1、Contemporary LogisticsTwelfth EditionChapter 4Organizational and Managerial Issues in LogisticsLearning Objectives(1 of 2)4.1 To explain organizational structure for logistics4.2 To compare traditional and contemporary organizational design for logistics4.3 To identify productivity issues and improv
2、ement efforts in logistics 4.4 To discuss quality issues in logistics Learning Objectives(2 of 2)4.5 To describe ways to manage theft and pilferage4.6 To review the concept of logistics social responsibility4.7 To articulate issues associated with reverse logistics4.8 To report on programs designed
3、to lessen the impact of terrorism on logistics systemsOrganizing Logistics Within the Firm(1 of 8)Two key organizational logistics topics Organizational structure Organizational designOrganizing Logistics Within the Firm(2 of 8)Organizational structure for logistics Two basic structures include:o Fr
4、agmented logistics structure Logistics activities are managed in multiple departments throughout an organizationo Unified logistics structure Multiple logistics activities are combined into and managed as a single departmentOrganizing Logistics Within the Firm(3 of 8)Organizational structure for log
5、istics Two basic structures for logistics departments include:o Centralized logistics organization Company maintains a single logistics department that administers the related activities for the entire company from the home officeo Decentralized logistics organization Logistics-related decisions are
6、 made separately at the divisional or product group level and often in different geographic regionsOrganizing Logistics Within the Firm(4 of 8)Organizational structure for logistics Job title or corporate rank o Leading-edge organizations tend to head the logistics department by senior-level personn
7、elo Generally excluded from holding a“C-level”positionOrganizing Logistics Within the Firm(5 of 8)Organizational design for logistics Three primary types of organizational design include:o Hierarchical(functional)Top-down flowo Matrix Cross-functional responsibilitieso Network Process philosophy foc
8、used on combining tasks into value-creating products and activitiesOrganizing Logistics Within the Firm(6 of 8)Organizational design for logistics Network organizational design is manifested in terms of:o Relevancy Refers to satisfying current and emerging customer needs Facilitated by developing mu
9、tually beneficial relationships with key customers At a minimum,these relationships should provide an understanding of customer needs and wantsOrganizing Logistics Within the Firm(7 of 8)Organizational design for logistics Network organizational design is manifested in terms of:o Responsiveness Refl
10、ects the degree to which an organization can accommodate unique or unplanned customer requests Achieved when the appropriate decision makers are provided with both relevant information and the authority to address unique or unplanned requestsOrganizing Logistics Within the Firm(8 of 8)Organizational
11、 design for logistics Network organizational design is manifested in terms of:o Flexibility Is an organizations ability to address unexpected operational situations Predicated on avoiding early commitment to an irreversible course of actionManagerial Issues in Logistics(1 of 28)Productivity Quality
12、Risk Sustainability ComplexityManagerial Issues in Logistics(2 of 28)Productivity Can be defined as the amount of output divided by the amount of input Provides insight into the efficiency with which corporate resources are being utilizedManagerial Issues in Logistics(3 of 28)Productivity Three ways
13、 to improve productivity include:o Reduce the amount of input while holding output constanto Increase the amount of output while holding input constanto Increase output while decreasing inputManagerial Issues in Logistics(4 of 28)Productivity Labor productivityo Warehousing and transportation are he
14、avily dependent on human laboro Human labor is an input(i.e.,workers receive wages or salaries)o Productivity improvement efforts in logistics are often directed toward increasing the amount of output while holding input constant(workers resistant to suggestions regarding reduced wages or salaries)M
15、anagerial Issues in Logistics(5 of 28)Productivity Asset productivityo Concerns include:Space utilization Excess capacity(unused available space)v Can be unproductive as it may result in the purchase of additional equipment or facilities,which adds costs(input)v May not yield additional output resul
