Measuring Performance Powerpoint Presentation
Isaac Perry
logistics_presentation.pptxTopic 6 – Logistics and Supply Chain Management
A – The Role and Function of Logistics
B – Value Chains
C – Distribution Systems
GS 120 – iGlobalization: Moving The Things We Buy
Professor: Dr. Jean-Paul Rodrigue
Hofstra University, Department of Global Studies & Geography
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A – The Role and Function of Logistics
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Logistics Goals and Operations
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Fulfillment (Goals)
Order
Right product
Right quantity
Delivery
Right location
Quality
Cost
Right time
Right condition
Right price
Demand (Operations)
Transportation
Handling
Packaging
Stock Management
Production scheduling
Orders Processing
Warehousing
Sales
Purchase
Value-Added Functions and Differentiation of Supply Chains
Value-Added Functions
Supply Chain Differentiation
Production Costs
Location
Time
Control
Logistics Costs
Transit Time
Reliability
Risk
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Taxonomy of Logistics Decisions
| Level | Description |
| Production structures | Commercial decisions on outsourcing, offshoring and sub-contracting. Number, location and capacity of production units. |
| Transport structures | Choice of a freight network linking a company and its suppliers and customers. Choice of modes and terminals; the transport chain. |
| Distribution structures | Choice concerning the number, location and capacity of distribution centers. Frequency and timing of distribution (e.g. just-in-time). |
| Logistics structures | Usage of production, transport and distribution capabilities to fulfill short, medium and long term strategies (e.g. lower costs, gain market share, improve service efficiency, reduce response time, reduce environmental footprint). Usage of third party logistics providers. |
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Source: adapted from McKinnon, A.C. (1998) “Logistical Restructuring, Freight Traffic Growth and the Environment”, in D. Banister (ed) Transport Policy and the Environment, London: Routledge.
Logistical Improvements, Manufacturing Sector, 1960s to 2010s
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Source: Logistics Management & Distribution, 1999. http://www.logisticsmgmt.com/
Cycle time: The amount of time required from receipt of an order from a customer to shipment of the completed goods.
1960s 1970s 1980s 1990s 2000s 2010s 35 25 7 4 3 2
% of GDP
Days
Worldwide Logistics Costs, 2002
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Source: Adapted from P.O Roberts, Supply Chain Management: New Directions for Developing Economies, http://www.worldbank.org/html/fpd/transport/ports/trf_docs/new_dir.pdf
Transportation Warehousing Inventory C arrying Order Processing Administration 39 27 24 6 4
From Push to Pull Logistics
Supplier
Supplier
Supplier
Manufacturer
Customer
Distributor
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Manufacturer
Distributor
Customer
3PL
Returns / Recycling
Point-of-sale data
Freight flow
Push
Pull
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Layers to Logistics Services
Manufacturing, Retailing
Transportation
Logistics
Supply chain management
Cargo owners
Carriers
Logistics service providers
Lead logistics providers & consultants
Supply chain integration
Actors
Services
Service integration
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1PL
2PL
3PL
4PL
Logistic Performance Index, 2010
Source: adapted from World Bank, Logistics Performance Index, http://info.worldbank.org/etools/tradesurvey/mode1b.asp
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B – Value Chains
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The Commodity Chain (or Value Chain)
Transport Chain
Raw
materials
Manufacturing
and assembly
Distribution
Bulk shipping
Unit shipping
High volumes
Low frequency
Low volumes
High frequency
LTL shipping
Average volumes
High frequency
1- Commodities
3- Final Goods
2- Intermediate Goods
Attributable to climatic (agricultural products, forestry products) or geological (ores and fossil fuels) conditions.
Transformation that confers added value. Metals, textiles, construction materials and parts used to make other goods.
Goods shipped to large consumption markets. Flow and inventory management.
Stages
Market
Flows
Market
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Commodity Chains and Added Value
Commodity chain
Added value
Low
High
Manufacturing
R&D
Fabrication
Distribution
Design
Branding
Marketing
Sales / Service
Concept
Logistics
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Source: Adapted from the Stan Shih “Smile Curve” concept.
Product Life Cycle
Sales
Stage 1
Stage 2
Stage 3
Monopoly
Competition
Research and
development
Maturity
Decline
First competitors
Mass production
Innovating firm
Competitors
Growth
Stage 4
Promotion
Idea
Obsolescence
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APL Logistics Freight Distribution Center, Shenzhen, PRC, December 2005
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APL (American President Lines; the term is always used as an acronym since the company is of foreign ownership) is owned by a Singapore maritime shipper (Neptune Orient Lines; NOL). It is the world 6th largest container shipping company. We are here at the intermediate stage of global commodity chains after manufacturing has taken place, but only early in the distribution process and well before retailing to the final consumer. The gigantic warehouse is organized as a cross-docking DC where freight is delivered on one side, sorted and shipped on the other side. The goods stay in the warehouse for a few days at most and often for less than 24 hours.
Container Waiting to be Loaded, APL DC - Shenzhen
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All the shipments are consolidated in containers, or batches of containers. This is the main purpose of the DC; the opposite of its counterparts in North American and Western Europe where freight shipments are decomposed in LTL batches.
