Logistics involves managing order processing, inventory, transportation, warehousing, and facility networks in an integrated supply chain. It aims to design systems that control material flows and positioning at the lowest total cost. Key elements of the logistics value proposition include availability, operational performance like delivery speed, and service reliability through measurement. Logistics operations encompass order processing, inventory, transportation, warehousing, and facility networks. Supply chain synchronization is achieved through performance cycle structures that link operational locations and control inventory and information flows.
Logistics involves managing order processing, inventory, transportation, warehousing, and facility networks in an integrated supply chain. It aims to design systems that control material flows and positioning at the lowest total cost. Key elements of the logistics value proposition include availability, operational performance like delivery speed, and service reliability through measurement. Logistics operations encompass order processing, inventory, transportation, warehousing, and facility networks. Supply chain synchronization is achieved through performance cycle structures that link operational locations and control inventory and information flows.
Logistics involves managing order processing, inventory, transportation, warehousing, and facility networks in an integrated supply chain. It aims to design systems that control material flows and positioning at the lowest total cost. Key elements of the logistics value proposition include availability, operational performance like delivery speed, and service reliability through measurement. Logistics operations encompass order processing, inventory, transportation, warehousing, and facility networks. Supply chain synchronization is achieved through performance cycle structures that link operational locations and control inventory and information flows.
Chapter 2: Logistics Logistics – involves the management of order processing, inventory, transportation, and the combination of warehousing, materials handling and packaging, all integrated throughout a network of facilities.
Logistics is the leadership responsibility to design and
administer systems to control movement and geographical positioning of raw materials, work-in-process and finished inventories at the lowest total cost. Elements of Logistic Value Proposition 1. Service Benefits a. Availability – the probability of having inventory to consistently meet customer material or product requirements b. Operational Performance – deals with the time required to deliver a customer’s order. It involves delivery speed and consistency. c. Service Reliability – involves the quality attributes of logistics. To achieve service reliability, it is essential to identify and implement inventory availability and operational performance measurement. 2. Cost Minimization – understanding total cost opened the door to examining how functional costs interrelate and impact each other. However, the implementation of effective logistical process costing remains a 21st –century challenge. Work of Logistics 1. Order Processing 2. Inventory 3. Transportation 4. Warehousing, Materials Handling and packaging 5. Facility Network
Logistical Integration Objectives:
1. Responsiveness 4. Shipment Consolidation 2. Variance Reduction 5. Quality 3. Inventory Reduction 6. Life Cycle Support Interrelated Flows of Logistical Process 1. Inventory Flow – concerned with movement and storage of inventory in the form of raw materials, work-in-process and finished products. a. CRM b. Manufacturing c. Procurement 2. Information Flow – identifies specific locations within a logistical system that have requirements. Logistical Operating Arrangements 1. Echelon Structure – means that the flow of products typically proceeds through an established arrangement of firms as it moves from origin to final destination. Logistical Operating Arrangements 2. Direct – shipped products direct to customer’s destination from one or a limited number of centrally located inventories. Logistical Operating Arrangements
3. Combined Echelon & Direct Structure
Logistics Operations Flexible Structured Operations – are preplanned contingency strategies to prevent logistical failures. Cross-docking – operation involves shipments from multiple suppliers arriving at a designated time at the handling facility. Cross-docking Supply Chain Synchronization 1. Performance Cycle Structure – represents the elements of work necessary to complete the logistics related to customer accommodation, manufacturing, or procurement. *Nodes – the operational locations that are linked by information and transportation. *Base Stock – is inventory held at a node and is typically one-half of the average shipment size received. *Safety Stock – exists to protect against variance in demand or operational lead time. * Supply chain output – is the level of performance expected from the combined logistical operations. * Supply chain effectiveness – operational requirements are satisfied in accomplishing mission through logistical performance cycle structure Supply Chain Synchronization 1. Performance Cycle Structure * Supply chain Efficiency – is a measure of resource expenditure necessary to achieve logistical effectiveness. * Supply chain relevancy – is the extent to which the basic services are customized to meet the needs of specific customers. *Supply chain sustainability – reflects the ability of desired performance to be maintained overtime.
Logistics performance cycle – is the basic unit of supply chain
design and operational control. Performance cycle structure – is the framework for implementation of integrated logistics across the supply chain. Supply Chain Synchronization
2. Performance Cycle Uncertainty
Operational Variances In terms of: a. Specific tasks – the variance results from the nature of the work involved. b. Order Processing – variance results from workload, degree of automation and policies related to credit approval. Thank You!!!