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Listed as one of the top ten supply chain books of all time on! A concise, applied and strategic introduction to the subject of logistics and supply chain management, perfect for modern managers and students of logistics and supply chain management. Logistics and supply chain management continue to transform the competitive landscape and have become one of today's key business issues. This fifth edition of Logistics Management and Strategy continues to take a practical, integrated and international approach to logistics, and includes the very latest research to reflect the innovative and exciting developments in this subject area. A clear framework guides the reader through the four parts of the book, covering; * an introduction to logistics and its contribution to competitiveness and value creation, * leveraging logistics operations within the context of the customer * supplier partnerships, interfaces and the challenges of integration * leading-edge thinking in logistics and the future challenges ahead This new edition contains; * 15+ new cases (including Heineken, Unilever and Johnson and Johnson) - coverage of disaster logistics and Corporate Social Responsibility from the supply chain perspective - discussion of global governance of the supply chain - even more coverage on value and logistics costs and segmented supply chain strategy, equipping the reader with the latest thinking 'Well written and contains a wealth of valuable ideas and concepts.' - Dr Jan de Vries, University of Groningen 'Very up-to-date, both in terms of its conceptual framework and the topics covered. Remarkably clear and easy to read.' - Dr Tony Whiteing, University of Huddersfield Alan Harrison was Professor of Operations and Logistics at Cranfield School of Management, and Director of Research at The Cranfield Centre for Logistics and Supply Chain Management. Remko van Hoek is visiting Professor of Supply Chain Management at The Cranfield Centre for Logistics and Supply Chain Management. He is also Chief Procurement Officer at GDF SUEZ/Cofely the Netherlands. Heather Skipworth is Senior Research Fellow at Cranfield School of Management, The Cranfield Centre for Logistics and Supply Chain Management.
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Table of Contents

ContentsForeword xiiiPreface xvAuthors' acknowledgements xviiPublisher's acknowledgements xixHow to use this book xxiPlan of the book xxiiiPart One COMPETING THROUGH LOGISTICS1 Logistics and the supply chain 3Introduction 31.1 Logistics and the supply chain 4 1.1.1 Definitions and concepts 6 1.1.2 Supply chain: structure and tiering 81.2 Material flow and information flow 12 1.2.1 Material flow 12 1.2.2 Information flow 151.3 Competing through logistics 16 1.3.1 Hard objectives 17 1.3.2 Supportive capabilities 19 1.3.3 Soft objectives 25 1.3.4 Order winners and qualifiers 261.4 Logistics strategy 27 1.4.1 Defining 'strategy' 28 1.4.2 Aligning strategies 29 1.4.3 Differentiating strategies 30 1.4.4 Trade-offs in logistics 31Summary 32Discussion questions 33References 33Suggested further reading 342 Putting the end-customer first 35Introduction 352.1 The marketing perspective 36 2.1.1 Rising customer expectations 37 2.1.2 The information revolution 372.2 Segmentation 382.3 Demand profiling 462.4 Quality of service 50 2.4.1 Customer loyalty 51 2.4.2 Value disciplines 53 2.4.3 Relationship marketing and customer relationship management (CRM) 53 2.4.4 Measuring service quality 562.5 Setting priorities for logistics strategy 56 2.5.1 Step 1: Diagnose current approach to market segmentation 58 2.5.2 Step 2a: Understand buying behaviour 59 2.5.3 Step 2b: Customer value analysis 60 2.5.4 Step 3: Measure logistics strategy drivers 60 2.5.5 Step 4: Specify future approach to market segmentation 63Summary 68Discussion questions 69References 70Suggested further reading 713 Value and logistics costs 73Introduction 733.1 Where does value come from? 74 3.1.1 Return on investment (ROI) 75 3.1.2 Financial ratios and ROI drivers 773.2 How can logistics costs be represented? 79 3.2.1 Fixed/variable 81 3.2.2 Direct/indirect 85 3.2.3 Engineered/discretionary 873.3 Activity-based costing (ABC) 89 3.3.1 ABC example 91 3.3.2 Cost-time profile (CTP) 92 3.3.3 Cost-to-serve (CTS) 943.4 A balanced measurement portfolio 95 3.4.1 Balanced measures 96 3.4.2 Supply chain management and the balanced scorecard 97 3.4.3 Supply chain financial model 993.5 Supply chain operations reference model (SCOR) 101Summary 105Discussion questions 105References 106Suggested further reading 106Part Two LEVERAGING LOGISTICS OPERATIONS4 Managing logistics internationally 109Introduction 1094.1 Drivers and logistics implications of internationalisation 111 4.1.1 Logistical implications of internationalisation 114 4.1.2 Time-to-market 115 4.1.3 Global consolidation 116 4.1.4 Risk in international logistics 1194.2 The tendency towards internationalisation 120 4.2.1 Focused factories: from geographical to product segmentation 120 4.2.2 Centralised inventories 1214.3 The challenges of international logistics and location 124 4.3.1 Extended lead time of supply 125 4.3.2 Extended and unreliable transit times 125 4.3.3 Multiple consolidation and break points 125 4.3.4 Multiple freight modes and cost options 126 4.3.5 Price and currency fluctuations 126 4.3.6 Location analysis 1284.4 Organising for international logistics 130 4.4.1 Layering and tiering 130 