INTRODUCTION TO

LOGISTICS & SCM

Mã học phần: 010401602101

Giảng viên : Th.S Đoàn Thị Hoàng Thảo
SĐT : 083.641.8992
Email : thaodth@ut.edu.vn
CONTENTS
• C1: Overview of Supply chain management
(SCM)

• C2: Overview of Logistics

• C3: IT in Logistics and SCM

• C4: Distribution and components

• C5: Current and future modals of transportation

• C6: E-commerce and E-Logistics

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Chapter I:
Overview of SCM
• 1.1. Past, present & future of SCM

• 1.2. Definition of SCM

• 1.3. Benefits from SCM for businesses

• 1.4. Aligning the Supply Chain with Business Strategy

• 1.5. Participants in Supply chain

• 1.6. Supply chain operations

• 1.7. SCM coordination

• 1.8. SCM future trends

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1.1. Past, present
& future of SCM

A/ SCM in the past

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 1.1. Past, present &
future of SCM

A/ SCM in the past

- For production industry:
1950s-1960s: manufacturing companies
applied mass production technology to reduce
costs and improve productivity while paying
little attention to building relationships with
suppliers, improving process design and
flexibility, or improving product quality.
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 1.1. Past, present &
future of SCM
A/ SCM in the past
1960s–1970s: The Material Requirement
Planning (MRP) and Manufacturing
Resource Planning (MRP) are developed
and the importance of effective material
management is emphasized when
manufacturers realize the impact of high
inventory levels on production costs and
inventory holding costs
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 1.1. Past, present &
future of SCM
A/ SCM in the past
1980s: The global market competition
became fierce in the early 1980s (and
continues to this day), putting pressure on
manufacturers to reduce costs, improve
product quality, and increase customer
service levels. Manufacturers have
implemented Just In Time (JIT) and Total
Quality Management (TQM) strategies to
improve quality, increase production
efficiency, and delivery time

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 A/ SCM in the past
1.1. Past, present & 1990s:
future of SCM • The Business Process Reengineering (BPR) is a redesign of
business processes to achieve dramatic improvements in critical
aspects like quality, output, cost, service, and speed. The aim of BPR
is to cut down enterprise costs and process redundancies on a very
huge scale.

• As competition increased along with the increase in post-production

costs and inventory, and the trend of globalization of the economy,
the challenge of improving quality, production efficiency, customer
service, and designing and developing new products also increased.
=> Supplier – customer alliance

• During this time, managers, consultants, and academic scholars began

to have a deeper understanding of the difference between logistics
and supply chain management. Supply chain management is seen as
a logistics activities outside the enterprise 9
1.1. Past, present & future of SCM
A/ A/ SCM in the past
- For wholesale and retail industry:
The focus of supply chain management is
more on location and logistics than on
production. Supply chain management in
these industries is often related to quick
response or integrated logistics. The
achievements of the internal electronic data
interchange (EDI) system, barcode system,
the internet, and radio frequency
identification technology over the past two
decades have supported the development of
the concept of integrated supply chains

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1.1. Past, present & future of SCM

B/ Current situation of SCM: C/ Future of SCM:

- The global supply chain has been facing - - Digitalization and display capability
several challenges in recent times. - - "Reshoring" and "Nearshoring“
• Economic recession due to Covid-19 - - Increased transportation costs
• IMO 2020 + Russia Ukraine War + - - Sustainable transportation
Israel - Palestine => Diesel prices - - Automation
increase
• US-China trade war 11
 1.2. Definition of SCM

- Definition of supply chain: - Definition of supply chain

Supply chain: includes all issues directly management (SCM):
or indirectly related to satisfying Supply chain management is a set of
customer needs. The supply chain methods that integrate and effectively use
includes not only manufacturers and suppliers, manufacturers, warehouse systems
suppliers but also transporters, and stores to distribute manufactured goods
warehouses, retailers, and customers. to the right locations, at the right time. at the
right quality requirements, with the aim of
minimizing system-wide costs while still
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satisfying service level requirements.

1.2. Definition of SCM
Supply chain management

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 Reduced business costs by 25-50%

Reduced inventory levels by 25-60%

1.3.Benefits
Improved order fulfillment cycle time by
from SCM for 30-50%
businesses Increased production forecast accuracy by
25-80%
Improved customer service

Increased after-tax profits by 21%

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1.4. Aligning the Supply Chain with
Business Strategy
Establish a supply chain consistent with the business strategy of the business:

Develop the
Identify the capabilities
company's core needed across
strengths or the supply chain
Understand the competitiveness and to support your
market your the role the company company's
company serves can play in serving chosen role.
the market

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1.4. Aligning • Understand the market your company serves:

the Supply • To meet customer requirements, it is necessary to set

answer these questions:

Chain with - What volume of product is needed for each shipment?

Business - Response time to meet customer satisfaction?

Strategy - Is product diversification necessary?

- Service level required?

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- Price of the product?

- What is the level of desire to change products?

1.4. Aligning • Identify the company's core strengths:
 Which participant in the supply chain is the company:
the Supply manufacturer, distributor, retailer, or service provider?

Chain with  What can a company do to become part of the supply

chain?
Business  What is the company's core competitiveness?

Strategy  How can the company make profits?

