSource:DouglasM.Lambert,MarthaC.Cooper,andJanusD.Pagh,“SupplyChainManagement:ImplementationIssuesandResearchOpportunities,”TheInternationalJournalofLogisticsManagement,Vol.9,No.2,1998,p.2.www.IJLM.orgCOSTTRADEOFFSREQUIREDINMARKETINGANDLOGISTICSProductPriceMarketingObjective:LogisticsObjective:Allocateresourcestothemarketingmixinsuchamannerastomaximizethelong-termprofitabilityofthefirm.MinimizeTotalCostsgiventhecustomerserviceobjectivewheretotalcosts=TransportationCosts+

WarehousingCosts+OrderProcessingandInformationCosts+LotQuantityCosts+InventoryCarryingCostsPromotionPlaceCustomerServiceLevelsInventoryCarryingCostsTransportationCostsWarehousingCostsOrderProcessingandinformationCostsLotQuantityCostsLogisticsMarketingSource:Lambert,DoublesM.,JamesR.Stock,andLisaM.Ellram,FundamentalsofLogisticsManagement,Boston:IrwinMcGraw-Hill,1998,.Figure2SUPPLYCHAINMANAGEMENTFRAMEWORK:ElementsandKeyDecisions2)Whatprocessesshouldbelinkedwitheachofthesekeysupplychainmembers?1)Whoarethekeysupplychainmemberswithwhomtolinkprocesses?3)Whatlevelofintegrationandmanagementshouldbeappliedforeachprocesslink?SupplyChainBusinessProcessesSupplyChainNetworkStructureSupplyChainManagementComponentsSource:DouglasM.Lambert,MarthaC.Cooper,andJanusD.Pagh,“SupplyChainManagement:ImplementationIssuesandResearchOpportunities,”TheInternationalJournalofLogisticsManagement,Vol.9,No.2,1998.www.IJLM.orgCommunicationandInformationFlowFacilityStructureWorkFlow/ActivityStructureOrganizationStructureProductFlowFacilityStructurePlanningandControlMethodsPhysical&TechnicalManagementComponentsManagementMethodsPowerandLeadershipStructureRiskandRewardStructureCultureandAttitudeManagerial&BehavioralManagementComponentsFigure4SupplyChainManagement:FundamentalManagementComponentsSource:DouglasM.Lambert,MarthaC.Cooper,andJanusD.Pagh,“SupplyChainManagement:ImplementationIssuesandResearchOpportunities,”TheInternationalJournalofLogisticsManagement,Vol.9,No.2,1998,p.11.www.IJLM.orgIndexofBusinessLogistics

CostsAsAPercentofGDP1980-2000405060708090100110120198019811982198319841985198619871988198919901991199219931994199519961997199819992000Year1980=100InventoryTransportationTotalRobertV.DelaneyandRosalynWilson,"StateofLogisticsReport"©,June4,2001,co-sponsoredbyCassInformationSystemsandProLogis.Seewebsitecass@,Delaney’sDugout.Figure5InventoriesAreDrawnDownSharplySource:BusinessWeek,May14,2001Data:CommerceDept.-20BillionsofChainWeightedDollars020406080ChangesInInventories‘00I‘01IIIIIIIVRobertV.DelaneyandRosalynWilson,"StateofLogisticsReport"©,June4,2001,co-sponsoredbyCassInformationSystemsandProLogis.Seewebsitecass@,Delaney’sDugout.Figure7LogisticsInfrastructureConsiderationsTransportationWarehousingCustomerServiceInventoryControlInformationInfrastructureWhatistheRoleofLogisticsintheGlobalEconomy?SameIssuesasDomesticInformationTransportationTheRoleofLogisticsinPostponementandSpeculationStrategiesFigure8

THEP/S-MATRIXAND

GENERICSUPPLYCHAINP/S-STRATEGIESSource:JanusD.PaghandMarthaC.Cooper,“SupplyChainPostponementandSpeculationStrategy:HowtochoosetheRightStrategy,”JournalofBusinessLogistics,Vol.19,No.2,1998,pp.13-33.Figure9

ILLUSTRATIONOFTHEFULL

SPECULATIONSTRATEGY

Source:JanusD.PaghandMarthaC.Cooper,“SupplyChainPostponementandSpeculationStrategy:HowtochoosetheRightStrategy,”JournalofBusinessLogistics,Vol.19,No.2,1998,pp.13-33.Figure11

CONTINUUMOFP/S-STRATEGIES,

ANDPOSITIONINGOFTHECASE-EXAMPLES

Source:JanusD.PaghandMarthaC.Cooper,“SupplyChainPostponementandSpeculationStrategy:H

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