4.4.2 The evolving role of individual plants 131 4.4.3 Reconfiguration processes 1324.5 Reverse logistics 1414.6 Managing for risk readiness 143 4.6.1 Immediate risk readiness 143 4.6.2 Structural risk readiness 1444.7 Corporate social responsibility in the supply chain 145Summary 150Discussion questions 150References 151Suggested further reading 1515 Managing the lead-time frontier 153Introduction 1535.1 The role of time in competitive advantage 154 5.1.1 Time-based competition: definition and concepts 154 5.1.2 Variety and complexity 155 5.1.3 Time-based initiatives 156 5.1.4 Time-based opportunities to add value 157 5.1.5 Time-based opportunities to reduce cost 159 5.1.6 Limitations to time-based approaches 1615.2 P:D ratios and differences 162 5.2.1 Using time as a performance measure 162 5.2.2 Using time to measure supply pipeline performance 163 5.2.3 Consequences when P-time is greater than D-time 1655.3 Time-based process mapping 168 5.3.1 Stage 1: Create a task force 169 5.3.2 Stage 2: Select the process to map 169 5.3.3 Stage 3: Collect data 170 5.3.4 Stage 4: Flow chart the process 170 5.3.5 Stage 5: Distinguish between value-adding and non-value-adding time 170 5.3.6 Stage 6: Construct the time-based process map 171 5.3.7 Stage 7: Solution generation 1715.4 Managing timeliness in the logistics pipeline 176 5.4.1 Strategies to cope when P-time is greater than D-time 177 5.4.2 Practices to cope when P-time is greater than D-time 1785.5 A method for implementing time-based practices 179 5.5.1 Step 1: Understand your need to change 179 5.5.2 Step 2: Understand your processes 180 5.5.3 Step 3: Identify unnecessary process steps and large amounts of wasted time 181 5.5.4 Step 4: Understand the causes of waste 181 5.5.5 Step 5: Change the process 181 5.5.6 Step 6: Review changes 181 5.5.7 Results 1825.6 When, where and how? 183Summary 183Discussion questions 184References 184Suggested further reading 1846 Supply chain planning and control 185Introduction 1856.1 The supply chain 'game plan' 187 6.1.1 Planning and control within manufacturing 187 6.1.2 Managing inventory in the supply chain 193 6.1.3 Planning and control in retailing 198 6.1.4 Inter-firm planning and control 2016.2 Overcoming poor coordination in retail supply chains 203 6.2.1 Efficient consumer response (ECR) 204 6.2.2 Collaborative planning, forecasting and replenishment (CPFR) 210 6.2.3 Vendor-managed inventory (VMI) 214 6.2.4 Quick response (QR) 217Summary 218Discussion questions 219References 219Suggested further reading 2207 Just-in-time and the agile supply chain 221Introduction 2217.1 Just-in-time and lean thinking 223 7.1.1 The just-in-time system 224 7.1.2 The seven wastes 228 7.1.3 JIT and material requirements planning 229 7.1.4 Lean thinking 232 7.1.5 Application of lean thinking to business processes 234 7.1.6 Role of lean practices 2357.2 The concept of agility 236 7.2.1 Classifying operating environments 241 7.2.2 Preconditions for successful agile practice 242 7.2.3 Developing measures that put the end-customer first to improve market sensitivity 246 7.2.4 Shared goals to improve virtual integration 247 7.2.5 -Boundary spanning S&OP process to improve process integration 248Summary 249Discussion questions 250References 251Suggested further reading 252Part Three WORKING TOGETHER8 Integrating the supply chain 255Introduction 2558.1 Integration in the supply chain 257 8.1.1 Internal integration: function to function 258 8.1.2 Inter-company integration: a manual approach 259 8.1.3 Electronic integration 2608.2 Choosing the right supply relationships 2648.3 Partnerships in the supply chain 270 8.3.1 Economic justification for partnerships 271 8.3.2 Advantages of partnerships 271 8.3.3 Disadvantages of partnerships 2718.4 Supply base rationalisation 272 8.4.1 Supplier management 272 8.4.2 Lead suppliers 2728.5 Supplier networks 273 8.5.1 Supplier associations 273 8.5.2 Japanese keiretsu 276 8.5.3 Italian districts 278 8.5.4 Chinese industrial areas 2808.6 Supplier development 284 8.6.1 Integrated processes 284 8.6.2 Synchronous production 2858.7 Implementing strategic partnerships 2858.8 Managing supply chain relationships 290 8.8.1 Creating closer relationships 290 8.8.2 Factors in forming supply chain relationships 291Summary 292Discussion questions 294References 295Suggested further reading 2979 Sourcing and supply management 299Introduction 2999.1 What does procurement do? 301 9.1.1 Drivers of procurement value 3029.2 Rationalising the supply base 3149.3 Segmenting the supply base 316 9.3.1 Preferred suppliers 319 9.3.2 Strategic relationships 320 9.3.3 Establishing policies per supplier segment 320 9.3.4 Vendor rating 321 9.3.5 Executive ownership of supply relationships 322 9.3.6 Migrating towards customer of choice status 3249.4 Procurement technology 3269.5 Markers of boardroom value 3269.6 What does top procurement talent look like? 327Summary 328Discussion questions 329References 329Suggested further reading 330Part Four CHANGING THE FUTURE10 Logistics future challenges and opportunities 333Introduction 33310.1 Changing economics? 33410.2 Internal alignment 33610.3 Selecting collaborative opportunities upstream and downstream 34010.4 Managing with cost-to-serve to support growth and profitability 34310.5 The supply chain manager of the future 34510.6 Changing chains 347Summary 349Discussion questions 350References 350Suggested further reading 350Index 351

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