Global Supply Chain And Logistics Management Authors Nguyen Hoang Tien PhD, Saigon International University, University in Ho Chi Minh City, Vietnam Dinh Ba Hung Anh PhD, Ho Chi Minh City University of Technology, University in Ho Chi Minh City, Vietnam Tran Duy Thuc Dong Du Investment and Consulting Company, Ho Chi Minh City, Ho Chi Minh, Vietnam Publication Month and Year: December 2019 Pages: 162 E-BOOK ISBN: 978-81-944644-0-2 Academic Publications C-11, 169, Sector-3, Rohini, Delhi, India Website: www.com Email: publishbookonline@gmail.com Phone: +91-9999744933 Foreword Marketing has strong influences on the management of a firm, internal, inter- firm relationships, and the supply chain. The marketing, as a business philosophy, guides firms to look for customer satisfaction at profit in a coordinated manner. Marketing means a basic set of values and beliefs about the importance of the customer that guide the firms in their daily operations. Marketing also provides philosophical foundation for human behaviors within a firm.
In other words, marketing as a business philosophy, guides a firm's behaviors to develop, maintain, and enhance inter-firm relationships to satisfy customers. Marketing is also a necessary component for implementing supply chain management. One of the components of supply chain management implementation is partnership with compatible corporate philosophies, at least for key relationships. Marketing should be the compatible supply chain partners' philosophy, so all partners in the supply chain strive to satisfy customers at a profit through inter-functional coordination within and among the supply chain partners.
Thus, under compatible marketing philosophies, supply chain partners become more willing to be efficient and effective toward a common goal which is customer satisfaction at a profit. Effective supply chain management requires all partners in the chain to build and maintain close long-term relationships. Successful supply chain relies on forming strategic partnerships that means long-term, inter-firm relationships with trading partners. The first book published is about marketing and marketing management, their role and importance to the supply chain management in a global scale.
This book published simultaneously is about the supply chain management on which marketing and marketing management have great impact. As marketing and supply chain are interrelated research areas, both of these books could be useful for university students to study the “Marketing Management” and “Supply Chain Management” courses at both graduate and postgraduate levels. Nguyen Hoang Tien Table of Contents S. Foreword Page No.
Chapter - 1 Introduction to Supply Chain Management 01-32 1.1 Trends in Market Environment 01 Supply Chain Management and Logistics 1.2 04 Management Roles of Supply Chain Management in 1.4 Barriers to Effective Supply Chain Management 13 1.1 Barriers to Effective Supply Chain Management 13 1.2 Overcoming the Barriers 15 1.5 Model and Future of Supply Chain Management 19 1.1 Model of Supply Chain Management 19 1.3 The Future of Supply Chains 25 1.2 Functional to Process Integration 26 1.3 Vertical to Virtual Integration 27 1.4 Customizing and Postponement 28 1.4 Challenges of Supply Chains 30 2. Chapter - 2 Warehousing 33-64 Warehousing as Integrated Supply Chain 2.2 Warehouse Strategy and Functionality 35 2.3 Warehouse Operations and Storage 44 2.1 Movement Continuity and Materials Handling 44 2.1 Active Warehouse Storage 47 2.2 Extended Warehouse Storage 47 2.1 Site Selection 55 Product-Mix, Future Expansion and Materials 2.3 Layout and Sizing 57 2.4 Initiating Warehouse Operations 59 2.3 Warehouse Management Systems 61 2. Chapter - 3 Inventory Management 65-86 3.1 Inventory as Critical Component of Supply Chain 65 3.2 Inventory Flow and Functionality 67 3.2 Taxes, Insurance and Obsolescence 72 3.4 Inventory Planning and Management Practices 73 3.1 Determining When to Order 74 3.2 Determining How Much to Order 74 3.1 Role of Safety Stock 77 3.2 Safety Stock Techniques 77 3.5 Lead Time Issues and Bullwhip Effect 79 3.1 Lead Time Issues of Inventory 79 3. Chapter - 4 Transport and Distribution 87-106 Transport Functionality, Principles and 4.1 Role of Transportation to Supply Chain 87 4.2 Effective Transport System 92 4.3 Transport Cost Characteristics 94 4.1 Variable and Fixed Costs 94 4.3 Cost Characteristics by Mode 95 4.4 Carrier Pricing Strategy 98 4.1 Total Cost Concept 99 4.
