Logistic and Supply Chain

Individual Class SCM William Budiharsono

Logistics
An activity of managing material flow (as in supply of physical product) from source (supplier) to distribution center (store facility and distribution point) to the stores (retailer). This activity will based on demand data from customer procurement supplier vs. supply data from supplier to retailer.

Supply Chain
Definitions:
o A supply chain is a network of partners who collectively convert a basic commodity (upstream) into a finished product (downstream) that is valued by end-customers, and who manage returns at each stage.

Logistic Vs. Supply Chain

Supply chain are actually an integrations of several logistics operation forming a network of material and information flow of whole process from raw material to manufacturer to distribution channel to end user. In other words, logistic is a part of supply chain.

Example of Supply Chain Flow

Tier System in Supply Chain

Network of Supply Chain

Case: Confectionary Manufacturer

Material and Information Flow

Material flow from raw material supplier to end-user are planned and controlled used the demand from end-user. Forming a network of linked information that integrated and interdepended.

How Logistics and Supply Chain Influence

Organizational Competitiveness
As explained before: a product holds components that supplied through the network. Ease on supply to production to ensuring product availability in the market is the key objective of supply chain. Meeting end-customer demand through supplying what is needed in the form it is needed, when it is needed, at a competitive cost.

Hard Objectives
Quality (quantities, specifications) Time (speed, responsiveness) Cost

Variability in Hard Objective

on time (percentage of orders delivered on time, and the variability against target); in full (percentage of orders delivered complete, and the variability against target); on quality (percentage of defects, and the variability against target).

Uncertainty in Supply Chain

Nokia Case Study Proactive: to create the capability in advance to handle uncertainty for example, Toyotas countermeasures. Reactive: to cope with uncertainty in a focal firms internal or external environment for example, Nokias response to the fire at Philips.

Soft Objectives
confidence: queries answered promptly, courteously and efficiently; security: customers information and property treated in a confidential and secure manner.

Order Winners and Qualifiers

Example for soft objectives

Logistic Strategy

Setup Strategy
How deliberate are the processes of strategy setting? These can range from clearly and carefully planned to a series of ad hoc decisions taken on a day-to-day basis. What are the goals of strategy setting? These can range from a focus on maximizing profit to allowing other business priorities such as sales growth to be included.

Factor in Strategy
Evolve Classical Accommodate Systemic

Aligning Strategy
A unique value proposition A tailored supply chain Identify the trade-offs Align logistics processes Continuity