16、ting in a productivity declineManagerial Issues in Logistics(6 of 28)Productivity Asset productivityo Concerns include:Improving the output from existing assets Increases productivity as inputs remain constant,but output is increasedManagerial Issues in Logistics(7 of 28)Quality Logistics service qu
17、alityo Relates to a firms ability to deliver products,material,and services without defects or errors to both internal and external customers11E.A.Morash,C.Droge,and S.Vickery,“Strategic Logistics Capabilities for Competitive Advantage and Firm Success,”Journal of Business Logistics 17,no.1(1996):12
18、2.Managerial Issues in Logistics(8 of 28)Quality Quality in logistics involves trade-offso If inferior logistic service quality,customers may perceive lower value o If superior logistic service quality than expected or required,organization may be adding unnecessary cost Organizations must try to ma
19、tch the quality levels of the logistic services they provide with the expectations of their customers and the landscape in which they operateManagerial Issues in Logistics(9 of 28)Quality Vendors are expected to have quality programs Vendors can demonstrate commitment to quality to potential buyers
20、through achieving and maintaining quality program certificationo ISO(International Standards Organization)9000 certification is an example of a quality program certificationManagerial Issues in Logistics(10 of 28)Quality ISO 9000o Is a set of generic standards used to document,implement,and demonstr
21、ate quality management and assurance systemso Is applicable to both manufacturing and service firmso Standards are intended to help companies build quality into every core process in each departmentManagerial Issues in Logistics(11 of 28)QualityISO 9000o Firms demonstrating commitment to quality thr
22、ough training,reviews,and continuous improvement achieve initial ISO 9000 certificationo Once certification is obtained,audits are conducted annually and organizations can be recertified every three yearso Certification is credited with an increase in customer service improved order accuracy enablin
23、g enhanced costs analysisManagerial Issues in Logistics(12 of 28)Quality Six Sigma o Is a quality-focused methodology that emphasizes the virtual elimination of business errorso Area covered under a normal curve is by six standard deviations is 99.99966 percento Approach suggests that there will be
24、3.4 defects,deficiencies,or errors per one million opportunitieso Can be applied to various logistics activities such as order packingManagerial Issues in Logistics(13 of 28)Quality Six Sigma o Benefits Reduced costs Reduced errors and waste Reduced cycle timeo Drawbacks Overcoming business cultural
25、 barriers Investing required resources(both human and money)Gaining top management commitmentManagerial Issues in Logistics(14 of 28)Quality Lean Six Sigma o Is a quality-focused methodology that integrates Six Sigma with the Lean approacho Integrates the goals and methods of these two approaches in
26、 pursuit of qualityo Unique because it recognizes that organizations cannot focus only on quality or speedo Emphasizes an organizational focus on improving quality as it relates to responsivenessManagerial Issues in Logistics(15 of 28)Quality Malcolm Baldrige National Quality Awardo Recognizes organ
27、izations for their achievements in quality and performanceo Established in the late 1980so Restricted to firms headquartered in the United Stateso Eligibility initially limited to:Manufactures,services,and small businesseso Eligibility expanded to include:Health care and educational institutionsMana
28、gerial Issues in Logistics(16 of 28)Risk Can be viewed as susceptibility to disruptions that could lead to a loss for a firm Can take a variety of forms as it relates to logistics management activitieso Regularly occurring(or operational)risks(e.g.,variability in demand or potential for a damaged sh
29、ipment)o Catastrophic risks(e.g.,earthquakes or terrorist attacks)Managerial Issues in Logistics(17 of 28)Risk Logistics uncertainty pyramid modelo Established to identify sources of uncertainty that can affect the risk exposure for logistics activitieso Identifies several types of uncertainty inclu
30、ding shipper,customer,carrier,control systems,and externalManagerial Issues in Logistics(18 of 28)Risk Terrorism is an example of catastrophic risk Terrorism can be defined as“an illegal use of or threat of force or violence made by a group or individual against a person,a company,or someones proper
31、ty with a goal of menacing the target,often grounded in politics or ideology.”22Terrorism,The American Heritage Dictionary of the English Language,4th ed.(n.d.).Retrieved from D website:http:/ Issues in Logistics(19 of 28)Risk Creation of the Department of Homeland Security(DHS)o Federal agencyo Goa
