3/14/2021 Distribution
Management:
Summary
Book: Supply Chain Logistics
Management, 5th Edition
Joel Vesque-Kolten
TILBURG UNIVERSITY
,Table of Contents
The Supply Chain Revolution....................................................................................................5
Why Integration Creates Value................................................................................................6
Generalized Supply Chain Model and Supply Chain Applications..............................................6
Generalized Supply Chain Model..............................................................................................7
Supply Chain Definitions and Activities....................................................................................8
Integrative Management and Supply Chain Processes.............................................................9
Enterprise Extension........................................................................................................................10
Integrated Service Providers (ISPs)...................................................................................................10
Collaboration....................................................................................................................................11
Supply Chain Value Proposition..............................................................................................11
Effectiveness....................................................................................................................................11
Efficiency..........................................................................................................................................11
Relevancy.........................................................................................................................................11
Sustainability....................................................................................................................................11
Value Proposition Conclusion...........................................................................................................11
Responsiveness......................................................................................................................11
Anticipatory Business Model (Push).................................................................................................12
Responsive Business Model (Pull)....................................................................................................12
Barriers to Implementing Responsive Systems.................................................................................13
Globalization.........................................................................................................................13
Industry Disruptors................................................................................................................14
Consumer requirements...................................................................................................................14
Technology adoption........................................................................................................................14
Logistics Management...........................................................................................................16
Order Management..........................................................................................................................16
Inventory..........................................................................................................................................16
Transportation.................................................................................................................................16
Warehousing....................................................................................................................................16
Facility Network Design....................................................................................................................16
Value Creation of Logistics.....................................................................................................17
Service Benefits................................................................................................................................17
1
, Cost Minimization............................................................................................................................17
Logistical Operations.............................................................................................................17
Inventory Flow.................................................................................................................................17
Information Flow..............................................................................................................................18
Logistical Integration Objectives............................................................................................18
Responsiveness................................................................................................................................18
Variance Reduction..........................................................................................................................18
Inventory Reduction.........................................................................................................................18
Shipment Consolidation...................................................................................................................18
Quality.............................................................................................................................................18
Life Cycle Support.............................................................................................................................18
Logistical Operating Arrangements........................................................................................18
Single Echelon..................................................................................................................................18
Direct Echelon..................................................................................................................................19
Combined Echelon............................................................................................................................19
Supply Chain Synchronization................................................................................................20
Performance Cycle Structure............................................................................................................20
Performance Cycle Uncertainty........................................................................................................20
Customer-Focused Marketing................................................................................................21
Transactional versus Relationship Marketing...................................................................................22
Supply Chain Service Outputs...........................................................................................................22
Omnichannel Marketing...................................................................................................................24
Customer Service...................................................................................................................24
Availability.......................................................................................................................................24
Operational Performance.................................................................................................................25
Service Reliability.............................................................................................................................25
The Perfect Order.............................................................................................................................26
Logistics Service Platforms...............................................................................................................26
Customer Satisfaction............................................................................................................26
Customer Expectations.....................................................................................................................26
A Model of Customer Satisfaction....................................................................................................27
Increasing Customer Expectations....................................................................................................29
Limitations of Customer Satisfaction................................................................................................29
2
,Customer Success...................................................................................................................30
Achieving Customer Success.............................................................................................................30
Value-Added Services.......................................................................................................................31
Developing Customer Accommodation Strategy....................................................................31
Framework for Strategic Choice.......................................................................................................31
Customer Relationship Management Technology............................................................................32
Transport Functionality and Participants...............................................................................33
Functionality....................................................................................................................................33
Participants......................................................................................................................................33
Transportation Model Structure.............................................................................................34
Rail...................................................................................................................................................34
Truck................................................................................................................................................34
Water...............................................................................................................................................34
Pipeline............................................................................................................................................34
Air....................................................................................................................................................35
Model Comparative Characteristics and Capabilities........................................................................35
Infrastructure in Crisis......................................................................................................................35
Specialized Transportation Services.......................................................................................36
Parcel Service...................................................................................................................................36
Intermodal.......................................................................................................................................36
Nonoperating Intermediaries...........................................................................................................36
Transportation Economics and Pricing...................................................................................37
Economy of Distance........................................................................................................................37
Economy of Weight..........................................................................................................................37
Economy of Density..........................................................................................................................37
Other Pricing Factors........................................................................................................................37
Costing Freight.................................................................................................................................38
Pricing Freight..................................................................................................................................38
Strategic Warehousing..........................................................................................................39
Service Benefits................................................................................................................................39
Economic Benefits............................................................................................................................40
Warehouse Ownership Arrangements...................................................................................42
