logistics and locations Flashcards
what is logistics?
logistics is the art of obtaining, producing and distributing materials and products to the right place at the right quantity.
what are the seven R’s of logistics?
right place right time right product right quantity right condition right price right consumer
what is the a largest contributor to logistics costs?
transportation - it is important to keep this as low as possible.
what are warehouses and what should businesses be careful of doing?
they are big buildings that obtain raw material and goods (stock) until they are needed.
businesses need to be careful that they are not leaving goods and materials in there for long periods of time as it increases the opportunity cost.
what needs to be considered when keeping costs low?
that the customer service isn’t being sacrificed.`
what is third party logistics?
use of third party businesses to outsource elements of a companies goods and materials.
what is fourth party logistics?
these are specialists in logistics and take over a businesses whole logistics operations and does it for them - for example DHL.
why and when is it more important to spend more time on focusing on logistics?
when mistakes are made and customers are not happy. businesses need to ensure that orders are complete, being delivered on time, and consistently correct over time.
what is out sourcing?
getting a specialist firm to do the job that would other wise be done in the business. for example transportation.
what are the gains of outsourcing ?
reduce overheads
pass on responsibility
businesses can focus on other core activities
what are the problems with outsourcing ?
you are relying on someone else not to fail
what is subcontracting ?
getting production done by someone else - common in construction.
what are the gains of subcontracting?
you dont need to be a specialist yourself
similar to outsourcing
what are the problems with subcontracting?
usually have to pay higher rates than a normal employee.
what is offshoring?
rellocation of a production abroad
