INTRODUCTION TO LOGISTICS

AND SUPPLY CHAIN MANAGEMENT

PORT MANAGEMENT &
LOGISTICS
Lecturer: MSc. Nguyen Truong Vinh Phu
Email: phuntv.tg@ut.edu.vn
Mobile: 0964.180.988
 Chapter 1: Overview of Supply Chain Management

Chapter 2: Overview of Logistics

Chapter 3: Information Technology in Logistics & SCM

Chapter 4: Distribution Channel Management

Chapter 5: Modes of Transport

Chapter 6: E-commerce and E-logistics

Chapter 2: Overview of Logistics
1. Historical milestones of Logistics
2. Some concepts of Logistics
3. Basic content of Logistics Management
4. Roles of Logistics
5. Logistics Classifications
6. Development Trends of Logistics
1. Historical Milestones of Logistics

Logistics goes back a long way… but the term “Logistics” was mainly used in military

- Logistics is first mentioned in Sun Tzu’s Art of War – 500 BC. “The line between disorder and order lies in

logistics…”

- Alexander the Great produced a logistics system to support troops rather than rely on living off the land

- Romans introduced supply lines and supply depots at 30 km intervals (one day’s march)

- Napoleon planned his logistics campaigns well and logistics and supply was a top priority. “The amateurs

discuss tactics: the professionals discuss logistics.”

- “Behind every great leader there was an even greater logistician.” – M. Cox

- Napoleon and Hitler fell foul of supply chains which became too long causing a great deal of disruption and

ultimately – failure. Supply lines were always a target for enemy forces
History and Evolutions of Logistics
2. Some concepts of Logistics

Logistics is that part of the supply chain process that plans, implements, and controls the
efficient, effective flow and storage of goods, services, and related information from the point-of-
origin to the point-of- consumption in order to meet customers' requirements.
The definition includes inbound, outbound, internal and external movements and return of
materials for environmental purposes.
Council of Supply Chain Management Professionals
Logistics definition

“Logistics is the process of strategically managing the

procurement, movement and storage of materials, parts
and finished inventory (and the related information flows)
through the organization and its marketing channels in
such a way that current and future profitability are
maximized through the cost-effective fulfilment of orders.”

Martin Christopher
Various views of Logistics
• Inventory
Management of materials in motion and at rest.

• Customer
Getting the right product, to the right customer, in the right quantity, in the right condition, at the right
place, at the right time, and at the right cost (called the dictionary “seven Rs of logistics”).

• International Society of Logistics

The branch of military science having to do with procuring, maintaining, utility/ value and transporting
material, personnel, and facilities.

• Council of Supply Chain Management

The art and science of management, engineering, and technical activities concerned with requirements,
design, and supplying and maintaining resources to support objectives, plans, and operations.
Various views of Logistics
• Component support
Providing time and place utility/value of materials and products in support of Functional management
organization objectives.

• Common culture
- That part of the supply chain process that plans, implements, and controls the efficient, effective flow and
storage of goods, services, and related information from point of origin to point of consumption in order to
meet customer requirements .
- Supply management for the plant (inbound logistics) and distribution.
- Management for the firm’s customers materials requirements, purchasing, transportation, inventory
management, warehousing, materials handling, industrial packaging, facility location analysis, distribution,
return goods handling, information management, customer service, and all other activities concerned with
supporting the internal customer (manufacturing) with materials and the external customer (retail stores) with
product.
7 R’s of Logistics
7 R’s of Logistics
• Right Product
Selecting the right product is the first step in effective logistics management. It involves understanding
customer demands, market trends, and quality requirements. By offering the right product, businesses can
meet customer expectations and ensure customer satisfaction.
• Right Quantity
Determining the appropriate quantity of products is crucial to avoid overstocking or stockouts. By accurately
forecasting demand and maintaining optimal inventory levels, businesses can reduce storage costs and
improve operational efficiency.
• Right Condition
Ensuring that products are in the right condition is vital, especially for perishable goods or items with specific
handling requirements. Proper packaging, temperature control, and handling procedures are essential to
maintain product integrity and prevent damage during transportation.
• Right Place
Delivering products to the right place involves efficient transportation and distribution networks. Optimizing
routes, selecting reliable carriers, and utilizing advanced tracking systems contribute to timely and accurate
deliveries, reducing lead times and enhancing customer satisfaction.
7 R’s of Logistics
• Right Time
Timeliness is crucial in logistics. Delivering products at the right time helps businesses meet customer
expectations and maintain a competitive edge. By minimizing transit times and ensuring prompt deliveries,
businesses can build trust and establish long-lasting relationships with customers.
• Right Customer
Understanding customer preferences and tailoring logistics processes accordingly can greatly impact
customer satisfaction. By personalizing deliveries, providing real-time tracking information, and offering
flexible delivery options, businesses can create a positive customer experience and gain a competitive
advantage.
• Right Cost
Optimizing costs throughout the logistics process is vital for businesses to remain competitive. By adopting
cost-effective transportation methods, streamlining warehouse operations, and leveraging technology for
efficient inventory management, businesses can minimize expenses while maximizing profitability.
Various views of Logistics
• Component support
Providing time and place utility/value of materials and products in support of Functional management
organization objectives.

