Logistics Fundamentals Lecture One - An Introduction
Summary
TLDRIn this introductory lecture on logistics, Chris Lee, a seasoned logistics professional with nearly 20 years of experience, provides an overview of the field. He explains the origins and definitions of logistics, highlighting its importance in both military and modern business contexts. The lecture covers the role of logistics in supply chain management, the significance of information flow, and the economic impact of efficient logistics. Lee also discusses the concept of economic utility and its various types, as well as the evolving consumer behaviors that affect logistics. The session concludes with an invitation to explore the impact of information technology on logistics in the next lecture.
Takeaways
- 🚚 Logistics is crucial in both military and commercial sectors, with a significant role in supply chain management.
- 🌐 Modern logistics integrates forward and reverse flows, ensuring efficient movement and storage of goods and information.
- 🏢 Logistics management involves planning, implementing, and controlling the flow and storage of goods and services from origin to consumption.
- 📦 The effectiveness of logistics impacts business functions like marketing, operations, production, and finance.
- 📊 The economic utility of logistics includes possession, form, time, and place, all contributing to customer satisfaction and economic development.
- 🛠️ Advancements in information technology and deregulation have transformed logistics, enhancing its economic opportunities and operational efficiency.
- 👨👩👧👦 Changing consumer behaviors and family dynamics influence logistics, demanding more convenience and tailored services.
- 🔄 Mass customization allows companies to meet specific customer needs, reflecting the shift towards more personalized logistics services.
- 🛒 Efficient logistics reduce costs and improve GDP, highlighting the direct relationship between logistics efficiency and economic growth.
- 📈 The logistics job market is robust, offering various roles from analysts to managers, driven by the growing importance of supply chain management.
Q & A
Who is the presenter of the logistics lecture series?
-The presenter is Chris Lee.
What background does Chris Lee have in logistics?
-Chris Lee has almost 20 years of experience in logistics, beginning with the United States military, and has worked globally in the field.
How does the Council of Supply Chain Management Professionals (CSCMP) define logistics?
-CSCMP defines logistics as part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customer requirements.
What is the main focus of logistics according to the Chartered Institute of Logistics and Transport?
-The Chartered Institute of Logistics and Transport focuses on getting the right product to the right place in the right quantity, at the right time, in the best condition, and at an acceptable cost.
Why is the flow and storage of information important in modern logistics?
-Information in logistics is crucial because it allows for efficient management and can substitute for inventory, enabling companies to reorder products as they are sold rather than keeping them in storage.
What are the 'eight R's' of logistics mentioned in the lecture?
-The 'eight R's' of logistics involve getting the right product, in the right quantity and quality, to the right place, at the right time, for the right customer, at the right cost, in the right way.
How does logistics impact economic development and GDP?
-Efficient logistics reduce costs, which allows for greater economic development. Higher logistics costs can limit economic progress and directly affect a nation's GDP.
What are the four types of economic utility in logistics?
-The four types of economic utility are possession utility, form utility, time utility, and place utility.
What role do changing family roles and rising customer expectations play in logistics?
-Changes in family roles, such as more dual-income households, increase the demand for convenience in logistics, while rising customer expectations require continuous improvement in logistics services to meet evolving demands.
What is the significance of reverse logistics in today's logistics field?
-Reverse logistics, which deals with the return of products from the point of consumption, is crucial for managing returns, recycling, and disposal, and is now as important as forward logistics.
What professional opportunities are available in the logistics and supply chain management field?
-Career opportunities in logistics and supply chain management include roles such as logistics analysts, consultants, customer service managers, international logistics managers, supply chain software managers, purchasing managers, transportation managers, and warehouse operations managers.
What are the systems and total cost approaches in logistics?
-The systems approach in logistics recognizes the interdependence of various organizational functions, while the total cost approach ensures that material management and distribution are coordinated in the most cost-efficient way.
