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f the area.28 What is logistics ??Once upon the time ……At the early times:w Consumption and production take place within a very limited geographic region29As progression of the economic standards ……226。 consumption and production began to separate geographically216。Regions could specialize in those modities that could be produced most efficiently216。Excess production could be shipped economically to other producing or consuming areas216。Needed good not produced locally were imported216?!?26。 This exchange process follows The principle of parative advantage and regional division30Logistics……226。 is needed when there exist space lag and/or time lag between production and consumption of goods226。 provides the bridge between production and market location226。 creates values – for both customers and suppliers Space value (eg. by transportation … )? Time value (eg. by inventory… )31Logistics management… to get the right goods/services in the right quantity/level, to the right place, at the right time, with the right cost. The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements. Council of Logistics Management 5R principle !!!32Some data about logistics management in small panieswEvery pany has its own logistics service systemw70% invalid logistics operationswPublic logistics resource and infrastructure is wasted and occupied without valuewOverall efficiency is lowIntegration is the way out 33From Logistics Management to SCMw Logistics management also deals with a logistics work, or a supply chain. But its objective is to minimize cost while to satisfy the demand (on time). w Supply Chain Management is to maximize the benefit in long term through cooperation and coordination.34Supply chain: 3 Flows 35Strategies for SCMwAll of the advanced strategies, techniques, and approaches for Supply Chain Management focus on:216。Global Optimisation216。Managing Uncertainty36Global OptimisationwWhat is it?wWhy is it different/better than local optimisation?wWhat are conflicting supply chain objectives?wWhat tools and approaches help with global optimisation?37Procurement PlanningManufacturingPlanningDistributionPlanning DemandPlanningSequential OptimisationSupply Contracts/Collaboration/Information Systems and DSSProcurement PlanningManufacturingPlanningDistributionPlanning DemandPlanningGlobal OptimisationSource: Duncan McFarlaneSequential vs Global Optimisation38Why is Global Optimisation Hard?w The supply chain is plex216。National Semiconductorw Different facilities have conflicting objectivesw The supply chain is a dynamic system216。The power structure changes Increasing customer power leads to increased demands on retailers Increased retailer power leads to increased demands on suppliersw The system varies over timew Many problems are new216。Inplete understanding of issues216。Methodology is rather narrow3