Logistics Lecture 4

1. Logistics
PPS5
Topic 2

2. Topic 2
Logistics management
Logistics management

3. LEARNING UNIT OBJECTIVES
•• Explain how logistics management encompasses physical distribution;
Explain how logistics management encompasses physical distribution;
•• Define “logistics management”;
Define “logistics management”;
•• Explain the objectives of logistics;
Explain the objectives of logistics;
•• Indicate where total logistics cost can be reduced;
Indicate where total logistics cost can be reduced;
•• Illustrate the various aspects that determine customer service;
Illustrate the various aspects that determine customer service;
•• Reason about the trade-offs between reduced costs and increased customer
Reason about the trade-offs between reduced costs and increased customer
service;
service;
•• Explain order processing and information systems as activities of logistics
Explain order processing and information systems as activities of logistics
management;
management;
•• Discuss the modes of transport and the factors that influence the selection of
Discuss the modes of transport and the factors that influence the selection of
transport modes;
transport modes;
•• Explain “inventory management”;
Explain “inventory management”;
•• Discuss warehousing as aalogistics activity;
Discuss warehousing as logistics activity;
•• Discuss material handling as aalogistics activity;
Discuss material handling as logistics activity;
•• Explain the concept of “integrated logistics”;
Explain the concept of “integrated logistics”;
•• Assess how logistics contribute to healthy brand practice
Assess how logistics contribute to healthy brand practice

4. Distribution vs Logistics
Logistics management – inbound and outbound
Logistics management – inbound and outbound
Physical distribution – what happens with outbound
Physical distribution – what happens with outbound
goods only
goods only

5. Logistics and physical distribution
Logistics
Logistics
Materials
Materials Materials
Materials Physical
Physical
supply management distribution CUSTOMER
CUSTOMER
supply management distribution
Manufacturing
Manufacturing
Suppliers
Suppliers Scheduling, order
Scheduling, order Field inventory
Field inventory
Inbound
Inbound processing,
processing, Outbound
Outbound
logistics
logistics materials
materials logistics
logistics
handling etc.
handling etc.

6. Physical distribution
What happens with outbound
goods as they move from the
organisation (M) to its Cs.
All activities re flow of these
materials, components, finished goods

7. Logistics and physical distribution
Logistics
Logistics
Materials
Materials Physical
Physical
Materials supply
Materials supply CC
management
management distribution
distribution
Manufacturing
Manufacturing
Suppliers
Suppliers Scheduling, order
Scheduling, order Field inventory
Field inventory
Inbound
Inbound processing,
processing, Outbound
Outbound
logistics
logistics materials
materials logistics
logistics
handling etc.
handling etc.

8. Logistics and physical distribution
Logistics
Logistics
Materials
Materials Physical
Physical
Materials supply
Materials supply CC
management
management distribution
distribution
Manufacturing
Manufacturing
Suppliers
Suppliers Scheduling, order
Scheduling, order Field inventory
Field inventory
Inbound
Inbound processing,
processing, Outbound
Outbound
logistics
logistics materials
materials logistics
logistics
handling etc.
handling etc.
PLUS STRATEGIC ISSUES I.E. TOMWI
Transportation; Order processing (including information systems);
Materials handling; Warehousing; Inventory management.

9. The logistics process
Raw materials
Raw materials Manufacturer
Manufacturer Wholesaler
Wholesaler Retailer
Retailer Customer
Customer
supplier
supplier
Transport
Transport Transport
Transport Transport
Transport Transport
Transport

10. Objectives of logistics
Improve profitability
Improve competitive performance
Two key objectives:
Happy customers
Happy customers
Costs decrease
Costs decrease
Inversely related to one another – cannot accomplish both
optimally – trade off between the 2 categories

11. Decreasing total logistics costs
1. Order processing and admin costs –
writing, receiving acknowledgement and
processing
2. Inventory related costs –in transit, in
storage or WIP
3. Transportation costs – vary depending on
mode of transport used, product and size
Trade off between the various cost factors