Outlines
📦 Introduction to Logistics and Its Importance
This paragraph introduces the fundamentals of logistics, presented by Chris Lee. He provides an overview of the field of logistics, starting with its military origins and its significance in today's global economy. The lecture aims to answer key questions about logistics, such as its definition, importance, and impact on daily life. Chris Lee highlights the importance of logistics in supply chain management and its role in planning, implementing, and controlling the flow and storage of goods, services, and information.
🎯 Tailored Logistics Strategies
This paragraph discusses the importance of tailored logistics strategies to meet diverse customer needs. It contrasts mass logistics, a one-size-fits-all approach, with tailored logistics, which adjusts services to meet specific customer requirements. The lecture emphasizes the 'eight R's of logistics,' focusing on delivering the right product, in the right way, at the right place and time, for the right customer, and at the right cost. The economic impact of logistics on society and its role in enhancing economic development and GDP is also highlighted.
🛒 Impact of Consumer Behavior on Logistics
This paragraph examines how changes in consumer behavior over the past thirty years have influenced logistics. It explores the concept of the 'customized customer,' the changing roles within families, and rising customer expectations. The lecture introduces the systems approach and total cost approach to logistics, emphasizing the interdependence of organizational functions and the need for cost-efficient material management and distribution. Key logistics activities are listed, including customer service, demand forecasting, and inventory management.
Mindmap
Keywords
💡Logistics
💡Supply Chain Management
💡Reverse Logistics
💡Economic Utility
💡Customer Service
💡Information Technology
💡Deregulation
💡Mass Customization
💡Total Cost Approach
💡Professional Organizations
Highlights
Introduction to the fundamentals of logistics by Chris Lee, who has 20 years of experience in the field.
Logistics origins traced back to military operations, emphasizing the movement and supply of troops.
Logistics is now used by companies for strategic advantage in the global economy.
Definition of logistics by the Council of Supply Chain Management Professionals (CSCMP): part of supply chain management that plans, implements, and controls the efficient flow and storage of goods, services, and information.
Council of Logistic Management's definition of logistics focuses on planning, implementing, and controlling the flow and storage of goods to conform to customer requirements.
Chartered Institute of Logistics and Transport's definition: getting the right product to the right place in the right quantity at the right time and condition at an acceptable cost.
Logistics is a part of supply chain management and affects the achievement of business goals across various functions like marketing, operations, production, and finance.
Modern logistics involves both forward and reverse flows of goods, with information flow being just as important.
Fritz Smith of FedEx emphasizes the importance of information about packages being as crucial as the packages themselves.
Logistics aims to meet customer requirements with strategies tailored to different customer needs, moving away from a one-size-fits-all approach.
The concept of the eight Rs in logistics: right way, right product, right quantity, right quality, right place, right time, right customer, and right cost.
Economic impact of logistics: efficient logistics is key to economic development, affecting a nation's GDP and individual consumers through economic utility.
Four types of economic utility in logistics: possession, form, time, and place.
Mass customization addresses the needs of the 'customized customer' by delivering tailored products and services.
Changing family roles and rising customer expectations have influenced logistics, leading to extended store hours, home delivery, and ready-to-eat foods.
The systems approach in logistics recognizes the interdependence of organizational functions to achieve goals.
The total cost approach ensures material management and distribution are coordinated efficiently.
Key logistics activities include customer service, demand forecasting, facility location, international logistics, inventory management, material handling, order management, packaging, procurement, reverse logistics, transportation, and warehouse management.
The job market in logistics and supply chain management is strong, with various entry-level and second-level positions available.
Professional organizations are dedicated to advancing logistics knowledge, and joining these can benefit one's career.
Next lecture will discuss the impact of information technology on logistics.