Extended Distribution Center System of JVC Belgium
Palletization of “Floor Loaded” Shipments, Belgium
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C – Distribution Systems
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Types of Supply Chain Facilities
Fabrication
Storage
Distribution
Heavy manufacturing
Light manufacturing
Cold Chain
Bulk warehouse
Rack-supported warehouse
Cross-docking
Multitenant
Regional warehouse
Air cargo
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Optimal Location and Throughput by Number of Freight Distribution Centers
Source: Adapted from Chicago Consulting. http://www.chicago-consulting.com/10best.shtml
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Cross-Docking Distribution Center
Suppliers
Customers
Receiving
Shipping
Sorting
LTL
Suppliers
Customers
FTL
FTL
Cross-Docking DC
Distribution Center
Before Cross-Docking
After Cross-Docking
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Retail Logistics and E-commerce
Retailer
(In store inventory)
Suppliers
E-Retailer
Customers
Customers
Suppliers
RDC
Conventional Retail Logistics
Travel to
store
Online
purchases
Store Deliveries
E-commerce Retail Logistics
Home
Deliveries
Parcel Delivery
Company
RDC
Regional
Distribution
Center
Order
RDC
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UPS handles 9 million parcels per day created by e-commerce. Reduce costs, such as process and transaction. Could reduce the cost of making a car by 14%. Paradox of trimming of the supply chain. Complexity of distribution.
Order-Delivery Sequence of an Apple iPad
Note: Path is approximate
Order Fulfillment (Cycle time of 12 days 18hrs 08min)
Order placed online
3hrs 34min
Order processed
12 days 15hrs 34min
Shipment notification
Delivery (Lead time of 48hrs 11min)
2hrs 45min
Shipment notification
Shipment picked up
4hrs 23min
Leaving local DC
7hrs 34min
At Hong Kong hub
17hrs 04min
At Anchorage hub
1hr 57min
Cleared customs
1hr 22min
Left Anchorage hub
6hrs 03min
At Newark hub
4hrs 00min
Left Newark hub
1hr 11min
At local DC
2hrs 48min
Delivered
Consolidation (Shenzhen/HK)
Transfer (Anchorage)
Deconsolidation (NY Metro)
Note: Based on the FedEx tracking of an online purchase of an iPad in July/August 2010. Source: Apple Store and FedEx. The sequence is derived from one observation and does not necessarily represent the usual performance.
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Logistic Activities and their Green Dimensions
Consumers
Producers
Distributors
Collectors
Recyclers
Reverse Channel
Suppliers
Forward Channel
Forward and Reverse Distribution
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Product Design and Production Planning
Product design
Physical Distribution
Certified distribution facilities
Materials Management
Packaging
Near sourcing
Sustainable sourcing
Load consolidation
Alternative modes and fuels
Recyclable outputs (waste management)
Recycled inputs
Certified carriers
Packaging with Less Footprint
The containers for 75-watt EcoSmart LED bulbs have been redesigned to use less packaging.
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Operational Conditions of Cold Chain Logistics
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Conditional demand
Each product has a specific perishability.
Demand conditional to qualitative attributes.
Load integrity
Reefers as the common load unit.
Empty backhauls.
Transport integrity
Uninterrupted integrity of the transport chain (modes, terminals and DC).
Specialized modes (speed) and terminals?
Packing, packaging and preparation.
Shelf life and revenue.
Temperature Standards for the Cold Chain
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Source: Gesamtverband der Deutschen Versicherungswirtschaft e.V. (GDV), Berlin 2002-2007. http://www.tis-gdv.de/tis_e/ware/inhaltx.htm
Degrees Celcius
Shelf Life of Selected Perishable Food Products
| Product | Shelf Life (Days) | Optimum Temperature (Celsius) |
| Apples | 90-240 | 0 |
| Bananas | 7-28 | 13.5 |
| Bell Peppers | 21-35 | 7 |
| Cabbage | 14-20 | 1 |
| Eggs | 180 | 1.1 |
| Onions | 30-180 | 1 |
| Lettuce | 12-14 | 0.6 |
| Fresh Meat (beef, lamb, pork, poultry) | 14-65 | -2 |
| Oranges | 21-90 | 7 |
| Pears | 120-180 | -0.6 |
| Potatoes | 30-50 | 10 |
| Seafood (shrimp, lobster, crab) | 120-360 | -17.8 |
| Strawberries | 5-10 | 0.6 |
| Tomatoes | 7-14 | 12 |
Various other factors are also at play in addition to temperature, including moisture and ethylene sensitivity.
Source: adapted from APL and http://www.completeproduce.com/html/shelflife.html
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Lettuce Shelf Life by Storage Temperature
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Temperature (Celsius)
Shelf Life (Days)
Seaborne Reefer Trade, 2008
Source: Drewry Shipping Consultants (2010), Reefer Shipping Market 2010/11, Drewry Publishing, London
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Bananas Citrus Deciduous Fruit Exotics Fish & Seafood Meat Dairy Other 0.2 7.0000000000000007E-2 0.1 0.03 0.19 0.24 0.03 0.14000000000000001
Reefer Stacking Area, Maher Terminal, Newark
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Grocery Chain Cold Storage Facility, Regina
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Subtropolis Distribution Center, Kansas City
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