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CHAPTER 1 An Overview of Logistics 2
CHAPTER 1 An Overview of Logistics 2
CHAPTER 1 An Overview of Logistics 2
OVERVIEW OF
LOGISTICS
Learning Objectives
A Supply chain
Different customers
have
different logistical
needs and wants!
(p.21)
Mass vs Tailored Logistics
Mass Logistics Every customer gets the same
type and level of logistics service.
Possession utility
Form utility
Place utility
Time utility
Economic Utilities
Possession utility
The value or usefulness that comes
from a customer being able to take
possession of a product.
Economic Utilities
Form utility
refers to a product’s being in a form that
- can be used by the customer and
- is of value to the customer.
Economic Utilities
Place utility
refers to having products available where they
are needed by customers.
Economic Utilities
Time utility
refers to having products available when they
are needed by customers
The Increased Importance of Logistics
Example:
Finance (P.27)
Capital budgeting decisions
Measuring Inventory (Value Vs. Units)
Production (P.27)
Length of production runs
Excess inventory
Postponement concept: delay of value added activities
Marketing (P.28)
places an emphasis on consumer satisfaction, and
logistics strategies can facilitate customer satisfaction
through:
Equipment selection.
Activities in the Logistical Channel
Order management: (p. 33)
Speed and accuracy
Transportation Management
Transportation: Actual physical movement
Selecting the mode of shipment & choosing the route.
Most costly logistics activity in many organizations.
Warehousing Management
Management of space needed
to hold inventory
Location, ownership, design
Logistics Careers
Logisticians need to be both a generalist and a
specialist
As a generalist, the logistician must understand the
relationship between logistics and other corporate
functions, both within and outside the firm.