Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

1.5 Summary

The chapter defines basic terminology, including product, compo­nents, and the product life cycle. A supply chain is the global network used to perform services and deliver products, from raw materials to consumers, to disposal and recycling. Supply chain manage­ment (SCM) is the design, planning, execution, cont­rol, and moni­tor­ing of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging global supply chains, synchro­ni­zing supply with demand, and measuring perfor­mance globally. SCM is applied along the entire product life cycle, within and across companies.

Business objects correspond to the way the persons involved naturally en­vision them. Some objects are relatively simple, such as worker, business partner, date, time period, item, product, and product family. In addition there exist several quite complicated objects. To these belongs the order itself. Further complex business objects include product structure, process plan, and load profile. We also intro­duced the similarly complex objects of opera­tion, production infra­structure, work center, capacity, and load. Through reducing the degree of detail, we can derive rough-cut business objects, to process certain tasks more simply.

Logistics, operations, and supply chain management highly affect entrepreneurial objecti­ves, such as fill rate, delivery reliability rate, and costs. There are basic conflicts among entrepreneurial objectives. Opportunity cost should be estimated and compared with the primary entrepreneurial objective, return on net assets (RONA). Objectives in the target area of flexibility and agility are important enablers for effective supply chains, as they lay the foundation for future benefits. Agile compa­nies are able to remain competitive by means of the proactive development of know­ledge and competence. Timely implementation of appropriate temporal, local, and quantitative potentials as well as enabling technologies toward personalized production will be competitively decisive.

Appropriate performance indicators are connected to entrepreneurial objectives and business objects. Such indicators measure the degree to which objectives in the four areas of quality, costs, delivery, and flexibility are met. The best-known indicators are inventory turn­over, utilization, fill rate, and delivery reliability rate. All of these indica­tors can refer to various business objects or combinations of these objects.

Course 1: Sections and their intended learning outcomes

  • Course 1 – Logistics, Operations, and Supply Chain Management

    Intended learning outcomes: Describe basic definitions, issues, and challenges. Identify business partners and business objects. Explain strategies in the entrepreneurial context. Disclose how performance is measured.

  • 1.1 Basic Definitions, Issues, and Challenges

    Intended learning outcomes: Produce an overview on terms of the working environment and of business life. Explain service orientation in the classical industry, product orientation in the service industry, and the industrial product-service system. Disclose the product life cycle, the synchronization of supply and demand, and the role of inventories. Produce an overview on supply chain management, the role of planning and control as well as the SCOR model.

  • 1.2 Business Objects

    Intended learning outcomes: Present business-partner, and order-related business objects in detail. Explain product-related, process-related, and resource-related business objects. Produce an overview on rough-cut business objects.

  • 1.3 Logistics, Operations and Supply Chain Management Strategies in the Entrepreneurial Context

    Intended learning outcomes: Differentiate between various entrepreneurial objectives in a company and in a supply chain. Explain resolving conflicting entrepreneurial objectives. Describe the customer order penetration point (OPP) and the coordination with product and process design. Produce an overview on the target area flexibility: investments in enabling organizations, processes, basic technologies, and technologies toward personalized production.

  • 1.4 Performance Indicators and Performance Measurement

    Intended learning outcomes: Present the basics of the measurement, meaning, and practical applicability of logistics performance indicators. Describe performance indicators in the target areas of quality, costs, delivery, and flexibility. Produce an overview on performance indicators of the primary entrepreneurial objective.

  • 1.5 Summary


  • 1.6 Keywords


  • 1.7 Scenarios and Exercises

    Intended learning outcomes: Describe improvements in meeting entrepreneurial objectives. Differentiate between entrepreneurial objectives and the ROI. Assessing the Economic Value Added (EVA) of Supply Chain Initiatives. Derive rough-cut business objects from detailed business objects.