DEFINITION:
Planning, implementing, and controlling efficient and effective flow and storage of goods and services from point of origin to point of consumption to conform to customer requirements.
LOGISTICS MANAGEMENT:
Managerial responsibility to design and administer a system to control the flow of material, work in process, and finished inventory to support business entity.
ACTIVITIES INVOLVED IN LOGISTICS:
* Customer Service
* DISTRIBUTION Communication
* Inventory Control
* Material Handling
* Order Processing
* Procurement
* Packaging
* Traffic & Transportation
* Warehousing & Storage
* Demand Forecasting
* Return Goods Handling
OBJECTIVES ACHIEVED THROUGH LOGISTICS MANAGEMENT:
* Rapid Response
This is concerned with a firm's ability to satisfy customer service requirements in a timely manner.
* MINIMUM VARIANCE
Variance is an unexpected event that disrupts performance of the system.
* MINIMUM INVENTORY
To reduce and manage inventory to the lowest possible level while simultaneously achieving desired operation aim.
LOGISTICS VS SUPPLY CHAIN MANAGEMENT
* Logistics is typically considered as the sub-set of Supply Chain Management
* Supply Chain Management has ( 5 ) key functions:
Procure
Make
Move
Store
Service
Logistics is involved at various stages of supply chain; from supplier to plants, from plants to distribution centers, from distribution centers to stores, from stores to customers.
LOGISTIC MANAGEMENT
KEY LOGISTICS DECISIONS
1. How many plants and/or warehouses.
2. Where should the plants and/or warehouses be located
3. What merchandise volume each plant and/or warehouse have
4. Which plant should service which warehouse, and which warehouse should service which customers
FACTORS TO BE CONSIDERED FOR LOGISTICAL EXCELLENCE
* AVAILABILITY: This means having inventory to consistently meet needs of
Customer material or product requirement.
* OPERATIONAL PERFORMANCE:
Means time spent from order receipt to delivery. Measured in terms of how well the company can accommodate customers unusual requests.
*
SERVICE RELIABILITY:
Quality attributes of Logistics.
LOGISTICAL SUB-SYSTEMS
* Physical Supply
Management of flow of rawe materials, spare parts, machinery and tools from suppliers
* Physical Distribution
Management of finished goods from the factory to the customers
* Logistical Controls
Efficient co-ordination of physical supply and distribution sub-systems
PARTIES INVOLVED IN LOGISTICS
* Shippers
* Suppliers
* Carriers
* Warehouse providers
* Freight forwarders
* Terminal Operators
* Government
* Customers
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