Logistics & Supply Chain Operations

What is Supply Chain Operations?

Supply Chain refers to how the business obtains its resources. For
example, the suppliers that supply the kiss baking company with flour to
produce bread and cakes. Distribution channels also have supply chain. The
supply chain for one firm may be the distribution channel for another and vice
versa.

What is logistics?

Logistics is the overall process or activities involved in ensuring that the

goods reach the place where they are required or needed. It involves storage
and transportation.

Logistics is a PART of supply chain operations.

According to the renowned marketing guru, Phillip kotler, logistics can be as,

“planning, implementing and controlling the physical flow of material and

finished goods from point of origin to point of use to meet the customer’s
need at a profit.”

Components of Logistics:

 Forward and reverse flow

 Warehousing
 Insurance
 Information flow
 Material handling
 Order fulfilment
 Inventory (stock) management.
 Supply Chain Operations

LOGISTICS
Logistics
logistics

Logistics

Logistics refers to what happens within the firm with regards to purchase and
delivery of raw materials, packaging of goods, shipment and transportation of
goods to distribute etc.

1. Forward and reverse flow – the movement of goods is a two way

process. Goods can be delivered to customers (forward) but, goods can
also be returned ( reverse) to the business. Reasons for returning goods:
 Repair to goods
 Goods were received by the customer damaged
 Goods have become damaged etc.

2. Warehousing

A warehouse is a commercial building used to store goods ( raw materials,

work in progress and finished goods). The goods are stored temporarily until
they are ready to be distributed and sold to other businesses.

Some inbound functions may be undertaken here such as packaging and

labelling and assembling component parts as well as the storing of raw
materials. Some outbound functions may be shipping of goods to final
destination.

Warehousing bridges the gap between goods that are available and when
they are needed or available for selling. Also holding raw materials for storage
when they are required for production. Warehousing can extend the life of
perishable goods by storing them at required temperatures until they are
needed. It can also maintain price stability by storing goods to avoid price
fluctuations which occurs when there is too much or too little goods on the
market.

3. Insurance
Insurance provides compensation for goods involved in the chain of
distribution. There are many risks involved in the chain of distribution
such as: loss of power supply to storage rooms in the case of cool or
freeze storage; stealing or damaging of goods in transit, fire, vandalism
etc.

4. Information Flow
Information can flow between the sender (consignor) and receiver
(consignee) of goods.

Activities in the Supply Chain

1. Transformation of natural resources – conversion of raw materials into a

product e.g. milk into ice – cream;
2. Movement and storage of natural resources – the transporting and
storing of raw materials until they are required for production;
3. Processing of raw materials into finished goods;
4. Storage of work – in – progress and finished goods – partly finished and
finished goods stored until they are needed e.g. partly finished and
finished motor vehicles are stored until they are needed for completion
or to be sold;
5. Delivering of finished product .

What is Digital Delivery/ online distribution/electronic software

distribution ESD?

Digital Delivery is the distribution of digital media e.g. audio, video,

software and video games via the web and mobile phones. It also refers to
the completing and submitting of forms online, paying for goods and
services online etc.