COURSE CODE

COURSE TITLE
CREDIT HOURS

: GFML 3053
: INTERNATIONAL LOGISTICS
:3

PREREQUISITE : GFMA 2023 INTERNATIONAL BUSINESS

Topic 1
International Supply
Chain Management

In this meeting:
1.
2.
3.
4.
5.
6.

Historical Development of International Logistics

Definition of Logistics and Supply Chain Management
Definition of International Logistics
Definition of International Supply Chain Management
Elements of International Logistics
The Economic Importance of International Logistics

Historical Development of
International Logistics
Introduction
The term Logistics is based on the physical
movement of goods.
The modern interpretation of the term logistics
has its origins in the military.
Business logistics include all the activities related to
the physical movement of goods (upstream and
downstream) and related paperwork.

Upstream & Downstream

So, what is logistics then?

Logistics is that part of the supply chain
process that plans, implements, and controls
the efficient, effective forward and reverse
flow and storage of goods, services, and
related information between the point of
origin and the point of consumption in order
to meet customers requirements.
(The Council of Logistics Management Professionals, CLM)

Historical Development of
International Logistics
The Early, "Slow" Days
Very early international logisticians were
traders who bought and sold goods
internationally (Silk Road, for example).
As trade expanded, international logistics
grew.
More concerned on making sure that the
goods arrived in good condition and at the
lowest possible cost.

Historical Development of
International Logistics
The Move Toward Speed
The advent of containers in ocean
trades (mostly 1960s and 1970s)
lowered transit times substantially.
International air shipments became
an increasing percentage of all
shipments in the 1980s:
the number of destinations served
by airlines grew.
air shipments became
increasingly cost competitive
with surface alternatives.

Historical Development of
International Logistics
The Emphasis on Customer Satisfaction
In the 1980s, companies shifted their emphasis to inventory
reductions.
Logisticians became more focused on transit times in order to
minimize inventory costs, raising the expectations of customers.
Results in adoption of different inventory management
techniques:
Just-In-Time (JIT)
MRP (Material Requirement planning)
MRP II (Manufacturing Resources Planning)
DRP (Distribution Resources Planning)

Historical Development of International

Logistics
Just-In-Time (JIT)
Just-in-time manufacturing is a process that plans for parts to
arrive on the assembly line just before they are needed. The goal of
this technique is to reduce or eliminate the need for inventory.
It now includes the delivery of parts to the assembly plant just
before they are needed, and the delivery of finished goods just as
the retail store is running out.
JIT has become part of standard operations management practices
in most manufacturing facilities.
JIT involves a risk if the supply chain is disrupted as production may
have to shut down due to lack of materials.

Historical Development of
International Logistics
Computer-based System
Materials Requirement Planning (MRP)
A computer-based management tool that allows a
manufacturers to determine what to produce, at what
quantity, in function of what it sells to its customers.
Manufacturing Resources Planning (MRP II)
A computer-based management tool that uses MRP at its
core, and that includes other functions in the firm, such as
finance and marketing.
Distribution Resources Planning (DRP) is a tool that allows a
retail firm to determine what to order from its suppliers, in
which quantity, and when, in function of what it sells to retail
customers.

Historical Development of
International Logistics
The Emphasis on Customer Satisfaction

Penalize suppliers that do not deliver on time

Accurate shipment Right item & quantity
Packaged appropriately especially for intl voyage
Within the specified time frame
Paperwork in perfect order for customs clearance
Fulfill security requirement
Choose the right mode of transportation
Goods properly insured

Historical Development of International

Logistics
Strategic Advantage
International Logistics management has become a strategic
advantage for the firms that are capable of:
Containing the costs of shipping, in view of increased fuel
costs
Providing visibility in the supply chain, or the ability to
determine where a particular shipment is located, at any
time
Providing reliable, dependable deliveries
Ensuring the security of the goods while they are in transit
Engaging in sustainable practices

Definition of Logistics and Supply Chain

Management
Supply Chain Management
Planning and management of all activities involved in
sourcing and procurement, conversion, and all Logistics
Management activities.
Includes coordination and collaboration with channel
partners, which can be suppliers, intermediaries, thirdparty service providers and customers.
SCM integrates supply and
demand management within and
across companies.

Definition of Logistics and

Supply Chain Management

Three views on the relationship between logistics and SCM

Three different perspectives on the relationship between

Logistics and Supply Chain Management. The inclusionist
perception is the prevailing one today.

Definition of International Logistics & SCM

International Logistics
The process of planning, implementing and controlling the
flow and storage of goods, services and related
information from a point of origin to a point of
consumption located in a different country.
International Supply Chain Management

SCM is inherently global - firms buying from foreign

suppliers or selling to foreign customers.
Domestic and international logistics activities are distinct
and managed differently.

Elements of International Logistics

International Logistics Characteristics:
Intl logistics environment & operations are quite different from
the domestic environment.
Decisions regarding international transportation are eminently
more complicated.
Number of intermediaries involved is greater .
Risks and hazards of international transportation are much more
significant.
International insurance is much more complex.
International means of payment are more involved.
Terms of trade are much more complicated.
The crossing of borders represents specific challenges.
Inventory is managed differently.

The Economic Importance of

International Logistics
The costs of International Logistics
represent about 15% of the total
volume of the international trade;
that is about US$ 2 trillion worldwide.
In addition, International logistics
generate approximately US$500
billion in additional government
revenues (Customs duty).
Source: http://www.lynnco-scs.com/LogisticsOurApproach.htm