Chapter 1 an overview of logistics Logistics International Trade

IBS3002 Logistics & International Trade
Introduction to the course
Course overview:
Provide fundamental knowledge on international logistics in the global
context
Analyze activities of logistics in international trade
Understand the impacts of environment on international logistics and
international logistics security
Understand issues occurring in logistics enterprises in international trade
Contemporary logistics, Murphy (2015) & International
logistics, David (2011)
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Introduction to the course
Learning materials:
Contemporary Logistics; 11th Edition; Paul R. Murphy, Jr., A. Michael
Knemeyer; Prentice Hall (2015)
International Logistics: The Management of International Trade
Operations; 3rd Edition ; Pierre David and Richard Stewart, Cengage
Learning (2011)

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Introduction to the course

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Introduction to the course

Assessment:

20%

Participation + Contribution + Mid term exam

20%

Group discussion & presentation

60%

Final exam

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Introduction to the course
Wee
Content
k
1
Introduction to the course
Chapter 1 – An overview of logistics
2
Chapter 1 – (cont)
3
Chapter 2 – Logistics & information technology
4
Chapter 3 – Demand management, order management &

customer service
5
Chapter 3 – (cont)
6
7
8
9
10
11
12
13
14
15

Chapter 4 – Inventory management
Chapter 4 – (cont)
Chapter 5 – Warehouse management
Chapter 5 – (cont)
Chapter 6 – Packaging for export & material handling
Chapter 6 – (cont)
Chapter 7 – International logistics
Chapter 7 – (cont)
Presentation & group discussion
Presentation & group discussion

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Introduction to the course

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IBS3002 Logistics & International Trade

Chapter 1
An overview of logistics

Contemporary logistics, Murphy (2015) & International
logistics, David (2011)
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Topic areas


Logistics & international logistics



Logistics & supply chain



Logistics adds value



Logistical relationships with the firm



Logistics activities



Infrastructure of international logistics

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Logistics
 Definition: is a part of the supply chain process that plans, implements
and controls the efficient and effective flow and storage of resources
from the point of origin to the point of consumption in order to meet
the final customer’s demands
 Objective: how to get resources in the right quantity, at the right
location, and at the right time?

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Phạm vi và ảnh hưởng

The historical development of logistics

Global
Global
logistics
logistics

Supply
Supply
chain logistics
chain logistics
Corporate
Corporate
logistics
logistics
Facility
Facility
logistics
logistics
Workplace
Workplace
logistics
logistics

1950

1960

1970

1980

1990

2000

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The historical development of logistics
1. Workplace logistics
- The flow of materials within a single workstation
- Objective: to streamline the movements of an individual working at a
machine or along an assembly line
- The principles and theory of workplace logistics were developed by the
founders of industrial engineering workers in WWII ad post WWII factory
operations
2. Facility logistics
- The flow of materials between workstations within a facility (factory,
terminal, warehouse, distribution center) -> inter workstation, intrafacility
- The roots of facility logistics was in the mass production and assembly
lines that distinguished the 1950s and 1960s. Many organizations
maintained material-handling departments (1970s)
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The historical development of logistics
3. Corporate logistics
- The flow of materials and information between the facilities and
processes of a corporation (inter workstation, inter-facility, intra-corporate)
- Corporate logistics is sometimes associated with the phrase physical
distribution that was popular in the 1970s
4. Supply chain logistics
- The flow of materials, information and money between corporations
(inter workstation, inter-facility, inter-corporate and intra chain)
5. Global logistics
- The flow of materials, information and money between countries

- Global logistics connects our suppliers’ suppliers with our customers’
customers internationally
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The historical development of logistics
5. Global logistics

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The increased importance of logistics
 A reduction in economic regulation
- Deregulation relaxed government control of carriers’ rates and fares,
entry and exit, mergers and acquisitions… in 1970s, 1980s ->
competitive price and flexibility in service in logistics
 Changes in consumer behavior
- Customized customer, changing family
expectations… -> logistical implications

roles,

rising

customer

 Technological advances
- Technological advances improve the productivity of channel design,
order picking process, shipment tracking -> impact logistics
management

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The increased importance of logistics
 The growing power of retailers
- Appearing Big-box retailers - stores both floor space and products for
sale (Walmart, Costco…) -> growing power of retailers
- Powerful retailers such as Wal-Mart, Home Depot, Best Buy have large
market share and low costs and they have superior logistics. Applying
CPFR (Collaborative Planning, forecasting, replenishment) initiatives –
trading partners share planning, forecasting data to better match up
supply & demand. For this reason they are considered as “trendsetters” of logistics.
 Globalization of trade
- Growth in world trade
- Globalization of logistics services
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The system & total cost approaches to logistics

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The system & total cost approaches to logistics

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The system & total cost approaches to logistics

- System approach: indicates that a company’s objectives can be
realized by recognizing the mutual interdependence of the major
functional areas (marketing, production, finance and logistics) of the
firms
- Implications of the system approach:
+ One logistics system does not fit all companies
+ Stock-keeping units (SKUs): each different type or package size of a
good is a different SKU -> the proliferation of SKUs means more items to identify,
store, and track.
- Intrafunctional logistics – coordinating inbound logistics, materials
management, and physical distribution in a cost-efficient manner that
supports an organization’s customer service objectives.
- Inbound Logistics: Movement and storage of materials into the firm.


The system & total cost approaches to logistics
- Materials management: movement and storage of materials within a
firm
- Physical distribution: storage of finished product and movement to the
customer
- Total cost approach: coordinate materials management and physical
distribution in a cost-efficient manner -> all relevant activities in
moving and storing products should be considered as a whole, not
individually
- Cost trade-offs: changes to one logistics activity cause some costs to
increase and others to decrease
- All relevant logistics cost items are considered simultaneously when
making decision
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Supply chain
 Supply chain: an entire system of producing and delivering a product
or service, from the very beginning stage of sourcing the raw materials
to the final delivery of the product or service to end-users. An
extended enterprise that crosses the boundaries of individual firms to
span the related activities of all the companies involved in the total
supply chain in satisfying the ultimate consumer
 Supply chain management: coordination / integration of 3 key flows
(products / materials or services, information and financials) within and
between firms in the supply chain to fulfil the final customer’s
demands through the most efficient use of resources
 Objective: fulfil customer demands through most efficient use of
resources

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Logistics & supply chain

Foundation of
SCM

Supply

Supply base rationalization, supplier alliances, SRM,
global sourcing, ethics and sustainability

Operations

Demand management, CPFR, MRP, ERP, inventory
visibility, lean systems, Six Sigma quality systems

Logistics

Logistics management, customer relationship
management, network design, RFID, global supply
chains, sustainability, service response logistics

Integration

Risk and security management, performance
measurement, green supply chains

ALL ELEMENTS DRIVEN BY DEMAND

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Logistics adds value

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Logistics adds value
Economic utility – the value or usefulness of a product in fulfilling
customer needs or wants.
•Possession utility – the value or usefulness that comes from a
customer being able to take possession of a product.
•Form utility – product’s being in a form that (1) can be used by the

customer and (2) is of value to the customer.
•Place utility – having products available where they are needed by the
customers; products are moved from points of lesser value to points of
greater value.
•Time utility – having products available when they are needed by
customers.

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Logistics adds value
The five principal types of economic utility which add value to
a product or service are:
 form

(what)

 time

(when)

 place

(where)

 quantity

(how much)

 possession (why)

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Logistical relationships within the firm

Finance

Productio
n

Marketing

Logistics

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