logistics integration issues and problems.pptx

it describes the issues related to logisitics integration and supply chain

1. OPERATIONAL INTEGRATION CHAPTER 11

2. Internal Integration Internal integration  involves the coordination, collaboration and  integration  of  logistics  activities with other functional areas in an organisation ; whilst external  integration  requires the  integration  of  logistics  activities with those of their customer and suppliers in the supply chain (Stock et al, 1998).

3. Why Integration Creates Value Economic Value- builds on economy scale in operations as the source of efficiency . Its all about doing thing as well as possible. Market Value- All about presenting an attractive assortment of products at the right time and place to realize effectiveness. Relevancy -Involves customization of value adding services, over and above product positioning, that make a real difference to customers .

4. TO ACHIEVE LOGISTICAL INTEGRATION Responsiveness- A firms ability to satisfy customer requirements in a timely manner is referred to responsiveness. Variance reduction- Elimination of system disruptions Inventory Reduction -Inventory can and does facilitate desirable benefits . Shipment Consolidation- an effort to reduce transportation cost.

5. TO ACHIEVE LOGISTICAL INTEGRATION Quality – A fundamental operational objective is continuous quality improvement.Total Quality management (TQM) is a major initiative throughout most facets of industry. Life Cycle Support- It’s the final integration design objective.It requires Cradle to cradle logistics. Elimination of system disruptions.

6. Internal Integration Barriers Organization -organization structure of a business can serve to stifle- cross functional processes. Most business organizations seek to align authority and responsibility on the basis functional work. Measurement and Reward System- traditional measurement and reward systems serve to make cross functional coordination difficult. Most reward system are based on functional achievement.

7. Internal Integration Barriers Inventory Leverage –traditional measurement and reward systems serve to make cross- functional coordination difficult. Infocratic Structure- serves as an invisible force to retain traditional functional information flows.The impact of this is one of the driving reasons why Enterprise resource planning ( ERP)systems have great general management appeal.

8. Internal Integration Barriers Knowledge Hoarding- in most business situations knowledge is power, so unwillingness to share and general lack of understanding how to share knowledge are not common.

9. GREAT DIVIDE Clearly many obstacles make functional integration difficult. To some extent, the five barriers have contributed to a common situation in business referred to as the “ great divide “