1. Possession Utility
2. Form Utility
3. Place Utility
4. Time Utility

Refers to how a product is in a form that:

a) can be used by the consumer

b) is of value to the consumer

Form Utility

Logistics can transform "inventory-sized products" (eg., 1000-pack cases of soda) into a more usable consumer-friendly form (eg., 12-packs of soda)

Indicates that a company's objectives can be realized by recognizing the mutual interdependence of the major functional areas of the firm.

** this means that each functional area should think of the consequences on the company's OTHER functional areas

1. Place Decisions
2. Price Decisions
3. Product Decisions
4. Promotion Decisions

What are Place Decisions?  Make sure to define this as its relationship to logistics.

Decisions that involve where the product will be sold & distributed.

These decisions involve 2 types of networks: logistics, and marketing

What are Price Decisions?  Make sure to define this as its relationship to logistics.

Involve how a product's transportation costs should be reflected in its selling price.

• Should they reflect Landed Costs?
• Should they be "free" shipping (no landed costs)

What are Product Decisions?  Make sure to define this as its relationship to logistics.

What are Promotion Decisions?  Make sure to define this as its relationship to logistics.

Time to market (speed), and agility.

Customer service is also a key and potential differentiator.

• Rising fuel prices
• Green logistics - "ecotaxes" on fuel mileage
• Labor shortages (for transportation)
• Reduced inventories
• Traffic congestion

• Exhibits poor service
• Has unproductive assets
• Has high Variable Operating Costs

A combination of processes, functions, activities, relationships, and pathways along which products, services, information, and financial transactions move in and between enterprises from the original producer to the ultimate end user.

1. Plan
2. Source
3. Make
4. Deliver
5. Return
6. Enable

1. Logistics functions
2. Operations functions
3. Procurement functions

Focuses on leveling out the planning requirements in order to smooth production output.

** this deals with eliminating "waste"

Supply Chain Collaboration

** "partnership-type" relationships are typically the best

1. Customization and diversity
2. Consumer connectivity
3. Differential growth & inflation
4. Margin pressure
5. Information economics
6. Regulatory & fiscal environment
7. Commodity volatility
8. Vulnerability of networks

1. Clearly stating the supply chain's Strategic Intent
2. Defining the Supply Chain Ecosystem 
3. Determining the right Execution Capabilities

1. High-definition demand responsiveness
2. Smart deployment
3. Planned resilience

1. Aging of developed countries
2. Oil prices increasing
3. Power shifts towards the East
4. Trading bloc formation
5. Globalized Green Laws
6. Pervasive technologies

Pervasive Technologies

• GPS, RFID, and other tracking technologies
• Computer models of the physical world

"Procurement"

"Sourcing"

1. Supporting organizational goals & objectives
2. Managing the purchasing process effectively & efficiently
3. Managing the supply base
4. Developing strong relationships with other functional groups
5. Supporting operational requirements

Explain: "Managing the purchasing process effectively and efficiently" 

Effectively: concerned with how well procurement keeps its promises

Efficiently: concerned with how well (or poorly) procurement uses company resources in keeping those promises

Explain: "Managing the supply base"

Refers to the selection, development, and maintenance of supply sources.

This is done by using strong communcation channels.

Explain: "Developing strong relationships with other functional groups"

Explain: "Supporting operational requirements"

States that procurement's focus is on satisfying internal customers.

** It can be summarized by buying the right products, at the right price, from the right source, at the right specifications, in the right quantity, for delivery at the right time, to the right internal customer.

Looking at both the internal and external environments where the supply decision is to be made.

Internal: 

- "Who are the relevant stakeholders?"
- "Where is the supply needed?"

- "What is the appropriate quantity/quality of supply?"

External: 

- Economic considerations

- Legal & regulatory frameworks controlling the purchase

- the marketplace within which potential suppliers operate 

1. Identify a need for supply
2. Situational analysis
3. Identify & evaluate possible suppliers
4. Select supplier(s)
5. Evaluate your decision

** THIS LAST STEP IS IMPORTANT

1. Can lead to increased competition
2. Can lead to greater supply risk mitigation
3. Can improve market intellegence

Planning is the FIRST step of Global Sourcing.

**It involves an honest assessment of Global Sourcing opportunities & challenges.

Refers to stock that exceeds the reasonable requirements of an organization, due to an overly-optimistic demand forecast.

**Can potentially be reused by other facilities in the organization

Refers to stock that is not likely to EVER be used by the organization that purchased it.

** can potentially be sold to other organizations.

Refers to materials that have been spoiled, broken, or otherwise rendered useless.

** Waste Materials have no economic value!

• Corporate strategy
• Financial measures/"bottom line" value
• Global supply
• M&A
• Customers
• Trade & operating model
• Regulatory forces
• Outsourcing/offshoring

• Commodity risk management
• Supplier behavior & violations are Procurement's responsibilities, not the supplier
• Social Media is a primary source of negative exposure

• Identifying "A-players" at all ranks
• Assembling talent both internally and externally.
• Talent should be looked at from a Global perspective.

They are both harmed.

• Consumers can be put at a health risk (eg., if they take counterfeit medicine)
• Companies will suffer through reputation-damage and subsequent profit loss.

1 million US jobs

Cost $48.2 billion in economic losses