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1 MARTIN CHRISTOPHER Logistics & Supply Chain Management Fifth Edition PEARSON Marlow. England London New York Boston San Francisco Toronto Sydney Auckland Singapore Hong Kong ' Tokyo Seoul Taipei New Delhi Cape Town Säo Paulo Mexico City * Madrid Amsterdam * Mimich * Paris Milan
2 Contents About the author viii Preface xiii Publisher's acknowledgements xiv 1 Logistics, the supply chain and competitive strategy 1 Supply chain management is a wider concept than logistics 2 Competitive advantage 4 The supply chain becomes the value chain 10 The mission of logistics management 11 The supply chain and competitive Performance 13 The changing competitive environment 14 2 Deliveririg customer value 21 The marketing and logistics interface 28 Delivering customer value 29 What is customer service? 31 The impact of out-of-stock 33 Customer service and customer retention 36 Market-driven supply chains 39 Defining customer service objectives 43 Setting customer service priorities 47 Setting service Standards 51 3 Going to market 57 Distribution Channels are value delivery systems 58 Innovation in the distribution Channel 61 The omni-channel revolution 64 Omni-channe! retailing 66 4 Measuring logistics costs and Performance 69 Logistics and the bottom line 70 Logistics and shareholder value 73 Logistics cost analysis 78 The concept of total cost analysis 79 Understanding the cost-to-serve 82 Customer profitability analysis 84 Direct product profitability 90 Cost drivers and activity-based costing 91 ix
3 5 Matching supply and demand 95 The lead-time gap 95 Improving visibility of demand 97 The supply chain fulcrum 99 Forecast for capacity, execute against demand 101 Demand management and planning 101 Collaborative planning, forecasting and replenishment Creating the responsive supply chain 111 Using the volume/variability matrix 115 Product 'push' versus demand 'pult' 117 The Japanese philosophy 122 The agile supply chain 123 The foundations of agility 126 A routemap to responsiveness Strategie lead-time management 135 Time-based competition 135 The concept of lead-time 139 Logistics pipeline management 143 Reducing logistics lead-time The synchronous supply chain 155 The extended enterprise and the Virtual supply chain 156 The role of Information in the Virtual supply chain 158 Laying the foundations for Synchronisation 161 'Quick response' logistics 163 Production strategies for QR 166 Logistics Systems dynamics Complexity and the supply chain 173 The sources of supply chain complexity 174 The cost of complexity 180 Product design and supply chain complexity 180 Mastering complexity Managing the global pipeline 185 The trend towards globalisation in the supply chain 187 Gaining visibility in the global pipeline 192 Financing global supply chains 194 Organising for global logistics 194 Thinking global, acting tocal 199 The future of global sourcing 200 x
4 11 Service logistics 203 What is a service? 203 Buying Performance 204 The service dominant logic 205 The trend to 'servitisation' 205 Implications of servitisation for logistics 207 The critical role of capacity 207 Service supply chain processes 210 Managing the service supply chain Managing risk in the supply chain 215 Why are supply chains more vulnerable? 216 Understanding the supply chain risk profile 219 Managing supply chain risk 224 Achieving supply chain resilience The era of network competition 237 The new organisational paradigm 238 Collaboration and trust in the supply chain 240 Reducing costs through collaborative working 243 'Co-opetition' - co-operating with competitors 245 Managing the supply chain as a network 246 Supply chain orchestration 247 From 3PL to 4PL 249 The last word Overcoming the barriers to supply chain Integration 253 Creating the logistics Vision 254 The problems with conventional organisations 254 Developing the logistics Organisation 258 Logistics as the vehicle for change 262 Benchmarking Creating a sustainable supply chain 269 The triple bottom line 269 Greenhouse gases and the supply chain 271 Reducing the transport-intensity of supply chains 273 Beyond the carbon footprint 274 Reduce, re-use, re-cycle 277 The impact of congestion 279 xi
5 16 The supply chain of the future 283 Emerging mega-trends 284 Shifting centres of gravity 285 Supply chain govemance and compliance 286 The need for adaptability 287 Seeking structural flexibility Vision 291 Waste in the supply chain 291 The New Industriai Revolution 292 Seven major business transformations 294 The implications for tomorrow's logistics managers 296 Index 301 xli
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