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International Logistics Management

What is logistics ? SCM , What is the significance and what it consists of ? Why do we need to treat the customers well? Does internationalisation imply a universal global approach of the supply chain? Examples of Supply Chains and how it looks in KONZUM d.d.

trade activity has an important role in social and economic life, as it enables the most successful association of producers and consumers. modern trade is an increasingly active role in the preservation of the value in use and its further adjusting final consumption, increases the production process and increases the value of the goods.

Specifically, about 60 percent of GDP in all countries of the world goes to personal consumption and private consumption largely realized through trade.

According to Council of logistics management: Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of conforming the customer requirement.

Demand forecasting Distribution communication Inventory Control Plant and Warehouse side selection Procurement Packaging Customers Service Time & Transportation

The magnitude of global business are: Increase in the magnitude global business. Business are relying on foreign countries to provide a source of raw materials and markets for finished goods. Fall of global trade barriers. Increase in Global competition .

- A supply chain is consists of :


Supplier Manufacturer Distributor Retailer Customer

Upstream

Downstream

- Aims to match supply and demand, - achieves (ideal logistics system) SUPPLY SIDE DEMAND SIDE

The right

Product

+ + + + +
The right The right The right The right

The right

Price

Store

Quantity

Customer

Time

Higher

Profits

Improve operations Increasing levels of outsourcing Increasing transportation costs Competitive pressures Increasing globalization Increasing importance of e-commerce Manage inventories

Customers Forecasting Design Processing Inventory Purchasing Suppliers Location Logistics

Strategic Tactical Operational

Theodore Levitt said people dont buy products, they buy benefits Why do we need to treat the customers well? They are our bread and butter. They are the reason for my job. They are the reason the company exists.

The whole purpose of supply chain management and logistics is to provide customers with the level and quality of service that they require and to do so at less cost to the total supply chain. The perfect order is achieved when the customers service requirements are met in full. One measure of the perfect order is on-time, in-full (OTIF).

The 80/20 rule: 80 per cent of the profits of the business come from 20 per cent of the customers. Furthermore, 80 per cent of the total costs to serve will be generated from 20 per cent of the customers (but probably not the same 20 per cent!).

Greet the customer with a smile. Dont use their first name unless asked to. You should sound energetic and confident. Compliment them for any special feature visible i.e a nice tie, watch, decorated office, nice voice etc. Be a good listener. Make customer feel important and appreciated. Make customer understand your product and system. Be ready to help. Apologize when things go wrong. Give more then expected. Thank the customer for their visit.

Do you know the inventory your distribution centers hold? Do you know the inventory your fellow retailer holds? Centralised(local) vs internationalisation Centralised inventories

All inventory is housed in the same way and handled by the same people and methods of transportation lower factory-to-warehouse distribution costs

Push vs Pull System


In Push systems, work release is based on downstream demand forecasts

Keeps inventory to meet actual demand Acts proactively


gratia)

e.g. Making generic job application resumes today (e.g.: exempli

In Pull systems, work release is based on actual demand or the actual status of the downstream customers

May cause long delivery lead times Acts reactively

e.g. Making a specific resume for a company after talking to the recruiter

Warehousing stocking locations of finished goods until they are sold Since holding of inventories can cost anywhere between 30 to 40 percent of their value, their efficient management is critical in supply chain operations.

JIT - A production approach widely followed in the automotive industry (views production as a system where all operations, including the delivery of materials needed for production, occur just at the time needed). This effectively eliminates the need for material stock. Reverse logistics deals with the flow of goods that go back up the supply chain for a number of reasons, including: product returns, repairs, maintenance and end-of-life returns for recycling or dismantling.

Transportation is one of the most visible elements of logistics operations. The role of transport in national economy is very crucial. Every business firm, regardless of what it produces or distributes, requires the movement of goods from one point to another and, therefore, is involved in transportation.

Air Truck Rail Ship Pipeline Electronic

The make or buy decision? Benefits vs costs In-house vs outsource decisions Sourcing is crucial. It affects efficiency and responsiveness in a supply chain

The The The The

environment in which international logisticians operate is quite different from the domestic environment. decisions regarding international transportation are much more complicated than domestic transportation. number of intermediaries involved is greater. inherent risks and hazards of international transportation are much more significant. insurance is much more complex.

International International Terms The

means of payment are more complicated.

of trade are more complicated.

crossing of borders represents specific challenges

KONZUM d.d. performs the wholesale and retail food and non-food products More than thousand stores in Croatia and Bosnia and Herzegovina

Network Delivery value is composed of companies, suppliers, distributors and customers who enter into partnerships with each other to improve the performance of the whole system. Power and advantage of Konzum is powerful distribution network that is, the dispersion of the product. This means - the task quickly blow up a large number of products by truck throughout the country.

His network of stores, Konzum has spread all over Bosnia and Croatia, and operates in approximately 1000 stores, which are divided in two formats namely Konzum shops (small shops), and Konzum hypermarkets (large centers).

Konzum currently distributes its goods in two ways: through a central distribution and through direct delivery from suppliers. Direct distribution is the delivery of goods by the vendor directly to individual stores Konzum. very intensively used

Slowely but surely increase usage of this distribution in last few years . CD - done in a way that suppliers of their goods are transported to the main center, which is done in storage and order picking of goods for the way ahead. Road of goods may continue or transport directly to Konzum hypermarkets, and from these commodities transported further towards to smaller formats of Konzum stores.

warehouse logistics team in Konzum : - Required number of warehouses (almost every major city has a large warehouse) - The storage location (located in industrial areas of cities) - Centralization of storage service (one large center for small shops) - Optimal inventory at some locations (all supplies needed to power in one city at the same place, and then distributed from there if needed) - Storage and order picking systems - The most economical inventory control - ABC Method

Supplies in large quantities like truck shipments are done with a larger centralized warehouse. Distribution center is a synonym for the stock which is collected, stored and prepared for retail sale in a particular area.

Many products pass quickly through the distribution center, and often without exposure to the shelves. With logistical standpoint, repackaging is justified, that is repackaged economically decentralized, because: - Lower transportation costs for goods in larger quantities - Lower transport costs of return of empty containers - Freer storerooms stable i.e. empty containers (boxes, crates) and occupy the same storage area that holds when it is commodities.

EDI system ( Electronic surveillance) - usage of computer to connect stores with the distribution warehouse, a warehouse with computers of a major suppliers modern storage technologies provide quality storage at minimal cost (better equipment increases the turnover of goods, and the lower the supply.)

This system was adjusted and controlled in the range of optimal cooperation between manufacturers and retail merchants In Konzum they intend to optimize range and optimize the racks (shelves) and using this method are performed: - Planning and control action sales - Direct product profitability - Analysis of consumer baskets

modern way to manage and control the costs based on the activities in the process flow of goods on sale. By ABC method and calculations, do not evaluate all activities of the company equally. based on the fast, accurate and complete response to customer requests.

Alen Deli

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