Chapter - 5 Measurement and Control 107-128 5.1 The Importance of Performance Measurement 107 5.2 Total Cost Analysis and Trade-Offs 109 5.1 Total Cost Analysis Concept 109 5.2 Cost Trade-Offs 110 5.3 Approaches to Measure SCM Performance 110 5.1 The Balanced Scorecard 111 5.2 The SCOR Model 111 5.1 Process Reference Model 112 5.2 Scope of SCOR Processes 112 5.3 Four Levels of SCOR Process Model 115 Applications and Benefits of Using the SCOR 5.3 The Logistics Scoreboard 116 5.4 Activity Based Costing 117 5.5 Economic Value Added 117 5.4 Selecting and Implementing Measurements 118 5.1 Function-Based and Supply Chain Measures 119 5.2 Implementing Performance Metrics 123 5.5 Strategic Logistics Plan 126 5.1 Importance and Hierarchy of Planning 126 5.2 Strategic Planning Process 127 6. Chapter - 6 Supply Chain Management in Light of Strategic 129-158 Alliance 6.1 Level of Logistics Partnership 129 6.2 Logistics Partnership Decision 130 6.2 Model for Strategic Alliance Development 134 6.3 Trust and Challenges to Strategic Alliance 135 6.1 Developing Trusting Relationships 135 6.2 Challenges to Strategic Alliance 137 6.4 Third Party Logistics 139 6.2 Third Party Logistics Development 142 6.5 Fourth Party Logistics 150 Reference 159-162 List of Figures Fig 1 Supply Chain Management and Logistics Management 08 Fig 2 Logistics Activities in Supply Chain 09 Fig 3 Intermediaries in Supply Chain Model 19 Fig 4 Levels of SCOR Model 23 Fig 5 Warehousing and Other Logistical Functions 34 Fig 6 Consolidation and Break-Bulk 38 Fig 7 Assortment Applications 39 Fig 8 Straight-Line Product Flow Concept in Warehouse Design 56 Fig 9 Two Materials Handling Systems and Their Layouts 58 Fig 10 Inventory as Critical Component in Supply Chain 67 Fig 11 Economic Order Quantity 75 Fig 12 Relationships between Transportation Participants 90 Fig 13 Cost Conflict between Transportation and Inventory as Functions in Supply Chain Management 100 Fig 14 Trade-Offs in Supply Chain and Logistics Systems 101 Fig 15 The Process Reference Model 112 Fig 16 SCOR Model 114 Fig 17 04 Levels of SCOR Model 115 Fig 18 Benefits of Cross-Functional, Process-Based Measures 120 Fig 19 Level of Logistics Partnership 130 Fig 20 Logistics Partnership Decision 131 Fig 21 Model for Strategic Alliance Development 135 Fig 22 Forms of Logistics Activities 141 rd Fig 23 3 Party Logistics Functions 149 Fig 24 4PL Platform 152 List of Tables Table - 1 Key and Support Logistics Activities in Supply Chain 09 Table - 2 Advantages and Disadvantages of Private Warehouse 49 Table - 3 Advantages and Disadvantages of Public Warehouse 51 Table - 4 Public Warehouses’ Services 52 Table - 5 Advantages and Disadvantages of Contract Warehouse 53 Table - 6 Warehousing Modes’ Cost Structure Comparison 54 Table - 7 Selected Data for Consumer and Industrial Goods Manufacturers and Merchandisers 68 Table - 8 Inventory Cost Components 73 Table - 9 Transportation Modes Comparison 97 Table - 10 Types of Firms Interested in using Time and Forms of Postponement 105 Table - 11 Characteristics of Firms Interested in using Time and Forms of Postponement 105 Table - 12 Supply Chain Measures 121 Table - 13 Strategic Alliance Understandings 132 Table - 14 Forms of Logistics Activities 141 Table - 15 Services Provided by 3PLs 148 Table - 16 Top 10 World 3PLs Companies 149 Table - 17 Top USA 3PLs Companies 150 Table - 18 Characteristics and Fundamentals of 4PL 154 Table - 19 Challenges and Issues within 4PL Environment 157 Chapter - 1 Introduction to Supply Chain Management Objectives Define logistics management and SCM Understand impact of SCM on organization performance Understand the SCM model and barriers to effective SCM Establish roles of intermediaries in supply chains 1.1 Trends in Market Environment In the last decades, managers have witnessed a period of change unparalleled in the history of the world in terms of advances in technology, globalization of markets, and stabilization or turbulence of world economies. With the increasing number of world-class domestic and foreign competitors, organizations have had to improve and integrate their internal and external processes rapidly in order to stay competitive. In 1960s and 1970s, companies started developing detailed market strategies focused on creating and capturing customer loyalty.
