Date post: | 19-Jan-2015 |
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Business |
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LOGISTICS – AN OVERVIEW
Logistics - Definition• Logistics is one of those aspects of business,
whose importance is many times greater than what it would seem to be.
• It involves the technique of managing and controlling the flow of goods, energy, information and other resources like products, services and people from the source of production to the marketplace.
• It is the time related positioning of resources• It is the design and operation of the physical,
managerial and informational systems needed to allow goods to overcome time and spaces
Logistics
Business Logistics
Importance of Logistics
•Create Customer Value & Loyalty•Build strong relationships with product
suppliers•Logistics managers are involved in
▫Boundary & organization spanning teams▫Strategic Planning▫Alliance Building
Importance of Logistics
•Logistics has a Huge Impact on the Domestic & Global Economy
•Logistics is of Critical Importance to Human Survival
•Logistics Greatly Impacts our Quality of Life
•Logistics Affects our Success in a Wide Variety of Endeavors
Logistical Competitive Advantage•Logistics activities are represented as
part of the value chain•The Chain consists of a series of activities
that create and build value•They culminate in the total value
delivered by an Organization
The Value Chain
Receiving stores
V1
V2
Operation
Finished Goods Stores
W1 W2 W3
R1 R2 R3 R4 R5
V3
V5
V4
R6
Market
INFO
INFO
INFO
INFO
INFO
INV
INV
INV
INV
INV
Outbound Logistics
Inbound Logistics
PROCUREMENT
OPERATION
DISTRIBUTION
V
W
R3
Vendor
Warehouse
Retailer
Strategic Logistics Planning Process
Communication with stake holders and Executives
Getting
Started
Preliminary Planning
Strategizing
Authoring
Monitoring and Marketing
Strategic Plan
Document
Yes
FeedbackFeedback
YesYes
NoNo
Components of the strategic logistics plan• A management overview describing the logistics
strategy and its relationship to the other major business functions.
• A statement of logistics objectives related to cost and service for both products and customers.
• A description of the individual customer service, inventory, warehousing, transportation, supplier partnership and supplier development strategies to support the overall plan.
• An outline of the major logistics programmes or operational plans.
• Forecasts of necessary labour resources and capital requirements.
• Financial Performance Criteria
Life Cycle Support
•Logistics functions is also expected to provide life cycle support to the product after sale, that includes:▫After sales service▫Reverse logistics or Product Recall
Operational Objectives
•Rapid Response•Minimum Variance•Minimum Inventory•Movement Consolidation•Quality
Components of Logistics Management•Customers•Shippers•Suppliers•Transport Providers•Transport Infrastructure Operators &
Providers
Functions of Logistics Management•Inventory•Sales•Transportation•Import / Export•Purchasing•Functional Management•Utility/Value/Warehousing•Information Systems
LOGISTICS FUNCTIONS
WARE HOUSING- Storage,Handling, Packing & Distribution
INFORMATION SYSTEMS
- Internal & External Information flow
INVENTORY- When to order?
How much to order? Just In Time
TRANSPORTATION- Water, Road, Rail,
Pipeline & Air
NETWORK DESIGN
- Suppliers, operations, warehouses
Logistics Integration• In order to perform various functions of
logistics bringing all functions of logistics under one operational command is important.
• Performance in isolation loses sight of overall picture.
• It is like trying to solve a jigsaw puzzle without complete picture before you.
• What do we integrate? Information flow, inventory flow, procurement, operations support, physical distribution.
Logistics Integration
Inventory flow
Physical distribution
Manufacturing support Procurement
Information flow
Customer Suppliers
If we view the above graphic we see all internal logistical operations in an organization. We also see their close relationship with each other and the need to perform them in an
orchestrated fashion.