Table Of ContentLogistics
An Introduction to Supply Chain Management
Donald Waters
Logistics
Logistics
An Introduction to Supply
Chain Management
Donald Waters
© Donald Waters 2003
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First published 2003 by
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Library of Congress Cataloging-in-Publication Data
Waters,C.D.J.(C.Donald J.),1949–
Logistics :an introduction to supply chain management / Donald Waters.
p.cm.
Includes bibliographical references and index.
ISBN 0–333–96369–5 (paper)
1.Business logistics.2.Industrial management.I.Title.
HD38.5 .W384 2002
658.5—dc21
2002073544
Editing and origination by Aardvark Editorial,Mendham,Suffolk
10 9 8 7 6 5 4 3 2 1
12 11 10 09 08 07 06 05 04 03
Printed in Great Britain by
Ashford Colour Press Ltd,Gosport
To Dan and Sue
Contents
List of Figures ix 4 Implementing the Strategy 82
Preface xi Relating Strategy to Lower Decisions 83
Areas for Decisions in Implementation 85
PART I Managing Change 95
Discussion Questions 103
Introduction 1
References 103
1 The Context of Logistics 3
5 Locating Facilities 104
Introduction 4
Importance of Location 105
Definitions 4
Choosing the Geographic Region 109
The Supply Chain 7
Infinite Set Approaches 113
Activities of Logistics 12
Feasible Set Approaches 119
Aims of Logistics 17
Network Models 126
Importance of Logistics 19
Location Planning 130
Discussion Questions 25
Discussion Questions 136
References 26
References 136
Further Reading 26
Further Reading 136
2 Integrating the Supply Chain 27
6 Planning Resources 137
Progress in Logistics 28
Types of Planning 138
Current Trends in Logistics 30
Capacity Planning 139
Integrating Logistics Within an
Adjusting Capacity 144
Organisation 34
Tactical Planning 150
Integration Along the Supply Chain 39
Short-term Schedules 158
Achieving Integration 43
Discussion Questions 165
Discussion Questions 53
References 165
References 54
Further Reading 165
PART II 7 Controlling Material Flow 166
Planning the Supply Chain 57 Material Requirements Planning 167
Extending the Role of MRP 174
3 Logistics Strategy 59 Principles of Just-in-time 178
Strategic Decisions 60 Achieving Just-in-time Operations 183
Logistics Strategy 62 Extending JIT Along the Supply Chain 189
StrategyOptions 66 Discussion Questions 194
Designing a Logistics Strategy 73 References 194
Discussion Questions 80 Further Reading 195
References 80
viii CONTENTS
8 Measuring and Improving 11 Warehousing and Material
Performance 196 Handling 282
Measuring Performance 197 Purpose of Warehouses 283
Comparing Performance 207 Activities Within a Warehouse 285
Analysing a Supply Chain 209 Ownership 290
Improving Performance 215 Layout 292
Discussion Questions 222 Materials Handling 297
References 223 Packaging 302
Further Reading 223 Discussion Questions 306
References 306
PART III Further Reading 307
Activities in the Supply Chain 225 12 Transport 308
Introduction 309
9 Procurement 227
Mode of Transport 310
Definitions 228
Intermodal Transport 319
Choosing Suppliers 232
Ownership of Transport 321
Procurement Cycle 236
Routing Vehicles 325
Types of Purchase 242
Discussion Questions 331
Discussion Questions 249
References 331
References 249
Further Reading 331
Further Reading 250
13 Global Logistics 332
10 Inventory Management 251
International Trade 333
Reasons for Holding Stock 252
Problems with International Logistics 338
Economic Order Quantity 259
Organising International Operations 342
Uncertain Demand and Safety Stock 267
Discussion Questions 349
Periodic Review Systems 270
References 349
Effort of Stock Control 274
Further Reading 349
Discussion Questions 280
References 281 Index 350
Further Reading 281
List of Figures
1.1 Spectrum of products 5 4.5 Capacity of a supply chain set by the
1.2 Operations creating outputs 5 bottleneck 92
1.3 Cycle of supply and demand 6 4.6 Summary of logistics at Ralston
1.4 The role of logistics 6 Energy Systems s.r.o. 93
1.5 Outline of the supply chain for paper 8 4.7 Deming wheel 97
1.6 Activities in a supply chain 9 4.8 Rate of performance improvement 100
1.7 Supply chain around a manufacturer 9
5.1 Break-even analysis for location of
1.8 Using intermediaries to simplify the
Warwick Supplies 108
supply chain 12
5.2 Hierarchy of decisions for locations 109
1.9 Examples of organisational structure 16
5.3 Alternative choices of location 114
1.10 Influence of logistics on ROA 21
5.4 Variation in transport cost with
2.1 Summary of logistics activities 35 location 115
2.2 Three levels of logistics integration 40 5.5 Calculation of centre of gravity 116
2.3 Varying demand 40 5.6 Locations for van Hendrick Industries 117
2.4 Spectrum of relationships 46 5.7 Weakness of the centre of gravity
2.5 Different levels of vertical integration 49 method 117
5.8 Map for Bannerman Industries 120
3.1 Types of strategic decision 61 5.9 Comparison of sites 121
3.2 Role of logistics managers in strategic 5.10 Variation in transport cost with
decisions 63 number of facilities 121
3.3 Different amounts of input from 5.11 Finding the optimal number of
logistics managers 63 facilities 122
3.4 Factors in the design of a logistics 5.12 Map of Ian Bruce’s problem 127
strategy 74 5.13 Spreadsheet of calculations for
Ian Bruce 127
4.1 Levels of decision in logistics 86
5.14 Road network showing travel time
4.2 Structure of a supply chain 87
in minutes between locations 129
4.3 Different shapes of supply chain 88
5.15 Solution to the covering problem 129
4.4 Simplified supply chain for
5.16 Network for Problem 6 135
distributing shoes 89