12. Improving customer service
C expectations and reaction
1. Order lead time to stock out …
2. Dependability Cost-income trade-off
3. Convenience Competitors’ level of
4. Inventory availability C-service
5. Factors that influence customer service levels

13. Tradeoffs between cost and C-service
100%
Service
level
Investment in inventory

14. Objectives of logistics
Decreasing total logistics
Decreasing total logistics
Increasing customer service
Increasing customer service
costs
costs
-Order processing costs
-Order processing costs Factors that influence
Factors that influence
-Inventory-related costs
-Inventory-related costs Customer service
Customer service customer service levels:
customer service levels:
-Transportation costs
-Transportation costs performance levels:
performance levels: -Customer’s
-Customer’s
-Order lead time
-Order lead time
expectations and
expectations and
-Dependability
-Dependability
reactions
reactions
-Convenience
-Convenience -Trade-offs
-Trade-offs
-Inventory availability
-Inventory availability -Competitors
-Competitors

15. Trade-off decisions when determining logistics
objectives
Reducing total logistics costs
Reducing total logistics costs Increasing customer service
Increasing customer service
vs
vs
Reduce inventory levels
Reduce inventory levels vs
vs Increase inventory levels
Increase inventory levels
Use cheaper (but slower) forms of
Use cheaper (but slower) forms of Ensure quicker delivery (but by
Ensure quicker delivery (but by
transport vs
vs using more expensive transport)
transport using more expensive transport)
Reduce unnecessary duplication of
Reduce unnecessary duplication of Provide enough information to
Provide enough information to
information vs
vs satisfy customers in the process
information satisfy customers in the process

16. GROUP ACTIVITY
ENTERPRISE RENT A CAR CASE STUDY
TNT CASE STUDY

17. ACTIVITIES OF LOGISTICS
1. ORDER PROCESSING
INFORMATION SYSTEMS
2. TRANSPORT
3. INVENTORY MANAGEMENT
4. WAREHOUSING
5. MATERIAL HANDLING

18. INFORMATION SYSTEMS
• Most Shoprite stores linked by satellite
to a central database and replenishment
system
• Every 15 minutes management knows of
every sale made in that period

19. Activities of logistics
Order
Order Inventory
Inventory Materials
Materials
Transportation
Transportation Warehousing
Warehousing
processing
processing management
management handling
handling
Modes of
Modes of Functions:
Functions:
Task of order transport:
transport: -Receiving
-Receiving
Task of order
-Rail
-Rail
processing:
processing: goods
goods Objectives:
Objectives:
- -Road
Road
-Order entry
-Order entry - -Air --Sorting goods
Sorting goods -Lowest cost
-Lowest cost
Air
--Order
Order - -Pipeline
Pipeline
--Storage of
Storage of --Max capacity
Max capacity
Objectives:
Objectives:
handling
handling - -Water
Water goods
goods --Minimum
Minimum
-Reorder point
-Reorder point
--Order delivery
Order delivery - -Intermodal
Intermodal --Filling the
Filling the handling costs
handling costs
--EOQ
EOQ order
order --Safety
Safety
Selection factors: --JIT
JIT
Information
Information Selection factors: --Dispatching
Dispatching --Quality
Quality
-Cost
-Cost --ABC analysis
ABC analysis
systems:
systems: service
service
- -Time
Time
EDI (electronic
EDI (electronic - -Access
Decisions:
Decisions:
Access
data
data - -Capability -How many
-How many Equipment
Equipment
Capability
interchange)
interchange) - -Frequency
Frequency --Types
Types
- -Reliability
Reliability --Location
Location

20. 1. ORDER PROCESSING
Customer
Customer
Checks, Place order Confirmation, Billing
Credit,
Terms etc.
Order entry
Order entry
Order
Credit
Credit delivery
Order handling
Order handling
department
department
Warehouses
Warehouses
Suppliers
Suppliers
Manufacturing
Manufacturing

21. EDI
Electronic data interchange
- Transport planning
- Order processing
- Production planning
- Inventory levels
- Account management