Transcripts
[Music]
welcome to the fundamentals of logistics
my name is Chris Lee and over the series
of fourteen lectures I will be providing
a background and overview of the
profession of logistics I began my
logistics career almost 20 years ago
with the United States military and I've
had the opportunity to work in logistics
around the world for a number of
organizations I still find the logistics
field just as exciting today as I did
when I began my logistics career and in
fact the origins of logistics can be
traced back to the military and the
military operations relating to systems
of moving and supplying troops today
companies utilize logistics for
strategic advantage in the global
economy this first lecture offers an
introduction to logistics and provides
an overview of the field so what is
logistics why do we study logistics what
impact is logistics have on our daily
lives these are just a few of the
questions we will strive to answer as we
go through this series of lectures the
first thing we need to do as we examine
the topic of logistics is ask the
question what is logistics that is
define logistics as a term it should
come as no surprise that there are many
definitions of logistics but we're going
to concentrate on three major ones first
we will look at the definition of the
Council of supply chain management
professionals next we'll examine the
Council of logistic management's
definition and finally we will look at
the Chartered Institute of logistics and
transportation Stefan ition for
comparison the Council of supply chain
management professionals CSC MP one of
the world's most prominent organizations
for logistics professionals states that
logistics management is that part of
supply chain management that plans
implements and control
the efficient effective forward and
reverse flow and storage of goods
services and related information between
the point of origin and the point of
consumption in order to meet customers
requirements by comparison the castle
logistics management defines logistics
as the process of planning implementing
and controlling the effective and
efficient flow and storage of goods
services and related information from
the point of origin to the point of
consumption for the purpose of
conforming to customer requirements
finally the Chartered Institute of
logistics and transport the finest
logistics is getting the right product
to the right place in the right quantity
at the right time in the best condition
and at an acceptable cost okay we have
some definitions that help us nail down
the term of logistics what does this all
really mean well first logistics is part
of supply chain management which means
logistics is part of the larger overall
business functions across organizations
functions such as marketing operations
production and finance the fact that
logistics is explicitly recognized as
part of supply chain management means
that logistics can affect how well or
how poorly an individual firm and its
associated supply chain or chains can
achieve goals and objectives which istic
should also be involved in the three
activities of planning implementing and
controlling and not just one or two
organizations are also tested on how
effective and efficient they are at
managing their logistical operations
traditionally logistics focused only on
the forward movement of moving product
to an end destination but today the
logistics field has recognized the
importance of reverse flows and storage
reverse logistics those that originate
at the point of consumption today the
flow and storage of information is just
as important in logistics as is the flow
and storage of goods
the importance of information in
contemporary logistics was captured by
Fritz Smith a CEO and chairman of FedEx
who believes that information about the
package is just as important as a
package itself modern logistics and
supply chain management allow us to
substitute information for inventory so
for example the cash register at many
contemporary retailers also track what
and when products are being purchased
this allows those retailers to then
reorder a product as product is sold
instead of keeping it in storage it is
this very idea that is allowed Walmart
to become one of the world's leading
retailers it is also important to
remember that the purpose of logistics
is to meet customer requirements
logistics strategies and activities
should be based on customer wants and
needs due to the fact that different
customers have different needs and wants
a one size all approach may not work
mass Logistics is a one-size-fits-all
approach in which every customer gets
the same type and level of logistic
service this will result in some
customers being over served while others
are under served that's why most
companies today take a tailored
Logistics approach in which groups of
customers with similar logistics needs
and wants are provided with logistics
services appropriate to those individual
needs and wants as we move through the
fundamentals of logistics series of
lectures keep in mind the eight hours of
logistics logistics involves getting in
the right way the right product in the
right quantity and right quality in the
right place at the right time for the
right customer at the right cost
ever since society's first learned that
by trading goods they produce for goods
they could not logistics is driven
economic development in progress
furthermore the greater the cost of
logistics the lesser society can develop
economically in other words logistics
costs directly relate to a nation's
gross domestic product GDP so efficiency
in logistics is key the economic impact
of logistics also affects individual
consumers just like you these impacts
are illustrated through the concept of
economic utility which is a value or
usefulness of a product in fulfilling
customers needs or wants there are four
general types of economic utility
these are possession form time and place
let's look at each of these in a little
bit more detail possession utility
refers to the value or usefulness a
customer derives from being able to take
position of a product possession utility
is often influenced by the payment terms
associated with a product credit and
debit cards for example facilitate
possession utility by allowing the
customer to purchase products without
having to produce cash or a cash
equivalent at the time of purchase form
utility refers to a product being in a
form that one can be used by the
customer and two is a value to the
customer form utility is traditionally
associated with production and
manufacturing but logistics can also
contribute to form utility by utilizing
a concept known as allocation which
allows for an increase in production to
the ideal production cost per unit that
is the least amount of cost for each
additional unit being made and
allocating that product across markets
that is making sure that we are
utilizing that Astra production in the
most efficient way
place utilities the idea of making
products available where they are needed
by customers in other words products are
moved from areas where they are not
needed or not popular to areas where
they are so for instance winter gloves
are very little purpose in Southern
California or Florida but are highly
desired in the winter months on the
eastern seaboard or around the Great
Lakes areas time utility is related to
place utility and that products are made
available to customers when they need
them using our example of winter gloves
earlier there's no need for winter
gloves even in the northern eastern
seaboard or the Great Lakes areas in the
middle of a summer heat wave during the
1970s and 80s widespread reductions and
economic regulations commonly referred
to as deregulation relaxed government
controls of carriers rates and fares
entry and exit international markets and
mergers and acquisitions of companies
and their logistical routes this led to
an increase in economic opportunities
that relied on logistics capabilities
these original regulations were
particularly dangerous to the u.s.
