Value and logistics costs

In section 1.3 of Chapter 1 we reviewed the way in which different products may have different logistics strategies. While the range of classic shirts compete on price and brand, and demand is relatively stable over the year, fashion blouses compete on style and brand. For a fashion product, the logistics challenge is to be able to support highly uncertain demand in the marketplace. The logistics task for the two supply chains is essentially different, and some companies refer to a supply chain for every product to emphasise this difference. In Chapter 2, we stated the need for compromise here - between one size hts all on the one hand, and endless customisation on the other. 

This chapter probes the hnancial implications of different logistics strategies. While it may be clear that cost must form a central plank of supply chain strategy for classic shirts, that is not to say that the product team for fashion blouses can ignore the cost implications of their actions (see Table 1.1). The common theme is the concept of value, and the extent to which both management teams are creating value for the end-customer. Here, we advance the concept of value beyond the mainly end-customer view that we took in Chapter 2, and extend it to other stakeholders in the supply chain. 

While value is based on cost from the point of view of the company accountant, the concept of value may have different interpretations outside the company. In section 2.4.3, we stated that value from the end-customer s point of view is the perceived benefit gained from a product/service compared with the cost of purchase. From the shareholder s point of view, value is determined by the best alternative use of a given investment. In other words, value is greatest where the return on investment is highest. 

1 Where does vaiue come from different views of value, and how it can be measured using return on investment. 

2 How can iogistics costs be represented three different ways to divide up total 

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A systematic analysis is needed to optimize biomass value added ecologically and economically. First, the operational stages of a t5 ical supply chain are analyzed. Then, select factors that influence auf direct and indirect supply and logistics costs are mapped. 

The outsourcing of C and D customers, for example, allows producers to save sales, logistics, and administration costs. Furthermore, a focus on their core customers allows them to reduce their cost of complexity significantly and at the same time enhance the profitability of their overall customer portfolio. Further important added value arises from the distributor s in-depth knowledge of regional markets and ability to design tailor-made packages. As a result of their broader market access, distributors are often able to increase the sales of dedicated product lines outsourced by suppliers. New customers may be attracted and switch to products... 

Use of CRA is competitive with inhibition in deep, high-pressure wells, particularly in those locations where inhibitor supply may be a space and logistic problem. CRA includes stainless steels (austenitic, ferritic, martensitic, and duplex), nickel-based alloys, cobalt-based alloys, and titanium alloys. Economics is a major factor in alloy selection. The 13 Cr tubing has often been used in gas wells for low H2S wells. Tubing materials selection for a deep well could involve price increments between alloys of 1 to 3 million. High-strength CRA is used to minimize costs. SMYS values of 150 ksi (1000 MPa) are common. The CRA is often cold-worked to achieve the required yield strength. 

Demand and supply planning capabilities enable companies to balance inbound and outbound logistics and thus to maximize return on assets, and to ensure a profitable match of supply and demand. Inbound and outbound logistics are also described, as upstream and downstream processes. For example, Christopher (1992) defines supply chain management as the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. 

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