1. CHAPTER 18
Measuring and Selling the Value of Logistics
2. Formulate a strategic
logistics planDetermine supply chain
structure alternatives
and evaluateSelect supply chain
structureFormulate supply chain
objectives and strategyEvaluation of consumerPossible target
markets (market grid)Evaluation of target
market(s)Selection of target
market(s)Company strengths
and weaknessesPossible target
markets (market grid)Possible target
markets (market grid)New productInadequate
performanceGovernment (political and legal environment)Corporate
objectives and
strategyMarketing
objectives and
strategyCompetitiveSocial and economicMotivation
Perception
Learning
Personal
Background
specialized
education
role orientation
lifestyleManager’s
perceptual
screenEvaluative
criteriaProgram other marketing
Mix componentsProductPricePromotionPlaceDistortionFigure 18-1Aa
3. Generate alternatives re
specific supply chain
membersWill a change in
supply chain structure
suffice?Evaluate/select individual
supply chain membersMeasure and evaluate
performance
Is supply chain
structure change required?
Can performance
be improved?Satisfactory?TechnologicalNoYesNoNoNoYesYesYesCBDFigure 18-1 cont. 18-2 b
4. Components of the Strategic Logistics PlanManagement overview
Statement of the logistics objectives
Description of the individual customer service, inventory, warehousing, order processing and transportation strategies
Outline of the major logistics program or operational plans
Forecast
Logistics financial statement
Description of the business impact of the logistics strategy18-3
5. Four Categories of Variables Must Be IdentifiedCustomer service effectiveness
Logistics efficiency
Utilization of assets
Competitive practices18-4
6. Making Logistics DecisionsCorporate objectives and strategy
Marketing objectives and strategy
Supply chain objectives and strategy
Customer service requirementsMake/buy
Number/location/size of facilities
Transport modes
Degree of automation
Facility layout/design
Organization
Supplier/customer linkageSite selection
Inventory deployment
Carrier/vendor selection
Systems capabilities
Roles and responsibilities
StrategicStructuralFunctionalOperationalOperating policies
Operating control rules
Operating procedures
Routing and scheduling
Logistics decisions are generally made hierarchically, but in iterative manner.Source: William C. Copacino, Andersen Consulting, 2000. All rights reserved by the author.. 18-5
7. Logistics Strategy Integrates Eight Key AreasCustomer
serviceInformation technologyOrganization and
change managementWarehouse
design and
operationsTransportation
managementMaterials
managementChannel
designNetwork
strategy18-6
8. Corresponding Questions Representing Each of the Key AreasWhat are the service requirements for each customer segment?
How can operational integration be achieved among the various supply chain members?
What is the supply chain structure that best minimizes costs and provides competitive levels of service?
What materials handling/storage technologies will facilitate attaining the service objectives with optimum levels of investment in facilities and equipment?a18-7 a
9. Corresponding Questions Representing Each of the Key Areas (cont.)Are there opportunities to reduce transportation costs in both the short run and the long run?
Can current inventory management procedures support more stringent service demands?
What information technology is required to gain maximum efficiency in logistics operations?
How should resources be organized to best achieve service and operating objectives? b18-7 b