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 suppliers Logistics managers are involved in
Boundary & organization spanning teams Strategic Planning Alliance Building

product

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

I N F O V 5

V 1

V 2

V3 I N V

Receiving stores

V 4

PROCUREMENT

I N F O

Inbound Logistic s

I N V

Operation
I N F O

Outbound Logistics

I N V

OPERATION

Finished Goods Stores

I N F O

W1

W2

W3

I N V

DISTRIBUTION

Vendor Warehouse Retailer

I N F O

R1

R2

R3

R4

R5

R 6

I N V

R3

Market

Strategic Logistics Planning Process

Communication with stake holders and Executives

Getting Started

Preliminary Planning

Strateg izing

Author ing

Strategic Plan Document

Yes

Yes Yes

Feedback Feedback

No No

Monitoring and Marketing

Components logistics plan

of

the

strategic

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

INFORMATION SYSTEMS - Internal & External Information flow

NETWORK DESIGN - Suppliers, operations, warehouses

LOGISTICS FUNCTIONS

WARE HOUSING - Storage, Handling, Packing & Distribution

TRANSPORTATION - Water, Road, Rail, Pipeline & Air

INVENTORY - When to order? How much to order? Just In Time

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 Customer
Physical distribution Manufacturing support

Procurement

Suppliers

Information flow

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.