Private..............................................................................................................................................42
3
, Public...............................................................................................................................................42
Contract...........................................................................................................................................43
Network Deployment.......................................................................................................................43
Warehouse Decisions.............................................................................................................43
Site Selection....................................................................................................................................43
Design..............................................................................................................................................44
Product-Mix Analysis........................................................................................................................44
Expansion.........................................................................................................................................44
Handling...........................................................................................................................................44
Layout..............................................................................................................................................44
Sizing................................................................................................................................................45
Warehouse Operations..........................................................................................................45
Primary Warehouse Operations.............................................................................................45
Product Handling..............................................................................................................................45
Product Handling Considerations.....................................................................................................46
Storage.............................................................................................................................................49
Packaging Perspectives..........................................................................................................50
Packaging for Handling Efficiency..........................................................................................50
Package Design.................................................................................................................................50
Unitization........................................................................................................................................50
Communication................................................................................................................................51
Enterprise Facility Network....................................................................................................52
Spectrum of Location Decisions........................................................................................................52
Local Presence: An obsolete Paradigm.............................................................................................52
Warehouse requirements.......................................................................................................53
Procurement drivers.........................................................................................................................53
Manufacturing drivers......................................................................................................................53
Customer Relationship Drivers.........................................................................................................53
Warehouse Justification...................................................................................................................54
Application of supply chain principles....................................................................................55
Decision application.........................................................................................................................55
Decision Framework.........................................................................................................................56
Strategy drivers.....................................................................................................................57
4
, Understanding End-to-End Supply Chain Management..........................................................59
Developing Supply Chain Management Talent.......................................................................59
Acquisition.......................................................................................................................................59
Conservation....................................................................................................................................60
Retention.........................................................................................................................................60
Managing Risk and Complexity..............................................................................................60
Risk Management............................................................................................................................60
Complexity Management.................................................................................................................61
Managing Threats and Environmental Changes.....................................................................61
Understanding the Security, Regulatory, and Compliance Environment.................................61
Understanding Purchasing and Total Cost Management........................................................62
Chapter 1: 21st-Century Supply
Chains
The Supply Chain Revolution
There are two massive shifts in expectation and practice concerning best-practice performance
of business operations that are highly interrelated: The supply chain revolution and a related
renaissance.
Supply chain strategy: establishes the operating framework within which logistics is performed.
Acknowledged dependence between business firms created the study of what became known
as distribution or marketing channels.
5
Management:
Summary
Book: Supply Chain Logistics
Management, 5th Edition
Joel Vesque-Kolten
TILBURG UNIVERSITY
,Table of Contents
The Supply Chain Revolution....................................................................................................5
Why Integration Creates Value................................................................................................6
Generalized Supply Chain Model and Supply Chain Applications..............................................6
Generalized Supply Chain Model..............................................................................................7
Supply Chain Definitions and Activities....................................................................................8
Integrative Management and Supply Chain Processes.............................................................9
Enterprise Extension........................................................................................................................10
Integrated Service Providers (ISPs)...................................................................................................10
Collaboration....................................................................................................................................11
Supply Chain Value Proposition..............................................................................................11
Effectiveness....................................................................................................................................11
Efficiency..........................................................................................................................................11
Relevancy.........................................................................................................................................11
Sustainability....................................................................................................................................11
Value Proposition Conclusion...........................................................................................................11
Responsiveness......................................................................................................................11
Anticipatory Business Model (Push).................................................................................................12
Responsive Business Model (Pull)....................................................................................................12
Barriers to Implementing Responsive Systems.................................................................................13
Globalization.........................................................................................................................13
Industry Disruptors................................................................................................................14
Consumer requirements...................................................................................................................14
Technology adoption........................................................................................................................14
Logistics Management...........................................................................................................16
Order Management..........................................................................................................................16
Inventory..........................................................................................................................................16
Transportation.................................................................................................................................16
Warehousing....................................................................................................................................16
Facility Network Design....................................................................................................................16
Value Creation of Logistics.....................................................................................................17
Service Benefits................................................................................................................................17
1
, Cost Minimization............................................................................................................................17
Logistical Operations.............................................................................................................17
Inventory Flow.................................................................................................................................17
Information Flow..............................................................................................................................18
Logistical Integration Objectives............................................................................................18
Responsiveness................................................................................................................................18
Variance Reduction..........................................................................................................................18
Inventory Reduction.........................................................................................................................18
Shipment Consolidation...................................................................................................................18
Quality.............................................................................................................................................18
Life Cycle Support.............................................................................................................................18
Logistical Operating Arrangements........................................................................................18
Single Echelon..................................................................................................................................18
Direct Echelon..................................................................................................................................19
Combined Echelon............................................................................................................................19
Supply Chain Synchronization................................................................................................20
Performance Cycle Structure............................................................................................................20
