Ho Chi Minh City University of Transport

Module:
Logistics Management

Compilators: Dr. Le Phuc Hoa, MSc. Nguyen Thi Bao Khanh

Lecturer: MSc. Nguyen Thi Bao Khanh
Email: [email protected]

1
 MODULE ASSESSMENT
1. Assessment Form
Weighting Weighting
Components Description
(In-class) (Online)
1. Class participation (5%) (10%)
Evaluation of
2. Personal Quizzes (10%) (20%) 30% 50%
the process
3. Mid-term test (15%) (20%)
- 10 multiple choice questions (40%) + 3 essay
questions (60%)
Final exam 70% 50%
- Closed test, no material is allowed
- Duration: 90 minutes

2. Personal Quiz
• Quantity: 2 quizzes at the beginning of 2 random lectures
• Content: including 10 MCQs about previous lesson’s knowledge
• Duration: 10 minutes
3. Mid-term test
• Time: Week 11 (After completing Chapter 6)
• Content: 7 multiple choice questions + 2 essay questions
• Duration: 60 minutes

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 COURSE OBJECTIVES

After completing this course, students should be able to:

1. Develop a comprehensive understanding about the nature of Logistics, typical

Logistics flows, Logistics cost, components of a Logistics system, Logistics
organizational structure and container Logistics

2. Analyze a typical Logistics system

3. Design and implement a Logistics system

4. Measure the performance of Logistics and Supply Chain Operations

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 COURSE STRUCTURE

CHAPTER 1: INTRODUCTION ABOUT LOGISTICS

CHAPTER 2: INTRODUCTION ABOUT BUSINESS LOGISTICS
CHAPTER 3: TYPICAL LOGISTICS SYSTEMS
CHAPTER 4: LOGISTICS COSTS
CHAPTER 5: WAREHOUSE AND WAREHOUSING
CHAPTER 6: TRANSPORTATION OPERATIONS
CHAPTER 7: CUSTOMER SERVICES
CHAPTER 8: LOGISTICS INFORMATION SYSTEM
CHAPTER 9: LOGISTICS SYSTEM ANALYSIS AND DESIGN
CHAPTER 10: LOGISTICS SERVICE ACTIVITIES
CHAPTER 11: MEASURING PERFORMANCE OF LOGISTICS ACTIVITIES
CHAPTER 12: INCOTERMS AND INTERNATIONAL CONTRACTS SALE OF GOODS

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 COURSE MATERIALS

[1]-Alan Harrison and Remko van Hoek (2008), Logistics Management and Strategy, Nxb FT
Prentice Hall
[2]-Alan E. Branch (2009), Global Supply Chain Management and International Logistics,
Routlege
[3]-Chính phủ Việt Nam (2017), Nghị định 163/2017/NĐ-CP về kinh doanh dịch vụ logistics
[4]-Douglas M.lambert. James R.Stock,Lisa M. Ellram, Fundamentals of Logistics
Management, Mc grow Hall,1998
[5]-Donald J. Bowersox and David J. Closs (1996), Logistical Management, McGraw-Hill
[6]-Lê Phúc Hòa (2008), Xây dựng mô hình tổng quan về logistics container cho các công ty
vận tải container đường biển Việt Nam, Luận án TS
[7]-Lê Phúc Hòa, “Bản chất của logistics, mục tiêu và các hoạt động chủ yếu của nó”, Tạp
chí Giao thông vận tải, 5/2005, tr.51-52.
[8]-Lê Phúc Hòa, “Vai trò của vận tải nói chung và vận tải biển nói riêng trong dây chuyền
cung ứng”, Báo cáo khoa học tại Hội nghị khoa học- khoa Kinh tế vận tải–ĐHGTVT Tp.HCM,
tháng 4 năm 2006