• Common culture
- That part of the supply chain process that plans, implements, and controls the efficient, effective flow and
storage of goods, services, and related information from point of origin to point of consumption in order to
meet customer requirements .
- Supply management for the plant (inbound logistics) and distribution.
- Management for the firm’s customers materials requirements, purchasing, transportation, inventory
management, warehousing, materials handling, industrial packaging, facility location analysis, distribution,
return goods handling, information management, customer service, and all other activities concerned with
supporting the internal customer (manufacturing) with materials and the external customer (retail stores) with
product.
Logistics Activities
Business logistics
• Integrated logistics
serves to link and Physical supply Physical distribution
synchronize overall (Materials management)
supply chain
connectivity
• Logistics is a component Source Plants/
of supply chain. of supply Operations Customers
• Transportation • Transportation
• Inventory maintenance • Inventory maintenance
• Order processing • Order processing
• Acquisition • Product Scheduling
• Protective packaging • Protective packaging
• Warehousing • Warehousing
• Materials handling • Materials handling
• Information maintenance • Information maintenance
Physical Flow in Logistics

Materials

Whole sellers
Consumers

Factory Warehouse Transportation/

Distribution

Retailers
Physical Flow in Logistics

WAREHOUSE
The collaboration of
Warehouse –
Transportation -
Distribution is the key TRANSPORTATION
element in generating the
physical flow from
enterprise to the end-
user
DISTRIBUTION
Questions 1: Logistics in the Beer Supply Chain
3. Basic contents of Logistics Management

“The process of planning, implementing and controlling the efficient, effective flow and storage of goods,
services and related information from point of origin to the point of consumption for the purpose of
conforming to customer requirements”

Logistics management is the means whereby the needs of customers are satisfied through the co-
ordination of the materials and information flows that extend from the marketplace, through the firm and
its operations and beyond that to suppliers.

The mission of logistics management is to plan and co-ordinate all those activities necessary to achieve
desired levels of delivered service and quality at the lowest possible cost.
Logistics Management

Raw Materials
Production
Components Process
Depots
•Finished Goods
Packaging Sub- •Packaging
•Inventory
Materials Assembly •Unitisation
•Warehouse
Product
Work-In- Distribution Centres
Sourcing
Progress
Imported
Materials REVERSE LOGISTICS
Procurement End Users
Materials Management
Distribution
L O G I S T I C S
Logistics Management Process
4. Roles of Logistics

The scope of logistics spans the organization, from the

Link
management of raw materials through to the delivery of the

final product:
The scope
💡 - The link between the marketplace and the supply base. of logistics

💡 - The planning concept that seeks to develop a system-

Force for Planning
wide view of the firm. change concept

💡 - The driving force for organizational change.

Benefits of Logistics

Transport of goods or services

from a specific sender to a
specific destination at a specific,
intended time.

Location Benefit Time Benefit

Form Benefit
Storage of goods and
Processing of certain services for a specific time
materials into other materials
Assembly of some semi-
manufactured articles of parts
Destruction
15 Functions of Logistics

Traffic &
Salvage & Warehouse
Transport
Parts & scrap
Service disposal & Storage Industrial
Support Packaging
Return
goods Material
handling Handling
Facility BUSINESS Inventory
Location LOGISTICS Control
Customer Order
Service Processing
Purchasing /Fulfillment
Logistics
Procurement Production Demand
Information
Planning Forecasting
5. Logistics Classification
Business logistics Military logistics Event logistics Service logistics

• The planning, • The design and • The network of • The acquisition,

implementation & integration of all activities, facilities, scheduling, and
control of the aspects of support and personnel management of the
efficient & effective for the operational required to organize, facilities/assets,
flow and storage of capability of the schedule, and personnel, and
goods, services & military forces deploy the resources materials to support
related information (deployed or in for an event to take and sustain a
from point of origin garrison) and their place and to service operation or
to point of use or equipment to ensure efficiently withdraw business.
consumption in readiness, reliability, after the event.
order to meet and efficiency.
customer
requirements.
Logistics Classifications

Logistics and Supply Chain Framework. Source: Akbari, M. (2018), “Logistics Outsourcing: a Structured Literature Review”, Benchmarking: An International Journal, Vol. 25 Iss: 5, pp. 1548-
1580 https://doi.org/10.1108/BIJ-04-2017-0066
Logistics Classifications
INBOUND OUTBOUND REVERSE
LOGISTICS LOGISTICS LOGISTICS

