CONCEPTS OF LOGISTICS AND DISTRIBUTION Flashcards
the positioning of resource at the right time, in the right place, at the
right cost, at the right quality.
LOGISTICS
the management of all activities which facilitate movement and the co-
ordination of supply and demand in the creation of time and place utility.
LOGISTICS
is that part of supply chain management that plans, imple-
ments, and controls the efficient, effective forward and reverse flow and storage of
goods, services and related information between the point of origin and the point of
consumption in order to meet customers’ requirements.
LOGISTICS
is the management of the flow of goods and services between the point of
origin and the point of consumption in order to meet the requirements of customers.
LOGISTICS
the efficient transfer of goods from the source of supply through the place of manufacture to the point
of consumption in a cost-effective way while providing an acceptable service to the customer.
LOGISTICS
Logistics is an important activity making extensive use of the human and material resources
that affect a national economy. Due to the difficulty of data collection, only a limited number
of studies have been undertaken to try to estimate and compare the extent of the impact of
logistics on the economy.
iMPORTANCE IN THE eCONOMY
The breakdown of the costs of the different elements within logistics has been addressed in
various surveys. One survey of US logistics costs undertaken by Establish/Herbert Davis
(2011) indicated that transport was the most important element at 49 per cent (50 per cent
in 2008), followed by storage/warehousing at 23 per cent (20 per cent in 2008), inventory
carrying cost at 22 per cent (20 per cent in 2008), customer service/order entry at 4 per cent
(7 per cent in 2008) and administration at 2 per cent (3 per cent in 2008).
IMPORTANCE OF KEY COMPONENTS
The statistics described in the previous section are useful to provide a broad perspective on
the importance of the relative logistics components. When looking at industry and company
level, however, it is essential to be aware that the above costs are average figures taken across a
number of companies.
IMPORTANCE IN INDUSTRY
In order to ensure that the concept of total logistics is put into practice
and that suitable trade- offs are achieved, it is essential that a positive
planning approach is adopted. In this section, the various planning
horizons with their associated logistics decisions are describe.
PLANNING FOR LOGISTICS
Profit can be enhanced through increased sales, and sales benefit from the
provision of high and consistent service levels. One of the aims of many
service level agreements is to try to achieve OTIF (on time in full) deliveries
– a key objective of many logistics systems.
There are a number of
ways that this might happen, including:
* more efficient transport, thus reducing transport costs;
* better storage leading to reduced storage costs;
* reduced inventory holding leading to less cash being tied up in inventory;
* improved labour efficiency, thus reducing costs.
FINANCIAL IMPACT OF LOGISTICS
The tension between globalization and the pursuit of just-in-
time operations poses a significant challenge for logistics.
The complexities arising from extended supply lead times,
intricate supply chains, and the need for visibility can hinder
efforts to reduce lead times and minimize inventory.
GLOBALIZATION AND INTEGRATION
The emergence of total logistics, driven by a heightened awareness
of the significance and intricacy of logistics, has sparked
revolutionary trade-offs in operations. This transformation is fueled
by advancements in information technology, enabling the creation
of sophisticated systems supporting the planning and management
of logistics.
INTEGRATED SYSTEM
is a method that allocates all
relevant costs and allowances directly to a specific product. Unlike
averaging costs over an entire product range, DPP assigns
distribution costs (such as storage and transport) to individual
products.
DIRECT PRODUCT PROFITABILITY
evolved as advanced computerized planning
tools, aim to ensure the availability of necessary materials and
inventory when needed. The concept originated with Materials
Requirements Planning (MRP), focused on dependent demand for
manufacturing supply.
MATERIALS REQUIREMENTS
PLANNING
extends MRPII
techniques to manage inventory and material flow,
optimizing warehousing and transportation support. DRP
systems break down material flow through the distribution
network, ensuring goods flow seamlessly on a time-phased
basis to be available as needed, aligning with classic
distribution definitions of the right place and right time.
DISTRIBUTION REQUIREMENTS PLANNING