22. EDI - advantages
- Increased internal and external
productivity (faster feedback; shorter
lead times)
- Improved channel relationships
- Increased market opportunities
- Increased accuracy
- Decreased paperwork and operating
costs

23. 2. TRANSPORTATION

24. MODES OF TRANSPORT
RAIL
ROAD
AIR
PIPELINES
WATER
INTERMODAL

25. Factors in selecting modes of transport
You want to get to the Congo with your family ….
Cost
Cost
Time
Time
Accessibility
Accessibility
Capability
Capability
Frequency
Frequency
Reliability
Reliability

26. 3. Inventory management

27. 3. Inventory management

28. 3. Inventory management
Issues:
1.When to order (reorder point)
2.How much to order (economic order
quantity)

29. Reorder point
Look at: Other factors influencing
Other factors influencing
reorder point:
reorder point:
1.Order lead time 1.Variance of order lead
1.Variance of order lead
time
time
2.Usage rate 2.Fluctuations in C-demand
2.Fluctuations in C-demand
3.C-service standard
3.C-service standard
3.Safety stock
Reorder point ==(Order lead time xxusage rate) ++safety stock
Reorder point (Order lead time usage rate) safety stock

30. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?

31. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 200 200 200 200 = 1000 units
Safety stock = 300 units that must lie there.

32. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 200 200 200 = 800 units
Safety stock = 300 units that must lie there.

33. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 200 200 = 600 units
Safety stock = 300 units that must lie there.

34. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 200 = 400 units
Safety stock = 300 units that must lie there.

35. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 = 200 units
Safety stock = 300 units that must lie there.

36. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
= 0 units
Safety stock = 300 units that must lie there.

37. Order lead time = 5 days
Days
Usage rate = 200 units per day
1000
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 200 200 200 200 = 1000 units
Safety stock = 300 units that must lie there.

38. Order lead time = 5 days
Days
Usage rate = 200 units per day
Safety stock = 300 units
1000
What would the reorder point of certain stock item be?
200 200 200 200 = 800 units
Safety stock = 300 units that must lie there.

39. Order lead time = 5 days
Days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
1000
200 200 200 = 600 units
Safety stock = 300 units that must lie there.

40. Order lead time = 5 days
Days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
1000
200 200 = 400 units
Safety stock = 300 units that must lie there.

41. Order lead time = 5 days
Days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 = 200 units
1000
Safety stock = 300 units that must lie there.

42. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
200 200 200 200 200 = 1000 units
Safety stock = 300 units that must lie there.

43. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
Reorder point = (order lead time x usage
rate) + safety stock
= (5 x 200) + 300
= 1 300 units

44. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
Reorder point = (order lead time x usage
rate) + safety stock
= (5 x 200) + 300
= 1 300 units
What would the inventory stock level be if the supplier delivers one day
late?

45. Order lead time = 5 days
Usage rate = 200 units per day
Safety stock = 300 units
What would the reorder point of certain stock item be?
Reorder point = (order lead time x usage
rate) + safety stock
= (5 x 200) + 300
= 1 300 units
What would the inventory stock level be if the supplier delivers one day
late?
100 units

46. Order lead time = 5 days Be able to sketch
Be able to sketch
graph on page
graph on page
Usage rate = 200 units per day 187
187
Safety stock = 300 units
What would the reorder point of certain stock item be?
Reorder point = (order lead time x usage
rate) + safety stock
= (5 x 200) + 300
= 1 300 units
What would the inventory stock level be if the supplier delivers one day
late?
100 units

47. Economic ordering quantity

48. Total costs
Carrying costs
Cost
Order processing
costs
EOQ
Quantity

49. ==quantity whether the sum of the
quantity whether the sum of the
inventory carrying costs and the order
inventory carrying costs and the order
processing costs are at aaminimum
processing costs are at minimum
EOQ = 2DO/IC
D = annual demand in units
O = cost of placing order
I = inventory carrying cost as percentage of
annual inventory investment
C = cost of one unit of the product

50. EOQ = 2DO/IC
Demand = 200 000 units = annual demand = D
Cost of placing one ORDER = R200 per order = O
Unit cost of the product = R25 = C
Inventory carrying cost is 20% of the annual inventory
investment = I