The management of The process related to is the process of planning,

materials from suppliers the movement and implementing, and controlling the
and vendors into storage of products from efficient, cost-effective flow of raw
production processes or the end of production line materials, in-process inventory,
storage facilities. to the end user. finished goods and related
information from the point of
consumption to the point of origin for
the purpose of recapturing value or
proper disposal
Classifications of Party Logistics (PL) Providers
Classifications of Party Logistics (PL) Providers
• 1PL - First Party Logistic provider: The
manufacturer or the industrial actor does not
outsource transport and logistic activities to third
parties. These functions are carried out by the
company’s own departments.

• 2PL - Second Party Logistic provider: An

organization or enterprise that maintains assets (like
vehicles or airplanes) to transport products from one
place to another is a 2PL.
Classifications of Party Logistics (PL) Providers
• 3PL - Third Party Logistics provider: The manufacturer outsources his transport and logistic activities
to 3PL logistic providers. They are responsible for each and every activity like Transport, Warehousing,
Packing, Inventory management, Freight forwarding activities, till it reaches to receiver. He acts as a
bridge between manufacturer and receiver in supply chain activity. They may have their own services or
hire third parties.
Classifications of Party Logistics (PL) Providers
• 4PL – Fourth Party Logistics provider: Entrepreneur outsources the management of logistics
activities as well as the implementation throughout the supply chain. manages entire logistics
functions in supply chain.
Classifications of Party Logistics (PL) Providers
• 5PL - Fifth party logistics provider: A 5PL will plan, organise and implement a client’s logistics
solutions, taking all elements of supply chain management out of their hands. Their focus
on supply networks means they’ll oversee every single supply chain within an organization.
Question 2: Define levels of Party Logistics Provider
1. A farm uses their own trucks and personnel to do packaging and then deliver their products from factory
to grocery stores.

2. To reduce cost, the Farm hires a Trucking company who own 10 trucks to transport their products from
the farm to the supermarket. The Trucking company uses their own trucks for the transportation.

3. To improve the efficiency, the Farm requests the Trucking company in case #2 to handle its logistics
operation (labelling & packaging) under the management from the Farm’s logistics manager.
Question 2: Define levels of Party Logistics Provider
4. Next, the Farm in case #3 outsource its logistics management to a Freight Forwarder Company which
outsources trucking and labelling services from the Trucking company.

5. First Solar hires Viet A Logistics to handle a part of his logistics operation (trucking cargo from the
factory to customers) under the management of First Solar. Viet A can only trucks 10x40’’FCL per day but
the demand from their customer is 50x40’’FCL. Then Viet A outsources trucking service from other trucking
companies to do logistics operation for First Solar.

6. As a change in the management strategy, First Solar have Kuehne + Nagel manage its logistics
operation (managing Viet A Logistics and communicate with internal stakeholders in the supply chain for
logistics operation).
6. Development trends of Logistics
• Logistic & Supply Chain Trends
 External Forces
 Optimization
 Risks
• Sustainability
• Technology
• Equipment Advances
• Warehousing
• Modal Trends
“The Past Does Not Reflect the Future”

Demographics
– urbanization, aging population, shifting wealth and economic power

Technology
– social media, new communication technologies, “Cloud” based economy

Health and Safety

– visibility/ accountability for consumers, suppliers, manufacturers

Sustainability
– scarcity

– CO2, climate change, alternative fuels

Regulatory Pressures’'
Modal Trends
• 3PL Integrated Operations Warehousing / Transportation
• 4PL trademarked by Accenture – Integrator of Resources
• Regional hub / distribution into cities
• E Commerce
Question 3:
Distinguish the difference between SCM vs Logistics
 Logistics Supply Chain
Logistics is a part of supply chain Supply chain management covers a wide range of activities,
management. including planning, sourcing materials, labor and facilities
management, producing and delivering those goods and
services.
Logistics focuses on the efficient and Supply chain management targets higher operational
cost-effective delivery of goods to the performance that will give the business a competitive advantage.
customer.
Logistics started with the military. The modern practice of supply chain management started in the
20th century. The Ford Motor Company production lines
perfected the concept. Many credit logistician Keith Oliver as the
person who coined the term in the early 1980s.
Logistics are centered on the movement SCM oversees the development of raw materials into finished
and transport of goods within a company goods that move from the producer to the manufacturer. Those
goods get distributed to retailers or directly to consumers.
Question 4:
Advantages of 3PL in Logistics
Question 4: Advantages of 3PL in Logistics

Cost Savings

Access to Expertise

Focus on Core Competencies

Scalability

Risk Mitigation

Resource Network

Customer Satisfaction