Logistics Education

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(No Transcript)
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Logistics Education Material Project
The following slides contain charts, statistics
and other graphics that support and illustrate
the CLM Toolbox instructional materials.  Suggesti
ons on their use can be found in the Instructors
Toolkit on page 8.
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Logistics Benefits Society

• Access to a greater variety of goods
• Access to goods and services at a lower price
• The needs of its people in their daily lives and
  in emergencies

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US-Mexico Comparison on Logistics Expenditures
Economy Higher Output--GDP Better use of
resources Multi-use Infrastructure Businesses Mark
et Access Market Integration Cost
Efficiency Consumers More Goods and
Services Wider Availability Lower Prices/Income
U.S. 10 GDP
MEXICO 14.5 GDP
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Logistics Costs as a Percentage of GDPSelected
Countries
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Uzbekistan Basics

• Population 24,416,000
• Literacy 99
• Life expectancy 64 years
• GDP per capita 490

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China Basics

• Population 1,254,062,000
• Literacy 82
• Life expectancy 70 years
• GDP per capita 740

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Images of Hurricane Mitch
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Logistics is Pervasive

• Businesses--reach customers and tie them more
  closely to their products and services.
• Not-for-profit organizations-- reach their
  clients and donors
• Service businesses customer access to their
  market offerings

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Logistics in all Kinds of Organizations
LOGISTICS PROBLEM 10,000,000 POUNDS OF POTATOES
NOT-FOR -PROFIT SECOND HARVEST
DONATED GOODS UNIVERSAL NEEDS
CLIENT LIST MADONNA NINE INCH NAILS MTV GENERAL
ELECTRIC
SERVICES ROCK IT CARGO
COMPLEX ITENERARIES HIGH COST OF ERRORS
12 NATIONS CHANGE CURRENCY
GOVERNMENT THE EURO
50 BILLION COINS IN 50 BILLION COINS OUT
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Logistics Contributes to a Firms Revenues and
Growth

• Serve customers, contribute to customer
  satisfaction
• Lower costs and increase profitability, serving
  customers better

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Zaras Logistics System
400 Local Cooperatives
1 Factory/Distribution Center
449 Stores
10-14 days for new products
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Zara on the Web
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Logistics Cost Savings at Best in Class
Performance
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Logistics Plays a Key Role in Marketing Strategy

• The centerpiece of a marketing strategy
• Supports marketing strategies based on other
  aspects of marketing
• A difficult-to-duplicate competitive advantage

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Wal-Marts US Logistics System in the US
Direct Store Delivery
Sams Clubs
Wal-Mart Distribution Center
Super
Direct Store Delivery
10,000 Suppliers
100 Distribution Centers
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Map of Wal-Mart Store Locations in the US
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New Economy vs. Old Economy Characteristics
Shifting Economic Characteristics
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Logistics Activities Affect One Another, Other
Aspects of Marketing

• Logistics activities affect one another, helping
  to determine both cost and service levels
• Logistics activities affect product design and
  development decisions
• Logistics performance affects how consumers react
  to a retailer

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FedEx Air Express Operations Hub and Spoke
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Interactions Logistics Activities and Marketing
BIG SALE ON OREOS
Inventory
Promotions
Transportation
Handling
LOGISTICS
Price
Place
Marketing
SMALLER CARS
Product
Warehousing
Information
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Advantages and Disadvantages of Five Modes of
Transportation US Domestic Operations
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Logistics Fulfills the Promises Made by other
Aspects of Marketing

• The promises made in advertisements and other
  promotions
• The promises made about product performance
• Price points and pricing objectives

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Frozen Pizza at Krogers Customer Served
KEEPING PROMISES WITH LOGISTICS
THE PROMISE FROZEN PIZZA 3/5 at KROGERS
Friday-Sunday
Customer Expects Frozen Pizza 3/5 at KROGERS
Friday-Sunday
Logistics Delivers Enough Frozen Pizza To KROGERS
Customers Served By Logistics Potentially
Satisfied by Frozen Pizza
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Frozen Pizza at Krogers Customer Not Served
KEEPING PROMISES WITH LOGISTICS
THE PROMISE FROZEN PIZZA 3/5 at KROGERS
Friday-Sunday
Customer Expects Frozen Pizza 3/5 at KROGERS
Friday-Sunday
KROGER is OUT of pizza
Customers Buys Another Brand Goes To Another
Store Buys Nothing
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Dells Logistics System
CUSTOMER ORDER STARTS ASSEMBLY
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Dell Pluses and Minuses

• PLUSES CONSUMERS
• 24-Hour Availability
• Shop on Line
• Unlimited selection
• Expert contact person
• PLUSES COMPANY
• Low finished inventory costs
• Direct feedback from customers
• Greater flexibility in product

• MINUSES CONSUMERS
• Cant see or touch the product prior to purchase
• Cant ask questions face-to-face
• MINUSES COMPANY
• More complex operations
• Total responsibility for marketing
• Fewer economies of scale

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Logistics Costs as a Percentage of Revenue for
Selected Industries-Europe and Asia
Logistics Costs as a Percentage of Revenues
Selected Industries in Europe and Asia
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Salary Progression in a Logistics Career
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Student and Young Manager Comments on Logistics
If you do not understand logistics, you simply
cannot develop international markets. Logistics
is the heart of globalization.--Mathieu Soto,
Citigroup Intern, Paris, France
Not everyone will become a logistician, but
every business graduate needs to understand
logistics.--Andrew Ouart, Citigroup Intern, New
York, NY
Logistics has turned out to be the most
challenging, most frustrating, most interesting
field I could imagine.--Kathryn Bowling,
As a field sales representative for a major wine
company, I have to understand what our logistics
system will do. If I dont, I may promise
clients something we cannot deliver. Thats not
the way to maintain good customer
relations.--James Dimick, Gallo Fine Wines
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Produced October 2003