Principles of Logistics
• Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources from the source of production to the marketplace.
• Logistics Management is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.
So many different consepts under different names
may refer logistics management . Including,
•Supply chain management
Logistics is, in itself, a system. It is a Network of activities with the purpose of managing the orderly flow of materials and personnel within the logistics channel. 12.12.2012
It is defined as having the right item in the right quantity at the right time at the right place for the right price.
Inbound Logistics: Flow of materials into and within the organization to internal customers.
Outbound Logistics : Flow of materials outside the organization to the customers.
Production Logistics: This ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time. Reverse Logistics: Collection of used goods from the final customer for adding value to the product.
Forward Logistics : Ensuring the supply of final goods to the desired customers.
Role Of Logistics In The Organization
Logistics can be classified into various positions depending on how it is viewed as a function in a company. If logistics plays a critical role in a company’s success, it makes sense to position it in the functional organization beside the basic functions of finance, production or human resources.
If a company can provide its customers with products quickly and at low cost, it can gain market share advantages over competitors
Integrated Logistics Management
Concept recognizes that providing better customer service and trimming distribution costs requires teamwork, both inside the company and among all the marketing channel organizations.
Cross-Functional Teamwork inside
Building Channel Partnerships
•Outsourcing logistics can reduce costs and improve delivery reliability and speed. •Coordinate supplier inventory with delivery services.
•May provide, warehousing, assembly, testing, shipping, customs.
Factors Impacting the Development of Logistics
•Advances in Computer Technology
•Development of the systems approach
•Total cost analysis concept
•Recognition of logistics role
•Erosion of firm’s profits
Critical Success Factors Today
•Cross functional management and planning skills
•Ability to define, measure and manage service requirements by market segment •Information systems
•Relationship management and win win orientation
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