51. 2 x 200 000 x 200
EOQ ==
EOQ
25 x 0.2
EOQ = 2DO/IC
Demand = 200 000 units = annual demand = D
Cost of placing one ORDER = R200 per order = O
Unit cost of the product = R25 = C
Inventory carrying cost is 20% of the annual inventory
investment = I

52. 2 x 200 000 x 200
EOQ ==
EOQ
25 x 0.2 = 4 000
units
per order
placed
EOQ = 2DO/IC
Demand = 200 000 units = annual demand = D
Cost of placing one ORDER = R200 per order = O
Unit cost of the product = R25 = C
Inventory carrying cost is 20% of the annual inventory
investment = I

53. OPTIMAL AMOUNT OF ORDERS
ANNUAL DEMAND
=
EOQ

54. OPTIMAL AMOUNT OF ORDERS
ANNUAL DEMAND
=
EOQ
200 000
=
4 000

55. OPTIMAL AMOUNT OF ORDERS
ANNUAL DEMAND
=
EOQ
200 000
=
4 000
= 50 ORDERS PER YEAR

56. Question: When would you have aahigher
Question: When would you have higher
reorder point than usual?
reorder point than usual?
- Unreliable suppliers
- Huge variations in order lead time
- Large fluctuations in C-demand
Thus, have to increase safety stocks as well … increased
inventory costs …

57. GROUP ACTIVITY
• Logistics management worksheet

58. Just in time - JIT
Right products at the right quantities just when they are required.
Right products at the right quantities just when they are required.
Information system

59. KANBAN
Concept that implies that the
organisation holds LOW
inventory levels and NO SAFETY
STOCK because carrying
inventory tied up working capital.

60. KANBAN
Coordination between producers
and suppliers = essential …
Deliveries are synchronised
closely.

61. NB RE JIT:
1. Close relations between supplier
and customer
2. Attention given to quality
3. Organisations must have adequate
storing facilities
4. Organisations must have adequate
transport options
5. Suppliers must deliver a reliable
service
6. Short and reliable order lead times
7. Purchasing quantities are reduced

62. Advantages of having JIT:
1. Lower inventory levels = reduced
stock holding cost
2. Low/ no safety stock levels =
reduced stock holding cost
3. If organisation and supplier have
good relationships … leads to
higher quality (cannot send back
due to time issue)

63. Disadvantages of having JIT:
1. Risk of running out of stock due to
late deliveries
SO – SELECTING SUPPLIERS ON
FOLLOWING CRITERIA:
a) Quality of goods they provide
b) Their reliability
c) Their capability
d) Sound financial position
e) Good location
f) Stable labour force

64. ABC INVENTORY ANLYSIS
Determine how important each item is for
Determine how important each item is for
organisation.
organisation.
Small ##of items responsible for large %
Small of items responsible for large %
investment
investment

65. ABC
Most NB ––10% ##items; 70% of capital
Most NB 10% items; 70% of capital
investment in inventory
investment in inventory
AA
20% ##items; 20% of capital investment in
20% items; 20% of capital investment in
B inventory
inventory
B
70% ##items; 10% of capital investment in
70% items; 10% of capital investment in
CC inventory
inventory

66. ABC
Most NB ––10% ##items; 70% of capital
Most NB 10% items; 70% of capital
investment in inventory
investment in inventory
AA
20% ##items; 20% of capital investment in
20% items; 20% of capital investment in
B inventory
inventory
B
70% ##items; 10% of capital investment in
70% items; 10% of capital investment in
CC inventory
inventory

67. Example
The principle
The principle

69. Magical Menagerie
Magical Menagerie
The Magical Menagerie is aamagical creature shop that in addition to selling
The Magical Menagerie is magical creature shop that in addition to selling
magical creatures also offers advice on animal care and health. The shop is
magical creatures also offers advice on animal care and health. The shop is
very cramped, noisy and smelly, due to every inch being covered with
very cramped, noisy and smelly, due to every inch being covered with
cages. Among the creatures in the Magical Menagerie are enormous purple
cages. Among the creatures in the Magical Menagerie are enormous purple
toads, aafirecrab, poisonous orange snails, aafat white rabbit that can turn
toads, firecrab, poisonous orange snails, fat white rabbit that can turn
into aasilk top hat and back, cats of every colour, ravens, Puffskeins, and aa
into silk top hat and back, cats of every colour, ravens, Puffskeins, and
cage of sleek black rats that play skipping games with their tails.
cage of sleek black rats that play skipping games with their tails.