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 COURSE MATERIALS
[9]-Lê Phúc Hòa, “Các nguyên tắc cơ bản khi nghiên cứu, thiết kế và thực hiện hệ thống logistics”,
Tạp chí Giao thông vận tải số: 04/2012; Tạp chí Khoa học công nghệ giao thông vận tải (ĐHGTVT
TpHCM), Số: 2-4/201
[10]-Đặng Đình Hào, Trần Văn Bảo, Phạm Cảnh Huy, Đặng Thị Thúy Hằng (2018), Giáo trình Quản
trị logistics, Nxb Tài Chính
[11]-ICC (2010), Incoterm 2010, Nxb thông tin và truyền thông
[12]-Trường đại học Kinh tế Tp HCM (2012), Quản trị hậu cần, Nxb Đại học kinh tế quốc dân
[13]-Langley/Coyle/Gibson/Novack/Bardi (2008), Managing Supply Chain, South-Western
[14]-Martin Christopher (2005), Logistics and Supply Chain management, Prentice Hall.
[15]-James C.Johnson, Donald F.Wood, Daniel L.Wardlow, Paul R.Murphy,Jr (1999), Contemporary
Logistics, Prentice Hall
[16]-John J Coyle, Eward J.Bardi, C.John langley Jr. (2003), The Management of Business
Logistics, Thomson Learning
[17]-Patrik Jonsson (2008), Logistics and Supply Chain Management, McGraw-Hill.
[18]-Ronald H. Ballou (1999), Business Logistics Management, Nxb Prentice Hall, 1999
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Ho Chi Minh city University of Transport

CHAPTER 1:
INTRODUCTION ABOUT LOGISTICS

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 CHAPTER OUTLINE

1.1 The formation and concept of Logistics

1.2 Characteristics of Logistics

1.3 Subdivisions of Logistics

1.4 Systems approach in Logistics

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 LEARNING OBJECTIVES

After completing this chapter, students should be able to:

ü Describe the historical development of Logistics

ü Define the concept of Logistics and Logistics Management

ü Explain the characteristics of Logistics Management

ü Categorize the different Logistics activities

ü Understand the concept of System approach to Logistics activities

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 REFERENCE LIST

[4]-Douglas M. Lambert. James R.Stock,Lisa M. Ellram (1998), Fundamentals of

Logistics Management, Mc grow Hall. – Chapter 1
[7]-Lê Phúc Hòa, “Bản chất của logistics, mục tiêu và các hoạt động chủ yếu của nó”,
Tạp chí Giao thông vận tải, 5/2005, tr.51-52.
[12]-Trường đại học Kinh tế Tp HCM (2012), Quản trị hậu cần, Nxb Đại học kinh tế quốc
dân – Chapter 1
[15]-James C.Johnson, Donald F.Wood, Daniel L.Wardlow, Paul R.Murphy,Jr (1999),
Contemporary Logistics, Prentice Hall – Chapter 1
[18]-Ronald H. Ballou (1999), Business Logistics Management, Prentice Hall-
International, Inc. – Chapter 1

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 1.1 THE FORMATION AND CONCEPT OF LOGISTICS

vHow was Logistics born?

Logi
- The term ‘Logistics’ first appeared in the army: st ics
an important part of the army
- Logistics then was used in other aspects of
social life such as production, services, etc.
- Logistics activities are carried out everyday all
around the world, 24 hours/ day, 7 days/ week
and 52 weeks/year

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 What is Logistics?
One of the great myths of supply chain is that
“logistics” is all about “trucks and sheds”

- “Logistics is the process of anticipating customer needs and wants, acquiring the capital,
materials, people, technologies, and information necessary to meet those needs and wants;
optimizing the goods or service-producing network to fulfill customer requests; and utilizing the
network to fulfill customer requests in a timely manner”
Coyle (2003)

- ‘Right Parts, Right Place, Right Time’

Tim Swartz, Director of Supply Chain, Rolls-Royce plc (2000)

- “Logistics Management is that part of supply chain management that plans,

implements, and controls the efficient, effective forward and reverse flow and
storage of goods, services, and related information between the point of origin and
the point of consumption in order to meet customers’ requirements”
Council of Supply Chain Management Professionals (CSCMP)

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 vs
EFFECTI VE EFFICIENT

- Do the right things - Do things right

- Complete the tasks which - Complete the tasks
help to achieve target with the lowest cost
- Effectiveness = Outcome/ - Efficiency = Outcome/
………. ………..

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 1.2 CHARACTERISTICS OF LOGISTICS

- Logistics is a process, which is a series of continuous activities, closely related to

each other, interacting and performed in a scientific and systematic way.

- Logistics management includes 3 main tasks, which are…………….…,

………..………and …..……………

- Logistics involves 3 main movements, including:

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 1.3 SUBDIVISIONS OF LOGISTICS

Military The design and integration of all aspects of support for the operational
Logistics capability of the military forces (deployed or in garrison) and their
equipment to ensure readiness, reliability, and efficiency.

The acquisition, scheduling, and management of the facilities/assets,

Services
personnel, and materials to support and sustain a service operation or
Logistics business.