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1.4. Aligning • Develop the necessary capabilities in the supply chain:

the Supply  Manufacture

Chain with  Inventory

 Location
Business  Transportation
Strategy  Information
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 1.5. Service

Participants in provider

the Supply
Retailer Customer

Chain
Distributor

Manufacture
r

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 Four categories of Supply Chain Operation

1.6. Supply
Chain
Operations

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 a/ Plan
- Demand forecasting: is the most basic factor for
1.6. Supply companies to determine their own action plans to

Chain meet market needs.

Forecasting in supply chain management aims to
Operations answer the following questions:

 Quantity?
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 Categories?

 When?
 - Demand forecast : Forecasting criteria

1.6. Supply
Chain 1 Quantity demanded

Supply
Overall market demand for the product

Total products available

Operations
2

3 Product characteristics Product characteristics affect to demand

4 Competitive environment Supplier activity in the market
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 a/ Plan

1.6. Supply - Product pricing: Companies often use prices strategy

to stimulate demand, increase business revenue and
Chain increase business profits.

Operations - Answer below question:

“Should the company reduce prices when it is at its
peak to increase revenue or during a stagnant period to
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offset costs?”
 a/ Plan
• Inventory management
1.6. Supply 3 forms of inventory management:
Chain  Cycle inventory management: Needed to meet product

Operations demand between orders

 Seasonal inventory management: Production and

storage to meet future needs 24

 Safety Inventory: Replenish uncertain demand, ensure

minimum stock
 b/ Source:
• Procurement
1.6. Supply The procurement function can be divided into the following
Chain five main activities:

Operations  Purchasing

 BOM Management

 Vendor Selection 25

 Contract Negotiation

 Contract Management
 b/ Source
Purchasing:

1.6. Supply - Directs or strategic materials that are needed to produce

the products that the company sells to its customers;
Chain - Indirect or MRO (maintenance, repair & operations)
Operations products that a company consumes as part of daily operations.
BOM Management:
• Expected levels of consumption for different products at the 26

various locations of a company should be set and then

compared against actual consumption on a regular basis
 b/ Source:
Vendor Selection:
7 CRITERIA FOR SELECTING A SUPPLIER.

1.6. Supply 1. Supplier's reputation

2. Quality of products/services provided
Chain 3. Product/service delivery performance
Operations 4. Product/service prices and payment methods
5. Supplier customer service
6. Supplier's longevity and sustainability 27

7. Supplier's financial risks

A general rule is that a company must always gradually
narrow down the number of suppliers to choose a
suitable business partner.
 b/ Source:
Contract negotiation: Contract negotiations can fix
1.6. Supply issues such as product portfolio, pricing, and service
levels. . .
Chain TERMS NEED TO NOTE IN THE CONTRACT::

Operations - Subject of the contract

- Object of the contract
- Contract price, payment method and time
- The time of transfer of ownership and transfer of risk
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- Warranty of goods
- Risks
 b/ Source:
1.6. Supply Contract management :

Chain The company needs to be able to evaluate supplier

performance and control the level of service delivery
Operations which was agreed upon in the contract.

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 b/ Source:
1.6. Supply • Credit sales and debt collection:

Chain This function is divided into three main stages: - Set up

Operations a credit sales policy

- Carry out credit sales and debt collection activities
- Manage risks from credit sales 30
 c/ Manufacture :
- Product design:
To meet the desired characteristics, properties (physical,
1.6. Supply chemical properties)... of the product for customer needs.
Chain At the same time, we must coordinate with the raw material
supply chain.
Operations - Production Scheduling: An activity must ensure a
balance between the following goals:
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- High frequency of factory operations

- Low inventory levels
- High quality of customer service.
 c/ Make:

1.6. Supply - Facility Management: Production factory

management. Consider factory locations and focus on
Chain using available capacity most effectively.

Operations This leads to decisions in three fields:

The role of the factory will operate
Allocate capacity to each factory 32

Allocate suppliers and markets to each factory

 d/ Deliver:
- Order management: Effective order management
must pay attention to the following issues :
1.6. Supply
Chain 1. Enter the Order
Data Once and
2. Automate the
Order Handling
Operations Only Once
Order
manag
4. Integrate Order ement
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Management Systems 3. Make Order Status

with Other Related Visible to Customers
Systems to Maintain and Service Agents
Data Integrity
 d/ Deliver:
- Delivery Scheduling:

1.6. Supply For most modes of transportation there are two types of
delivery methods
Chain Direct delivery: are deliveries made from one
Operations originating location to one receiving location.
Milk run deliveries: are deliveries that are routed to
either bring products from a single originating location to
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multiple receiving locations or deliveries that bring

products from multiple originating locations to a single
receiving location
1.6. Supply d/ Deliver:

Chain - Return process: Optimizing the return process

helps businesses gain trust from customers.
Operations
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 Five major factors that cause the effect

Demand Forecasting
1.7. SCM
Order Batching
coordination
Product Rationing

Product Pricing

Performance Incentives

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1.7. SCM
coordination

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1.8. SCM future trends

1. Green Logistics 4. Take out of the supply

service chain

2. Supply chain
5. Increase the number of
integration is 6 trend of
partners to reduce
concentrated in large SCM Logistics costs
companies.

6. The service chain will

3. Software solutions
be more important than
powered by Blockchain
the product chain

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Illustration of
modern supply
chains around the
world

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