CLTD 2024 Vol. 1 - Logistics History, Definition & Scope Flashcards
Officially called out and defined terms in the 2024 CLTD Vol. 1 Textbook (44 cards)
Bullwhip Effect
When information on consumer demand isn’t shared and only one’s immediate customer orders are known; any variance in supply encourages customers to order more next time. If these spikes in orders to increase safety stock are incorrectly interpreted as an an increase in demand, distribution orders and manufacturers also order too much, creating a ripple effect creating an overall increase in inventory when not needed.
What are the primary logistics functions?
Physical supply, materials management, distribution
These functions have been necessary for trade since its inception.
In what context was the term ‘logistics’ originally used?
Military context, it referred to the movement of troops and necessary materials.
Why is logistics important for businesses post-World War II?
It is emphasized as a primary core competency for market dominance.
What realization did organizations and academicians come to in the 1970s regarding logistics?
Warehousing, transportation, inventory, order management, materials handling, and packaging are interrelated.
What is the consequence of minimizing the cost of one logistics function exclusively?
It negatively impacts the costs of the others.
What did manufacturers use the role of outbound physical distribution manager to achieve?
Form systemwide plans for total cost minimization while improving service.
What trend did major retailers adopt to enhance their logistics operations?
Developed regional distribution centers (DCs).
What demographic change influenced logistics in recent years?
Increase in the number of women participating in the workforce.
What changes in family dynamics increased the need for convenience in shopping?
Extended store hours.
What technological advancement in the 1980s helped highlight the true cost of inventory and distribution systems?
The advent of computers
Computers enabled longer-term planning and highlighted inefficiencies in inventory and distribution.
What was a significant trend in distribution during the 1980s?
A movement toward centralized distribution and cost savings
This included the rapid growth of third-party distribution services.
What strategy became mainstream for organizations to compete with lower labor costs in other countries?
Outsourcing
Organizations sought lower-cost labor and materials as a survival strategy.
What impact did transportation deregulation have on logistics in the U.S. and Europe?
It reduced government control over transportation carriers’ rates, routes, and fares
This led to increased price competition and allowed purchasers more control over transportation costs.
What economic advantage did mergers create for larger logistics providers?
Economies of scale
Mergers allowed larger providers to leverage their size for cost efficiencies.
What term became commonly used in the late 1980s to describe the merger of inbound materials management with outbound physical distribution?
Logistics
This reflected a shift in the industry towards integrated supply chain management.
How did customer service expectations change during the late 1980s and early 1990s?
Customer service increased in importance as customers became accustomed to higher levels of service
This led to a shift in competitive factors where service level became a key focus.
What was the typical order-to-delivery cycle in the 1990s?
Between 15 and 30 days or more
This duration was despite advancements in electronic order processing.
What is the definition of the order-to-delivery cycle according to the ASCM Supply Chain Dictionary?
The period of time that starts when the customer places an order and ends when the customer receives the order
This cycle is crucial for understanding logistics efficiency.
What phenomenon occurs when there is a lack of shared information on consumer demand/future orders, accounting only for current orders?
The bullwhip effect
This effect causes fluctuations in inventory levels due to misinterpretation of demand.
What is the core effort of supply chain management?
To increase communication and collaboration among suppliers, manufacturers, third-party logistics providers, distributors, and customers
This aims to minimize uncertainty and the bullwhip effect.
What is recognized as essential for sustaining competitive advantage in today’s economy?
Looking both inward and outward to the contributions and innovations of business partners and third parties
This highlights the importance of collaboration in supply chains.
What became recognized as critical areas for business success in the 2000s?
Logistics and supply chain management
Organizations had to excel in them or partner with someone who could.
What was the new view of logistics and supply chain management in the 2000s?
Rather than viewing them as cost centers, these networks and processes shed light on the value attached to faster, better, and more consistent service through effiecient management.
