LOGISTICS
1
DEFINITION
Schmidt (1986) describes logistics management as – “The management (i.e. the planning, execution & control) of all the factors that affect the materials flow & the information about it, seen from the perspective of customer requirements, for the purpose of achieving a high delivery, a high reliability, a high degree of completeness & a short delivery time.” According to Bowersox & Closs – “Logistic management includes the design & administration of systems to control the flow of materials, work in progress & finished inventory to support business unit strategy.”
2
Definition (Contd.)
Logistics management – • Total flow of materials • Covers both physical flow of products as well as information • Evolves procedures that meet customer service • Achieves cost reduction
3
Objectives
Basic objective – to get the right goods /services, to the right place, at the right time, in the right condition & at the right cost. • Highest level of customer service & satisfaction • Minimize operating costs • Reduce time spent at every stage • Add value at every stage • Control & reduce inventory, wherever possible • Raise company’s image • Improve company’s communications • Implement the principles of just-in-time • Promote co-operation & co-ordination among sub-systems
4
ACTIVITIES/COMPONENTS
• • • • • Order processing Transportation management Inventory management – buffer stocks, lead time, replenishment of stocks Warehousing – site selection, space determination, layout & design, receipts, issues & storage, preservation Materials handling – smoothening of materials flow, selection & maintenance of materials handling equipment Packaging Acquisition – sourcing, planning & ordering of the product in order to ensure its availability in the right quantity, at the right time, at the right place & at the right cost. Product scheduling – preparation of schedules of aggregate quantities to be produced in accordance with demands, actual as well as projected Information system – database of customer location, sales volume, inventory levels, lead times etc.
• •
• •
5
SIGNIFICANCE /IMPORTANCE
• Outputs of the logistics system are competitive advantage • Includes all cross-functional co-ordination activities which have a cumulative effect on the profitability of a firm. • Adds value when inventory is correctly maintained to facilitate sales to meet the customer demand • Provides capability to identify potential operational break downs & taking corrective action prior to failure of service to customers • Enables performance above industry average in terms of inventory availability as well as speed & consistency of delivery to customers • Provides capability to monitor logistical performance on a real-time basis through efficient information systems • Includes high delivery performance • Commitment to continuous improvement • Enables firms to become attractive suppliers & ideal business partners
6
doc_461576719.ppt
1
DEFINITION
Schmidt (1986) describes logistics management as – “The management (i.e. the planning, execution & control) of all the factors that affect the materials flow & the information about it, seen from the perspective of customer requirements, for the purpose of achieving a high delivery, a high reliability, a high degree of completeness & a short delivery time.” According to Bowersox & Closs – “Logistic management includes the design & administration of systems to control the flow of materials, work in progress & finished inventory to support business unit strategy.”
2
Definition (Contd.)
Logistics management – • Total flow of materials • Covers both physical flow of products as well as information • Evolves procedures that meet customer service • Achieves cost reduction
3
Objectives
Basic objective – to get the right goods /services, to the right place, at the right time, in the right condition & at the right cost. • Highest level of customer service & satisfaction • Minimize operating costs • Reduce time spent at every stage • Add value at every stage • Control & reduce inventory, wherever possible • Raise company’s image • Improve company’s communications • Implement the principles of just-in-time • Promote co-operation & co-ordination among sub-systems
4
ACTIVITIES/COMPONENTS
• • • • • Order processing Transportation management Inventory management – buffer stocks, lead time, replenishment of stocks Warehousing – site selection, space determination, layout & design, receipts, issues & storage, preservation Materials handling – smoothening of materials flow, selection & maintenance of materials handling equipment Packaging Acquisition – sourcing, planning & ordering of the product in order to ensure its availability in the right quantity, at the right time, at the right place & at the right cost. Product scheduling – preparation of schedules of aggregate quantities to be produced in accordance with demands, actual as well as projected Information system – database of customer location, sales volume, inventory levels, lead times etc.
• •
• •
5
SIGNIFICANCE /IMPORTANCE
• Outputs of the logistics system are competitive advantage • Includes all cross-functional co-ordination activities which have a cumulative effect on the profitability of a firm. • Adds value when inventory is correctly maintained to facilitate sales to meet the customer demand • Provides capability to identify potential operational break downs & taking corrective action prior to failure of service to customers • Enables performance above industry average in terms of inventory availability as well as speed & consistency of delivery to customers • Provides capability to monitor logistical performance on a real-time basis through efficient information systems • Includes high delivery performance • Commitment to continuous improvement • Enables firms to become attractive suppliers & ideal business partners
6
doc_461576719.ppt