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

Integral Logistics Management — Structure of the Course

Intended learning outcomes: Disclose the structure as well as an overview of the parts of the course.

The course comprises 4 parts:

  • Part A (chapters 1 through 3):  Fundamentals, Strategies, and Design Options in Integral Logistics Management
  • Part B (chapters 4 through 9):   Strategic and Tactical Concepts of Planning & Control in Integral Logistics Management
  • Part C (chapters 10 through 17):  Methods of Planning & Control in Complex Logistics Systems
  • Part D (chapters 18 through 20):    Overview of Further Management Systems in the Enterprise

Parts A examines integral logistics management as embedded in the entrepreneurial activities as well as the strategic design of supply chains.

  • Chapter 1 deals with integral logistics management as embedded in the entre­preneurial activities of developing, manufacturing, using, and disposing of goods. The focus is on the business objects, target areas, basic principles, analyses, concepts, systemic and systematic methods, as well as technologies for the management of logistics systems both within and across companies.
  • Chapter 2 on supply chain design first considers basic principles for “make or buy.” It discusses models, opportunities and threats for different kinds of partnership between legally independent firms along the supply chain, followed by the management of supply chain risks.
  • Chapter 3, also on supply chain design, discusses location planning with its integrated determination of production, distribution, service, and transport networks as well as the sustainability in supply chain management.

Part B introduces the fundamental concepts and tasks of planning & control in logistics, operations, and supply chain management, as well as the corresponding software.

  • Chapter 4 starts with methods for business process analysis that are important for the systematic procedure for the design of systems for planning & control in supply chains. It develops a characteristic in planning & control with features that are tailored to the key performance indicators for measuring the degree of achievement of the company objectives in Chapter 1. This characteristic can be different for each product family. Finally, the chapter introduces four concepts for planning & control in supply chains dependent on this characteristic.
  • Chapters 5 through 8 introduce the essential business objects and business processes for these four concepts:
    • Chapter 5: the MRP II / ERP concept
    • Chapter 6: the Lean / Just-in-Time concept and repetitive manufacturing
    • Chapter 7: the concept for product families and one-of-a-kind production
    • Chapter 8: the concept for the process industry.
  • Chapters 5 through 8 present an overview of the business methods and their relation to the characteristic in planning & control. The respective chapters develop detailed business methods in two simple but important cases: master planning in the MRP II / ERP concept and repetitive manufacturing in the Lean / Just-in-Time concept.
  • Finally, chapter 9 discusses ERP and SCM software for these four concepts as well as success factors for the implementation of this kind of software.

Part C offers a detailed discussion of planning & control methods in complex logistics systems. The reference model in Figure 2 (introduced in Section 5.1.4) summarizes the presents an overview of the planning processes according to — vertically — temporal range (long, medi­um, and short term) and — horizontally — all the planning & control tasks. The processes and tasks are shown in the logical temporal sequence.

Fig. 2                  Reference model of business processes and tasks in planning & control.

  • Chapters 10 through 17 examine the individual tasks in succession (ex­ceptions: The dis­cus­sion of bid processing and customer order con­figu­ra­tion starts in Section 5.2.1 and continues in Section 12.1; Chapter 16 dis­cusses cost estimation together with job-order costing). The introduc­tion to each section will refer back to the above reference model and show the task together with the temporal ranges of planning for which the task is particularly pertinent.
    • Chapter 10: Demand Planning and Demand Forecasting
    • Chapter 11: Inventory management and stochastic materials management
    • Chapter 12: Deterministic Materials Management
    • Chapter 13: Time management and scheduling
    • Chapter 14: Capacity management
    • Chapter 15: Order release and control
    • Chapter 16: Cost estimation, job-order costing, and activity-based costing
    • Chapter 17: Representation and system management of logistic objects
  • The methods in Chapters 10 through 17 provide a deeper under­standing of the concepts in Chapters 5 through 8. They comprise all that is required for designing the logistic systems that is not characte­rized by frequent order repetition. The detailed discussion of these methods provides the reader with an in-depth methodological foundation for understanding the Kanban and master planning techniques introduced in part B. Many of these techniques have their origins in the MRP II / ERP concepts. However, they also apply to the process industry as well as to product families with many variants, whereby they, of course, are applied to the business objects of those processes.

Part D provides an overview of some management systems that are closely inter­connected with Integral logistics management. Among these are strategic management, technology and product innovation management, the financial and cost accounting system, information, knowledge and know-how management, and system and project management. Part D shows, also and most especially, why and where the linkages exist. In any case, the information provided here is meant to serve as a summary.

  • Chapter 18: There is a special inter­connection between Integral logistics management and Total quality management or Six Sigma. Both management systems focus on fulfillment of concrete customer needs and thus belong to the area of operative implementation in the enterprise. The Japanese approaches give priority to a combination of concepts from both systems. The Toyota Production System for example, combines the lean / just-in-time concept with the jidoka concept, which is a concept for quality management.
  • Chapter 19: Systems engineering and project management are also very strongly connected with Integral logistics management. First, the associated tasks in their entirety can be understood as management systems. The design, development, and continual improvement of these systems must be approached using the methods of systems engineering and project management. Second, some tasks are unique (one-of-a-kind); for example, in facility location planning, in the project business, or in customer-specific services (production and procurement without order repetition). Third, some techniques are used in both management systems. These are, among others, scheduling techniques, such as the Critical Path Method (CPM) and the Gantt chart, and methods of financial evaluation of investments, such as the payback or Net Present Value methods.
  • Chapter 20: In connection with ERP and SCM software systems (see Chapter 9), the connection of information management with Integral logistics management is clear. Information management can provide techniques and methods for realistic modeling of business processes and correct representation of logistic business objects. This makes possible suitable data management, which ensures that the necessary data on objects is available at all times in a detailed and up-to-date form.