Logistics Management

Design & management of a system that controls the flow of materials into, through, and out of the organization Covers entire range of operations concerned with product movement Including relationships with suppliers and customers - hence marketing

Logistics Management

Also called Supply Chain Management Goal: Efficient use of resources in achieving the supply chain's customer service goals

Systems Approach

Explicitly recognize & coordinate linkages among traditionally separate logistics functions Recognizes interaction with outside organizations and individuals Creates mutual purpose for all partners in performance, quality, & timing

Strategic Tools

JIT Just-in-time delivery for lower inventory cost EDI Electronic data interchange for more efficient order processing ESI Early supplier involvement for better planning of product movement

Logistics Effort

Materials Management Controls movement through production processes Physical Distribution Management o Inflow of products from suppliers o Outflow of finished goods to customers Goal: Effective coordination for maximum cost-effectiveness while maintaining service goals & requirements
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Five Decision Areas for Logistics Management

1. 2. 3. 4. Production Transportation Facilities Inventory

5. Communications

Logistics and the Environment

Changes to its strategic orientation Systematically account for environmental laws, expectations & self-imposed goals Reverse distribution systems retrieval for subsequent use, recycling, or disposal

Example Laws

Germany: regulates packaging U.S: taxes on certain chemicals destined for toxic-waste dumps Denmark: refillable bottles for drinks Canada: deposits on beer bottles

Necessary & appropriate response to environmental concerns? or Partially motivated by protectionist reasons?

Other Environmental Issues

Retrieval of long-term capital goods Transportation Packaging Firm-specific performance and the environmental burden

Customer Service and Satisfaction

Service-sector decisions Sustainable competitive advantage Service levels Customer complaints Customer satisfaction Organizing for customer service