Performance Cycle Uncertainty........................................................................................................20
Customer-Focused Marketing................................................................................................21
Transactional versus Relationship Marketing...................................................................................22
Supply Chain Service Outputs...........................................................................................................22
Omnichannel Marketing...................................................................................................................24
Customer Service...................................................................................................................24
Availability.......................................................................................................................................24
Operational Performance.................................................................................................................25
Service Reliability.............................................................................................................................25
The Perfect Order.............................................................................................................................26
Logistics Service Platforms...............................................................................................................26
Customer Satisfaction............................................................................................................26
Customer Expectations.....................................................................................................................26
A Model of Customer Satisfaction....................................................................................................27
Increasing Customer Expectations....................................................................................................29
Limitations of Customer Satisfaction................................................................................................29
2
,Customer Success...................................................................................................................30
Achieving Customer Success.............................................................................................................30
Value-Added Services.......................................................................................................................31
Developing Customer Accommodation Strategy....................................................................31
Framework for Strategic Choice.......................................................................................................31
Customer Relationship Management Technology............................................................................32
Transport Functionality and Participants...............................................................................33
Functionality....................................................................................................................................33
Participants......................................................................................................................................33
Transportation Model Structure.............................................................................................34
Rail...................................................................................................................................................34
Truck................................................................................................................................................34
Water...............................................................................................................................................34
Pipeline............................................................................................................................................34
Air....................................................................................................................................................35
Model Comparative Characteristics and Capabilities........................................................................35
Infrastructure in Crisis......................................................................................................................35
Specialized Transportation Services.......................................................................................36
Parcel Service...................................................................................................................................36
Intermodal.......................................................................................................................................36
Nonoperating Intermediaries...........................................................................................................36
Transportation Economics and Pricing...................................................................................37
Economy of Distance........................................................................................................................37
Economy of Weight..........................................................................................................................37
Economy of Density..........................................................................................................................37
Other Pricing Factors........................................................................................................................37
Costing Freight.................................................................................................................................38
Pricing Freight..................................................................................................................................38
Strategic Warehousing..........................................................................................................39
Service Benefits................................................................................................................................39
Economic Benefits............................................................................................................................40
Warehouse Ownership Arrangements...................................................................................42
Private..............................................................................................................................................42
3
, Public...............................................................................................................................................42
Contract...........................................................................................................................................43
Network Deployment.......................................................................................................................43
Warehouse Decisions.............................................................................................................43
Site Selection....................................................................................................................................43
Design..............................................................................................................................................44
Product-Mix Analysis........................................................................................................................44
Expansion.........................................................................................................................................44
Handling...........................................................................................................................................44
Layout..............................................................................................................................................44
Sizing................................................................................................................................................45
Warehouse Operations..........................................................................................................45
Primary Warehouse Operations.............................................................................................45
Product Handling..............................................................................................................................45
Product Handling Considerations.....................................................................................................46
Storage.............................................................................................................................................49
Packaging Perspectives..........................................................................................................50
Packaging for Handling Efficiency..........................................................................................50
Package Design.................................................................................................................................50
Unitization........................................................................................................................................50
Communication................................................................................................................................51
Enterprise Facility Network....................................................................................................52
Spectrum of Location Decisions........................................................................................................52
Local Presence: An obsolete Paradigm.............................................................................................52
Warehouse requirements.......................................................................................................53
Procurement drivers.........................................................................................................................53
Manufacturing drivers......................................................................................................................53
Customer Relationship Drivers.........................................................................................................53
Warehouse Justification...................................................................................................................54
Application of supply chain principles....................................................................................55
Decision application.........................................................................................................................55
Decision Framework.........................................................................................................................56
Strategy drivers.....................................................................................................................57
4
, Understanding End-to-End Supply Chain Management..........................................................59
Developing Supply Chain Management Talent.......................................................................59
Acquisition.......................................................................................................................................59
Conservation....................................................................................................................................60
Retention.........................................................................................................................................60
Managing Risk and Complexity..............................................................................................60
Risk Management............................................................................................................................60
Complexity Management.................................................................................................................61
Managing Threats and Environmental Changes.....................................................................61
Understanding the Security, Regulatory, and Compliance Environment.................................61
Understanding Purchasing and Total Cost Management........................................................62
Chapter 1: 21st-Century Supply
Chains
The Supply Chain Revolution
There are two massive shifts in expectation and practice concerning best-practice performance
of business operations that are highly interrelated: The supply chain revolution and a related
renaissance.
Supply chain strategy: establishes the operating framework within which logistics is performed.
Acknowledged dependence between business firms created the study of what became known
as distribution or marketing channels.
5
