Logistics comprises a relatively large number of managerial activities. Discuss five of these activities and why they are important to logistics system.
Logistics comprises a relatively large number of managerial activities. Discuss five of these activities and why they are important to logistics system.
1. Transportation
Transportation is one of important activity in Supply Chain Management. It is the major connector of the upstream and downstream of a supply chain. It is that aspect of the supply chain that takes goods and services to the retail end. It is the major promoter of globalization and as such is one that is to be given high attention to ensure efficiency of the chain. In terms of cost, Transportation costs account for a large proportion of any mature supply chain system. And that’s why I think it is important to logistics system.
2. Inventory control
Efficient Inventory has played a big role in deciding a firm’s ability to operate with good profit margins. High inventory turnover ratio indicates that a company is efficient in controlling its inventories and is having high sales. I think that if the sales factor in the equation was not in control, having less inventory would be the way to achieve high inventory turnover ratio. The reality however is different. Having low inventory might often result in company not being able to meet the committed service levels, in other words, that more often than not, customers will be sent back home without the product they wanted or would be directed to other stores. This situation stresses the importance of efficient inventory control and its significance in efficiently managing the supply chain.
3. Customer service
Integration of logistics activities creates value for end customers, and there are more than half of orders made by regular customers. If there is not adequate communication between each other, the buyer might cut off the cooperation relationship and then find a new supplier with better service level. I believe the cost of losing business is difficult to be ignored.
However the higher quality of customer service which means the
1. Transportation
Transportation is one of important activity in Supply Chain Management. It is the major connector of the upstream and downstream of a supply chain. It is that aspect of the supply chain that takes goods and services to the retail end. It is the major promoter of globalization and as such is one that is to be given high attention to ensure efficiency of the chain. In terms of cost, Transportation costs account for a large proportion of any mature supply chain system. And that’s why I think it is important to logistics system.
2. Inventory control
Efficient Inventory has played a big role in deciding a firm’s ability to operate with good profit margins. High inventory turnover ratio indicates that a company is efficient in controlling its inventories and is having high sales. I think that if the sales factor in the equation was not in control, having less inventory would be the way to achieve high inventory turnover ratio. The reality however is different. Having low inventory might often result in company not being able to meet the committed service levels, in other words, that more often than not, customers will be sent back home without the product they wanted or would be directed to other stores. This situation stresses the importance of efficient inventory control and its significance in efficiently managing the supply chain.
3. Customer service
Integration of logistics activities creates value for end customers, and there are more than half of orders made by regular customers. If there is not adequate communication between each other, the buyer might cut off the cooperation relationship and then find a new supplier with better service level. I believe the cost of losing business is difficult to be ignored.
However the higher quality of customer service which means the