tailieunhanh - Lecture Logistics theory - Lecture 2: Logistics concepts and supply chain

Lecture 2 - Logistics concepts and supply chain. At the end of this lecture, students should be able to: understand the various concepts of logistics, understand the main logistics elements, understand the supply chain management concept, differentiate supply chain from logistics management. | LOGISTICS CONCEPTS AND SUPPLY CHAIN Learning outcomes At the end of this lecture, students should be able to Understand the various concepts of logistics Understand the main logistics elements Understand the supply chain management concept Differentiate Supply chain from Logistics management Gohoho Emmanuel Sena 3 LOGISTICS CONCEPTS Trade-off/Total Cost Value Added Lead Time Outsourcing Just in time Integration/linkage (backward/forward) Total costs concepts One of the main aims of logistics is to: “minimise the total cost of doing business rather than the cost of doing individual activities” LOGISTICS COSTS CONCEPTS Total costs cont’d Total logistics costs consider the whole range of costs associated with logistics, which includes transport and warehousing costs, inventory carrying, administration and order processing costs. Any change made in one aspect of an organisation is likely to have an effect on the cost of other aspects and in effect, the overall cost because - the . | LOGISTICS CONCEPTS AND SUPPLY CHAIN Learning outcomes At the end of this lecture, students should be able to Understand the various concepts of logistics Understand the main logistics elements Understand the supply chain management concept Differentiate Supply chain from Logistics management Gohoho Emmanuel Sena 3 LOGISTICS CONCEPTS Trade-off/Total Cost Value Added Lead Time Outsourcing Just in time Integration/linkage (backward/forward) Total costs concepts One of the main aims of logistics is to: “minimise the total cost of doing business rather than the cost of doing individual activities” LOGISTICS COSTS CONCEPTS Total costs cont’d Total logistics costs consider the whole range of costs associated with logistics, which includes transport and warehousing costs, inventory carrying, administration and order processing costs. Any change made in one aspect of an organisation is likely to have an effect on the cost of other aspects and in effect, the overall cost because - the individual activity costs are related. Costs trade-off analysis A useful tool that aims at minimising total costs is cost trade-off analysis different combinations of all cost elements should be sought, analysed and compared so that the optimal portfolio can be identified For instance. analysis by the logistics department of a company proves that moving the production plant of an organisation from one area to another may reduce labour production cost but at the same time increase transportation costs. if the cost saved in labour results in a reduction in the total logistics cost of the business then the decision to take advantage of cheap labour is worth considering. Gohoho Emmanuel Sena 8 Value added It is the marginal enhancement to a product/service at each stage of the value chain (logistics chain) till the final product is completed. Virtually, all value-added activities contribute to the cost build-up of the final product. For example the production of a coca cola may start at GHC1 at .