Organizations also realized that strong engineering, design, and manufacturing functions were necessary to support these market requirements. Design engineers had to be able to translate customer needs into product and service specifications, which then had to be massively produced at a high level of quality and sold in a wide scale at a reasonable cost. As the demand for new products escalated in the 1980s, manufacturing organizations were required to become increasingly flexible and responsive to modify existing products and business processes or to develop new ones in order to meet ever-increasing customer needs. In the 1990s, as internal manufacturing capabilities improved, managers realized that material and service inputs from suppliers had a major impact on their organizations' ability to meet customer needs.
This led to an increased focus on the supply base and the organization's sourcing strategy. Later on, managers also realized that producing a quality product was not enough. Getting the products to customers when, where, how, and in the quantity that they wanted, in a cost-effective manner, constituted an entirely new type of challenge. The logistics renaissance has Page | 1 been now a really rising trend, spawning a whole set of time-reducing information technologies and logistics networks aimed at meeting these challenges.
These are the reasons why companies have to not only strengthen themselves but also take care and pay attention to the partners on their supply and demand side, considering themselves not as a central player but a part of the interrelated network, a linkage of the whole, global value chain. The rules of business have changed. In today's environment, new products are launched and new businesses are set up every day. Customers are increasingly demanding, very difficult to keep and costly to replace.
Companies face intense competition from traditional powerhouses (current competitors) and new players (potential competitors), and must continue to find new revenue opportunities and new way to increase efficiencies in terms of reducing cost. Today more than ever, businesses depend on strategic relations with their customers and suppliers in terms of providing services to create value systems that will enhance competitive edge for all sides in the market. In effect, there is a new network economy that has emerged where companies trade with suppliers and customers over the Internet in real time. The virtual corporation is now a reality, with companies outsourcing a wide range of functions including design, manufacturing, distribution, and others so that they can really focus on their core competencies.
However, ensuring a seamless, consistent cooperation with customers and suppliers to create values together requires real-time automation of inter-organizational business processes that span across trading partners worldwide. Traditional business practices, such as e-mail, faxes, and voice mail introduce delays and often require data to be re-entered multiple times due to the total lack or integration. Hence, the need for dynamic business-to-business (B2B) integration that can automate business processes that encompass a diverse range of packaged applications and legacy systems within the corporation and among supply chain members. The ability to develop these B2B relationships and realize their potential in the shortest possible time is critical to the long-term success of any modern business.
Indeed, no business can afford not to efficiently automate business processes with trading partners. Businesses are continually forging closer ties with their partners, suppliers and customers. Customers expect to be informed about state of transaction completion, 365 days a year, seven days a week and round the clock. Rather than adding the costly human resource traditionally required to maintain such a level of service, customers now interact directly with company via automated e-mail systems, self-service Web sites and information portals.
Companies are empowering their customers to help themselves to their information.