Logistical performance cycles

Logistical activities in logistical value chain

Types - procurement, manufacturing support,
physical distribution
Link all facilities in a value chain up and down
by information and product movement
Input sensitive (customer order) & dynamic
Sensitiveness determines efficiency of
operating system
logistical performance cycles link all
participating firms and organizations in the value
chain 1
 Logistical Information
 Importance of information
Facilitation of decision making
Information eliminates/reduces uncertainties
Information links logistical activities into an
integrated process
Information functionality
Functions of information are
• Integration of logistical activities
•Triggering the flow of materials
• Performance measurement
•Logistical decision making
• Logistical strategy development
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 Four levels of information functionality
(functions) are
transaction, management control, decision
analysis and strategic planning systems
Transaction level
The most basic level of information activities
 Activities triggered by a customer order like
order entry, inventory assignment, order
selection, shipping & invoicing

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Information about all these transactions answers
customer queries
Rest of the functionality levels are on the base of
transaction level
Management control level
Logistical performance measurement and
reporting
Feedback about customer service level and
resource utilization for evaluation and necessary
action
Decision level
Helps managers identify logistical strategic
alternatives
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 Strategic planning level
Developing refining logistical strategy
Principles of logistical information
Principles are availability, accuracy, timeliness,
exception based LIS, flexibility, appropriate format
Availability
Rapid availability is vital for responding to
customer needs and management decisions
Quick access to information even in decentralized
system from anywhere
Accuracy
LIS Vs reality. Eg. inventory levels as per LIS
Vs. physical stock levels 5
 Timeliness
Time gap between event taking place and
information appearing in LIS
An item moving from WIP status to finished
goods status has major significance
If LIS is not updated timely information leads to
wrong decisions

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 Flexibility
Ability to handle diverse informational needs of
organization and customers
Appropriate format
Right structure and sequence
Ease in decisions like locating the inventory for
order processing or inventory planning
Logistical information system functionality
Logistical information system integrates the
logistical operating system to provide the
organization competitive edge
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 Order management
Order entry, editing the order for acceptability,
checking inventory availability, confirming up
delivery dates, confirmation of customers
requirements
Primary interface between customer service
representative and logistical operating system
Order processing
Allocation of inventory on real time or in batch
mode
Back order creation
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Conflict resolution to match customer requirement
Order selection [to direct distribution to draw the
inventory from a specific DC]
Distribution operation
Directing all activities in a distribution center to
meet customer order requirement. This includes
receiving, handling, storing, order selecting etc.
Transportation and shipping
 Plan execute and manage all transportation
activities like shipment planning, scheduling,
shipment consolidation, shipment notification,
document generation and carrier management
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LIS for transportation and shipping involves
shipper, consignee and carrier
Procurement
Purchase order preparation, modification and
release
Track and coordinate shipping and receiving
activities for consolidation
Exception-based LIS
Highlighting problems and opportunities for
management action
Handling exceptions, making manager free for
judgmental decision making
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 How a logistical information system is
designed?
How many access points?
How various access points are connected? LAN?
Satellite? Internet?
Outputs-what do we want?
Software
Hardware
Inputs-orders? Queries?
Status files-information in real time

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