SCM: What is it? How to do it?

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1 : What is it? How to do it? Paul D. Larson, Ph.D. ICIL 005 Montevideo, Uruguay February 7

2 versus Logistics: Four Perspectives Traditionalist Re-labeling Logistics Logistics Unionist Intersectionist Logistics Logistics

3 Traditionalist Logistics Logistics hires supply chain analysts to focus on cross-functional, inter-organizational issues.

4 Stock & Lambert (00) The logistics community has tended to view supply chain management as logistics outside the firm.

5 Re-labeling Logistics Logistics Manager Supply Chain Manager

6 Simchi-Levi et al. (000) do not distinguish between logistics and supply chain management (). supply chain = logistics network

7 Unionist Logistics = purchasing + logistics + operations + marketing +...

8 Mentzer et al. (00) all the traditional business functions should be included. Marketing & Sales. Research & development. Forecasting 4. Production 5. Purchasing 6. Logistics 7. Information systems 8. Finance 9. Customer service

9 encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, is also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thirdparty service providers, and customers.

10 Intersectionist Logistics staff function; internal consultants

11 Intersectionist considers strategic, integrative elements from several functional areas (logistics, purchasing, operations, and marketing). However, it does not get involved in tactical elements, such as picking orders in a warehouse.

12 The Breadth & Depth of Breadth Depth NARROW BROAD SHALLOW Traditionalist Intersectionist DEEP Re-labeling Unionist

13 Study : Survey of Educators 88 Logistics/ Course Content Items Rated from 0 (no importance) to 5 (very high importance) for both Logistics & -page survey Transmitted via fax Follow-up via , then postal service Drawing for $00.00 R = 98/08 = 47. percent Larson and Halldórsson (004)

14 Logistics vs. : Items with Greatest Significant Differences > Logistics Items t Logistics > Items t Conflict Management 8.8 Picking & Packing -9.7 Early Supplier Involvement 8.04 Warehousing Transportation Supplier Development 7.9 FOB origin/destination Channel Management 6.7 Warehouse Management Systems -6.9 Partnerships/Alliances 6.57 Logistics Management -6. Strategic Management 6.4 Facility Location -6.0 Supplier Selection 5.87 Deregulation -5.9 Supply Management 5.86 Re-order Point (ROP) SCOR Model 5.6 Cross-docking -4.0 Team Work 5.4 Tracking & Tracing -4. Core Competence 5.5 Foreign Trade Zones -4.0

15 Logistics vs. : Top Ten Lists Item Mean Logistics Item Mean 4.95 Customer Service 4.78 Information Technology 4.70 Logistics Management 4.75 Customer Service 4.66 Inventory Management 4.65 Alliances 4.57 Transportation 4.6 e-commerce 4.56 Information Technology 4.50 Cycle Time Reduction 4.49 Cycle Time Reduction 4.40 Channel Management 4.4 Warehousing 4.4 Inventory Management 4.9 e-commerce 4.0 WWW/Internet Globalization 4. Third-Party Logistics 4.7 Logistics Management 4.

16 abs raw = re-labeling = unionist = traditionalist 4 = intersectionist Cluster Analysis: The Four Perspectives Raw = Σ( i Log i ) Abs = Σ i Log i

17 Study : Survey of Logistics Executives Average Experience 4.9 years Average Total Employees 5,09.6 Average Employees Average Sales (00) $7.6 billion Average Budget 9.9 percent Larson, Poist and Halldórsson (005)

18 Industry of the Respondents Supply Chain Role or Industry Manufacturing Third-party logistics (PL) Retailing Transportation Wholesaling Warehousing Other Percent 4.%.% 0.6% 8.7% 7.7%.8% 5.8%

19 versus Logistics: Four Perspectives Traditionalist (9%) Re-labeling (6%) Logistics Logistics Unionist (47%) Intersectionist (8%) Logistics Logistics

20 Table. Perspective Popularity & Organizational Impact Perspective Percent of Respondents Average Number of Functions Involved Average Number of Employees Re-titled Unionist 47% Intersectionist 8%. 9. Traditionalist 9%.9 6. Re-labeling 6%.5 4.4

21 Table. Implementation Characteristics Characteristic Mean* t** p-value Easy () vs. Difficult (7) Narrow () vs. Broad (7) in scope Inexpensive () vs. Expensive (7) Fast () vs. Slow (7) * Compared to your objectives or expectations, implementation was (4 = as expected): ** One-sample t-test (H o : mean 4)

22 Table. Implementation Facilitators Facilitator Mean* t** p-value Top management support Customer relationships Organizational re-structuring Integrated Logistics Management * Please rate the impact of each of the following as facilitators to implementing at your organization. (0 = none; = mid-range; 5 = very high) ** One-sample t-test (H o : mean )

23 Table 4. Implementation Barriers Barrier Mean* t** p-value Functional silos Incompatible technology/systems Lack of a common perspective Conflict among supply chain members Inadequate employee skills * Please rate the impact of each of the following as barriers to implementing at your organization. (0 = none; = mid-range; 5 = very high) ** One-sample t-test (H o : mean )

24 Selected Conclusions from Survey. Primary facilitators are behavioral; e.g. top management support, customer relationships, organizational structure.. 4PL, SCOR model and consultants rate very low as facilitators.. barriers are behavioral and technological; e.g. functional silos, conflict, incompatible technology/systems.

25 Muchas gracias! Any questions?

26

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