70. Inventory for Magical Menagerie (Diagon Alley, London)
Inventory item Annual usage in Pounds Percentage of total inventory usage in Pounds
Black cage £37,500 31%
White cage £12,000 10%
Copper cage £1,000 1%
Purple toad £6,500 5%
Firecrab £800 1%
Orange snail £1,200 1%
Magical rabbit £4,000 3%
Blue cat £650 1%
Black cat £45,000 37%
Ginger cat £1,000 1%
White cat £1,000 1%
Raven £7,900 6%
Snake £1,000 1%
Puffskein £650 1%
Rat £850 1%
Hamster £700 1%
£121,750
31 + 37 = 68% Top 70% of capital investment
10 + 5 + 6 Next 20% of capital investment
Rest Last 10% of capital investment
2 out of 16 13%
3 out of 16 19%
11 out of 16 68%

71. How to do it nicely
How to do it nicely

72. Inventory for Magical Menagerie (Diagon Alley, London)
Cumulative % of total Cumulative % of
Annual usage in annual usage in inventory usage in total inventory
Inventory item Pounds Pounds Pounds usage in Pounds
Black cat £45,000 £45,000 37% 37%
Black cage £37,500 £82,500 31% 68%
White cage £12,000 £94,500 10% 78%
Raven £7,900 £102,400 6% 84%
Purple toad £6,500 £108,900 5% 89%
Magical rabbit £4,000 £112,900 3% 93%
Orange snail £1,200 £114,100 1% 94%
Copper cage £1,000 £115,100 1% 95%
Ginger cat £1,000 £116,100 1% 95%
White cat £1,000 £117,100 1% 96%
Snake £1,000 £118,100 1% 97%
Rat £850 £118,950 1% 98%
Firecrab £800 £119,750 1% 98%
Blue cat £650 £120,400 1% 99%
Puffskein £650 £121,050 1% 99%
Hamster £700 £121,750 1% 100%
£121,750

73. Understand graph on page 194

74. WAREHOUSING

75. Functions of warehouses
Receiving goods
Receiving goods
Sorting goods
Sorting goods
Storage of goods
Storage of goods
Filling the order
Filling the order
Dispatching of
Dispatching of
order
order

76. Warehousing decisions
How many
How many
WH needed
WH needed
Types of
Types of
WH
WH
required
required
Location of
Location of
WHs
WHs

77. Warehousing decisions: (1) Private
warehouses
For their own logistical ops
Owned by any organisation (M, W, R)
NB to have necessary resources and
expertise
Reasons for having:
1.Long time / term commitment
2.Special handling procedures
3.Want to control design and ops
within the WH
GOOD: sales are consistent &
property value appreciate
BAD: Fixed costs (insurance, debt,
maintenance, taxes) & non-flexible
(location)

78. Warehousing decisions: (1) Private
warehouses
For their own logistical ops
Trend: own fewer private WHs --- product ss
Trend: own fewer private WHs --- product Owned by any organisation
(MANUFACTURER, WHOLESALER, RETAILER)
must flow quicker from M to C (reducing
must flow quicker from M to C (reducing
inventory carrying costs)
inventory carrying costs)
NB to have necessary resources and
expertise
Reasons for having:
1.Long time / term commitment
2.Special handling procedures
3.Want to control design and ops
within the WH
GOOD: sales are consistent &
property value appreciate
BAD: Fixed costs (insurance, debt,
maintenance, taxes) & non-flexible
(location)

79. Warehousing decisions: (2) Public warehouses
Now owned but rented
Include related distribution activities:
receiving, unloading, inspecting
goods, completing orders & financing.
USEFUL:

80. Warehousing decisions: (2) Public warehouses
Now owned but rented
Include related distribution activities:
receiving, unloading, inspecting
goods, completing orders & financing.
USEFUL:
(1) seasonal products (2) low-volume
storage needs (3) developing new
markets (4) additional storage space
if already have private (5) inventory
levels to be maintained in many
locations (6) specialise
BENEFITS related to variable costs
i.e. rent space, certain services,
concurrent + FLEXIBILITY

81. Warehousing decisions: (3) Distribution
centres
Moving rather than storing …
Large and automated …
BENEFITS: C-service & product
availability increased whilst order lead
time = decreased
Trends: (1) use of new technology ==speed
Trends: (1) use of new technology speed
and efficiency (2) less inventory --- JIT and
and efficiency (2) less inventory --- JIT and
MRP (Materials Requirement Planning) (3)
MRP (Materials Requirement Planning) (3)
quality ==NB (4) emphasis on SERVICE (5)
quality NB (4) emphasis on SERVICE (5)
MATERIALS HANDING
MATERIALS HANDING

82. Materials handling

83. Materials handling equipment

84. Materials handling equipment
Free-flowing equipment
Free-flowing equipment Overhead materials
Overhead materials
that moves on the ground
that moves on the ground handling equipment
handling equipment

85. Integrating Logistics
Order processing
Order processing
TOMWI
Materials handling
Materials handling Transportation
Transportation
Warehousing
Warehousing Inventory management
Inventory management
Pic: http://www.google.co.za/imgres?imgurl=http://kotaku.com/assets/resources/2007/05/wii.jpg&imgrefurl=http://kotaku.com/260840/canada-uses-wii-in-hospitals&usg=__Uk2Ojzm9fX3WGTIvKJ0uJFjGiuk=&h=918&w=1024&sz=103&hl=en&start=0&tbnid=Xc9KY1DeBLNCwM:&tbnh=111&tbnw=140&prev=/images%3Fq%3Dwii%26um%3D1%26hl%3Den%26rlz%3D1R2RNSN_enZA388%26biw%3D1003%26bih%3D539%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=249&vpy=215&dur=1344&hovh=213&hovw=237&tx=115&ty=123&ei=MgNZTKW KLM6WOJrv2cgJ&page=1&ndsp=16&ved=1t:429,r:7,s:0

86. Hmmm …
• Silo’s want to improve their own
performance
• Purchasing manager: lower inventory
levels = lower carrying costs
• Marketing manager: higher inventory
levels = better C-service

87. Integrated logistics inside the organisation
Focus in past = internal single-organisation
focus:
-Value analysis
-Process improvements
-Standardisation
-Technological improvements

88. Integrated logistics outside the organisation
Now: supply-chain focus:
Cost management initiatives require logistics executives to
adopt a series of initiatives that can have a positive impact on
bottom line

89. Integrated logistics outside the organisation
Now: supply-chain focus:
Cost management initiatives require logistics executives to
adopt a series of initiatives that can have a positive impact on
bottom line
Two supply chain partners working
Two supply chain partners working
together to identify process
together to identify process
improvements to reduce costs across
improvements to reduce costs across
entire supply chain
entire supply chain

90. Integrated logistics outside the organisation
Partnership forms:
Partnership forms:
1. Cross-fx, cross-org teams
2. Shared projects
3. Info-sharing
4. Continuous inventory
replenishment systems

91. Integrated logistics outside the organisation
Partnership forms:
Partnership forms:
Also:
- Value-engineering efforts
- Supplier development
- Cross-org cost-reduction efforts
- Joint new product development
projects
- Supply-chain redesign efforts

92. Integrated logistics outside the organisation
Result
Result

93. Integrated logistics outside the organisation
Result
Result
Lead times reduced
Improved C-service
Manage chain based on C-
responses
If not done: have to M on sales forecasts …
storing … inventory carrying costs …

94. GROUP EXERCISE
• American Swiss case study
• Review questions p204
• La Mercy Case Study p205