32、ls To prevent terrorist attacks in the U.S.To reduce the vulnerability of the U.S.to terrorismManagerial Issues in Logistics(20 of 28)Risk The 22 separate government entities incorporated into DHS include:o Transportation Security Administration(TSA)Transportation Worker Identification Credential(TW
33、IC)o Customs and Border Protection(CBP)Container Security Initiative(CSI)Customs Trade Partnership Against Terrorism(C-TPAT)Importer Security Filing(ISF)rule,also known as“10+2”Table 4.1:Timeline for Presenting Electronic Advance Manifest InformationInbound to the United StatesModeTimelineAir and co
34、urierFour hours prior to arrival in the United States,or“wheels up”from certainnearby airportsRailTwo hours prior to arrival at a U.S.port of entryOcean vessel24 hours prior to lading at foreign portTruckFree and Secure Trade(FAST):30 minutes prior to arrival in the United States;non-FAST:one hour p
35、rior to arrival in the United StatesOutbound from the United StatesModeTimelineAir and courierTwo hours prior to scheduled departure from the United StatesRailTwo hours prior to the arrival of the train at the borderOcean vessel24 hours prior to departure from U.S.port where cargo is ladenTruckOne h
36、our prior to the arrival of the truck at the borderSource:Erlinda Byrd,“Rules for Improving Cargo Security,”Customs and Border Protection Today,March 2004.Managerial Issues in Logistics(21 of 28)Risk Theft is another logistics risk issue that confronts many managers Theft(stealing)can be defined as
37、the taking and removing of personal property with the intent to deprive the rightful owner of it.33www.m- Issues in Logistics(22 of 28)Risk Thoughts regarding thefto Insurance companies may reimburse for loss,but time and costs tend not to be coveredo Theft results in the planned flow of goods being
38、 interrupted,which can lead to stockoutso Theft can factor into facility location decisionsManagerial Issues in Logistics(23 of 28)Risk Thoughts regarding pilferage(employee theft)o Transportation and warehousing operations are particularly vulnerable to pilferageo Managing pilferage begins with the
39、 hiring processo Zero-tolerance pilferage policyo Keep goods moving through the systemo Recent increase in pirate attacksFigure 4.1:Shipping Container Locking Handle with a Uniquely Numbered Customs SealSource:Philip Cridland/Alamy Stock PhotoManagerial Issues in Logistics(24 of 28)Sustainability Lo
40、gistics social responsibilityo Corporate social responsibility issues that relate directly to logisticsManagerial Issues in Logistics(25 of 28)Sustainability Logistics social responsibilityo Potential dimensions include:Environment Ethics Diversity Safety Philanthropy Human rights OthersManagerial I
41、ssues in Logistics(26 of 28)Sustainability Reverse logisticso Is the process of managing return goodso Exceeds$100 billion in U.S.aloneo Can be four to five times more expensive than forward logisticso Process can take 12 times as many steps as forward logisticsManagerial Issues in Logistics(27 of 2
42、8)SustainabilityReverse logisticso Reverse logistics process focuses on:Why products are returned How to optimize reverse logistics Whether reverse logistics should be managed internally or outsourced to a third party44John Paul Quinn,“Are There Ever Any Happy Returns?”Logistics Management,June 2005
43、,6366.Managerial Issues in Logistics(28 of 28)ComplexityNetwork complexityo Is the growing number of nodes and the associated changes to the links in logistics systemsProcess complexityo Centers on the haphazard development of processes,additions and modifications to processes over time,and/or chang
44、ing process requirementsRange complexityo Centers on the implications associated with the increasing number of products that most companies continue to face in an effort to differentiate themselves with their customersKey Terms(1 of 3)“C-level”position Centralized logistics organization Container Se
45、curity Initiative(CSI)Customs Trade Partnership Against Terrorism(C-TPAT)Decentralized logistics organization Excess capacity Fragmented logistics structure Importer Security Filing(ISF)ruleKey Terms(2 of 3)ISO 9000 Lean Six Sigma Logistics service quality Logistics social responsibility Logistics uncertainty pyramid model Malcolm Baldrige National Quality Award Pilferage Productivity Reverse logistics Sharing economyKey Terms(3 of 3)Six Sigma Tachograph Theft Transportation worker identification credential(TWIC)Unified logistics structure
