Exam summary – OPS (Operations & Supply Chain Management)
Contents
Chapter 6 – An overview of Logistics..................................................................................................2
Chapter 7 – The Supply Chain Management Concept........................................................................5
Chapter 8 – Transportation................................................................................................................8
Chapter 9 – Transportation Management........................................................................................11
Chapter 10 – International Logistics.................................................................................................14
, Chapter 6 – An overview of Logistics
Economic utility Value or usefulness of a product in fulfilling customer needs or wants.
Possession utility 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 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.
CSCMP defines Logistics as That part of the Supply Chain process that plans, implements, and
controls the efficient and 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.
Humanitarian logistics The process and systems involved in mobilizing people, resources, skills,
and knowledge to help people who have been affected by either a natural or man-made disaster.
- The increased importance of logistics:
Reduction economic regulations Deregulation
Changes in consumer behavior.
o Customized customer Desires product offering that is highly tailored to
customer’s exact preferences.
o Rising customer expectations Satisfactory level of performance in past might not
be considered so today.
o Next day delivery.
Technological advances.
o Disintermediation Removal of intermediaries between producer and customer.
o GPS, RF, Cloud.
Advances in Retailing.
o Big-box retailers Stores with large amounts of both floor space and products for
sale.
o Omnichannel retailing Strategy that focuses on providing customers a seamless
shopping experience regardless of sales channel.
Globalization of trade.
o Container Uniform sealed reusable metal box in which goods are shipped.
Systems Approach Alignment between major functional areas of the firm is key in realizing
company goals (mission/vision -> logistics).
Total Cost Approach Making trade-offs:
SKU Stock keeping unit
more SKU’s (higher inventory, allowing speedy delivery)
or fewer SKU’s (possible stock outs).
Materials management Movement into and storage of materials in a firm.
Physical distribution Storage of finished product and movement to the customer.
2
Contents
Chapter 6 – An overview of Logistics..................................................................................................2
Chapter 7 – The Supply Chain Management Concept........................................................................5
Chapter 8 – Transportation................................................................................................................8
Chapter 9 – Transportation Management........................................................................................11
Chapter 10 – International Logistics.................................................................................................14
, Chapter 6 – An overview of Logistics
Economic utility Value or usefulness of a product in fulfilling customer needs or wants.
Possession utility 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 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.
CSCMP defines Logistics as That part of the Supply Chain process that plans, implements, and
controls the efficient and 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.
Humanitarian logistics The process and systems involved in mobilizing people, resources, skills,
and knowledge to help people who have been affected by either a natural or man-made disaster.
- The increased importance of logistics:
Reduction economic regulations Deregulation
Changes in consumer behavior.
o Customized customer Desires product offering that is highly tailored to
customer’s exact preferences.
o Rising customer expectations Satisfactory level of performance in past might not
be considered so today.
o Next day delivery.
Technological advances.
o Disintermediation Removal of intermediaries between producer and customer.
o GPS, RF, Cloud.
Advances in Retailing.
o Big-box retailers Stores with large amounts of both floor space and products for
sale.
o Omnichannel retailing Strategy that focuses on providing customers a seamless
shopping experience regardless of sales channel.
Globalization of trade.
o Container Uniform sealed reusable metal box in which goods are shipped.
Systems Approach Alignment between major functional areas of the firm is key in realizing
company goals (mission/vision -> logistics).
Total Cost Approach Making trade-offs:
SKU Stock keeping unit
more SKU’s (higher inventory, allowing speedy delivery)
or fewer SKU’s (possible stock outs).
Materials management Movement into and storage of materials in a firm.
Physical distribution Storage of finished product and movement to the customer.
2