transportation industry because price
competition was essentially non-existent
and customers were pretty much forced to
accept whatever service the carrier's
chose to provide which meant that
logistics managers had relatively little
control over one of the most important
cost components in a logistics system
transportation changes in consumer
behavior over the past thirty years have
also had an impact in the field of
logistics these changes in consumer
behavior include the customers customer
the changing family roles and rising
customer expectations let's look at each
of these in a little bit more detail the
customized customer signifies that the
customer desires a product
during that is highly tailored to the
customers exact preferences one approach
for addressing the customized customer
is through mass customization which
refers to the ability of a company to
deliver highly customized products and
services that are designed to meet the
needs and wants of individual segments
or customers in reference to the
changing family rules in the United
States approximately 60% of families
with children report that both parents
work one consequence of these dual
income families has been an increasing
emphasis on the convenience associated
with a family's grocery shopping
experience this convenience is
manifested in various ways to include
extended store hours home delivery of
purchased items and ready-to-eat or
ready to cook foods and each of these
have an impact to logistics that's for
rising customer expectations it should
come as no surprise that customer
expectations tend to increase over time
which means that a satisfactory level of
performance in the past might not be
considered to be the same level today
there are also a couple important
approaches at logistics professionals
take in regards to logistics two major
approaches are the system's approach and
the total cost approach the systems
approach in a case that a company's
objectives can be realized by
recognizing the mutual interdependence
that a major functional areas of an
organization such as marketing
production finance and logistics in the
system's approach to logistics it is
understood the goals and objectives vary
from organization to organization
because different organizations have
different goals and objectives Logistics
managers use the total cost approach to
ensure that material management and
distribution are coordinated in the most
cost efficient way to properly apply the
systems and total cost approaches Allah
Geist 6 it is essential to understand
the various logistics activities
including customer service demand
forecasting facility location decisions
international logistics inventory
management material handling order
management packaging procurement reverse
logistics transportation management and
warehouse management the job market in
logistics and for supply chain managers
continues to be very strong at both the
undergraduate and MBA levels entry-level
jobs include logistics or supply chain
analysts consultants customer service
managers and fulfillment supervisors
second level positions in an
organization include international
logistics manager supply chain software
manager purchasing manager
transportation manager and warehouse
operations manager because of the
growing importance of logistics and
supply chain management a number of
professional organizations are dedicated
to advancing the professional knowledge
of their members and I invite you to
join those organizations that fit your
current field or specialty of interest
just as I have whose lecture we
presented an introduction and overview
of logistics and we work to define what
logistics is and how it operates in our
next lecture we will discuss how
information technology impacts logistics
my name is Chris Lee it's been my
pleasure to have you join us as we
explore the wonderful world of logistics
I hope you can join us for our next
presentation and invite you to reach out
to me if you've got questions on this
lecture or ideas for future lectures at
Chris and Li 0-7 at hotmail.com
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