Logistics Systems: Analysis, Design, and Integration

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CHAPTER 14

• Logistics Systems Analysis, Design, and
  Integration

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Learning Objectives

• To examine the problems and opportunities
  involved in systems analysis
• To relate the importance of industry standards to
  systems analysis
• To discuss the steps involved in redesigning a
  logistics system
• To examine a number of organizational
  alternatives

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Learning Objectives

• To describe a number of techniques for achieving
  logistics coordination and integration
• To distinguish between centralized and
  decentralized logistics organizations
• To distinguish between logistics within the firm
  and outsourcing logistics activities

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Logistics Systems Analysis, Design, and
Integration

• Key Terms
• Benchmarking
• Channels audit
• Competition audit
• Customer audit direct product profitability (DPP)
  analysis

• Key Terms
• Environmental sensitivity audit
• Existing facilities audit
• Integrated service providers

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Logistics Systems Analysis, Design, and
Integration

• Key Terms
• Linking-pin organization
• Matrix management
• Product audit
• Simulation
• System constraints

• Key Terms
• Systems analysis
• Third-party, or contract, logistics
• Unified department organization
• Vendor audit

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What is Systems Analysis?

• Systems analysis refers to the orderly and
  planned observation of one or more segments in
  the logistics network or supply chain to
  determine how well each segment functions.

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General Questions

• Why do we perform each task?
• What value is added by it?
• Why are the tasks performed in the order they
  are?
• Can we alter the sequence of the processing steps
  to increase efficiency?
• Why are the tasks performed by a particular group
  or individual?
• Could others perform this task?
• Is there a better way for the system to operate?

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Problems in Systems Analysis

• Multiple business functions are impacted.
• There are trade-offs among conflicting
  objectives.
• Logistics system impacts are difficult to
  precisely evaluate.
• There are business issues unique to each
  logistics system.
• Quantitative analysis is essential for
  intelligent decisions.

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Figure 14-1 A Scoring Checklist Used to
Determine Logistics Planning or Strategy Study
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Partial Systems Analysis

• Customer profitability analysis
• Warehousing productivity analysis
• Transportation cost analysis
• Consolidation analysis
• Direct product profitability analysis
• Benchmarking
• Industry standards analysis

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Logistics System Design

• Establishing objectives and constraints
• Quality programs
• World-class logistics programs
• System constraints
• Organization of the study team
• Data collection

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Logistics System Design (continued)

• Product audit
• Existing facilities audit
• Vendor audit
• Customer audit
• Channels audit
• Competition audit
• Environmental sensitivity audit

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Figure 14-7 Flexibility Makes It Easier to Work
Together
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Logistics System Design (continued)

• Analysis of the data
• Simulation
• Design implementation

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Figure 14-8 Schematic Drawing of Automated
Sorting System
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Systems Integration Logistics Within the Firm

• Dispersion of logistics activities
• Achieving coordination
• The status quo
• The linking-pin concept
• Linking-pin organization
• A unified department
• Unified department organization
• Centralized versus decentralized
• Matrix management

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Figure 14-9 Becton Dickinsons Worldwide
Sources
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Systems Integration Logistics Activities
Outside the Firm

• Third-party, or contract, logistics
• Integrated service providers
• Monitoring third-party performance