That part of the supply chain process that plans, implements, and
Business controls the efficient, effective flow and storage of goods, service, and
Logistics related information from point of use or consumption in order to meet
customer requirements

The network of activities, facilities, and personnel required to organize,

Event Logistics schedule, and deploy the resources for an event to take place and to
efficiently withdraw after the event

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 1.4 SYSTEMS APPROACH IN LOGISTICS

1.4.1 Definition of system

- System is a network of related activities with the purpose of managing the orderly flow of
material and personnel with the logistics channel.

1.4.2 Method of system approach

- Approaching the system is a way of looking at problems through their

structure, level and drivers.
- When assessing a system, we should consider whether it is:
+ an open system or a closed system?
+ a big system or a small system (sub-system)?

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1.4.3 Some approaching methods in Logistics

+ The system approach

+ The total cost approach

+ The avoidance of sub-optimization

+ Trade-offs

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vTrade-offs

“You can pick

any two”
Quality

On-Time-In-Full

Cost
Delivery
Direct Spend Lead-Time

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 Goals and objectives of the major functional areas should be
compatible with the company’s goals and objectives

Implications
of the
Systems
approach

Decisions made by one functional area should consider the

potential implications on other functional areas

Dr Le Phuc Hoa, MSc Nguyen Thi Bao Khanh 19

 CASE STUDY 1
Hewlett-Packard’s Systems Approach to Inventory Management
Hewlett-Packard (HP) is a leading global supplier of logistics system by reducing delivery variability. They
computer printers, particularly the ink-jet variety. It has over considered faster shipping modes, such air, to reduce transit
$3 billion invested in inventory worldwide. HP has a division inventory, and inventory held to cover lead times. That
located in Vancouver, Washington, which manufactures and alternative proved too costly.
distributes the DeskJet Plus printer worldwide. It has three However, by looking at the entire system as a whole, HP was
distribution centres, one each in North America, Europe, and able to develop a better solution. It could delay the
Asia. differentiation of printer power sources and manuals until
HP faced a situation where high inventories of printers, firm orders were received. This allowed HP to reduce
approximately seven weeks’ worth, were required to meet inventory to five weeks while maintaining 98% service levels.
their 98% service goal in Europe. High inventories were This saved over $30 million annually. In addition,
required in part because each country has unique power transportation dropped by several million dollars because
cord and transformer requirements, and needs the proper generic printers can be shipped in larger volumes than
language manual. Initially, the ‘differentiation’ of the printers printers specific to a particular country. Because HP viewed
to needs of the local market was done at the Vancouver the system as a whole and understood the interactions, they
facility. HP apparently faced the prospect of high inventory were able to develop this innovative logistical innovation.
costs or reduced customer service levels, neither of which Questions:
was an acceptable option.
The management at the Vancouver site considered many 1. What was HP’s problem?
options for reducing inventory while maintaining customer 2. How did HP solve that problem?
service. They first worked on improving the
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 CASE STUDY 2
The company chose to pay higher transportation costs by
Nike (Europe) moving its shoe inventories farther from their European
Beaverton, Oregon-based Nike, Inc., had built its markets, but realized an even greater saving by dramatically
European distribution in a fragmented way during a reducing its inventory costs. Shoes, however, are small, high-
period of high sales growth during the 1980s. Each value products, and transportation costs form a relatively
country had one or more distributors of Nike shoes, and small percentage of logistics cost. “Increase in transport
each of those distributors operated as independent costs can easily be more than offset by reductions in
business units, providing sales, merchandising, and inventory and warehouse costs. The rule of thumb is that, by
distribution functions. In 1992, when European sales had combining two warehouses into one, your total buffer stock
risen to $1 billion, a distribution system analysis revealed will reduce by about 30%” said Martin Ashford, consultant
serious inefficiencies. Models of shoes popular in to Nike. The savings to Nike were dramatic; they
Germany often sat unsold in warehouses in France. Nike consolidated 25 warehouses into one.
was wasting tens of millions of dollars annually on
inventory. Excess inventory had to be discounted to Questions:
move, despite the fact that the same shoe may have 1. What was Nike’s problem?
been in short supply in a neighbouring country.
The solution Nike chose was to centralize all shoe 2. How did Nike tackle that problem?
distribution for Europe. Taking advantage of the 3. Why did they decide to increase the
economic integration of the European market, Nike built
transport cost instead of reducing
an 850,000-square-food distribution centre in Lakdaal,
inventory cost?
Belgium, close to the ports of Antwerp and Rotterdam.

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