TRL 2604
INTEGRATED LOGISTICS
Unit 1 – Basic Concepts & Goal of Logistics
Logistics & the Supply Chain SU 1 pg. 2; par. 1.2 & TB Ch. 1 pg.4,7
Supply chain management [SCM] definitions:
Consists of multiple firms collaborating to leverage strategic positioning & improve
operating efficiency.
Encompasses planning & management of all activities involved in sourcing &
procurement, conversion, all logistics management activities.
Includes coordination & collaboration with channel partners (i.e. suppliers /
intermediaries/third party service providers/customers).
Integrates supply & demand management within & across companies.
Supply Chain:
Is the alignment of firms that bring products/services to the market.
Consists of the key business processes (from original supplier to end-user) that
provide products/services/information which add value for customers &
stakeholders.
Logistics:
Process of planning, implementing & controlling procedures for efficient & effective
transportation and storage of goods, services & information from point of origin to
point of consumption for the purpose of conforming to customer requirements.
The work required to move & position inventory within the broader framework of
supply chain.
Definition includes in-, outbound, in- & external movements
Logistics is the process that creates value by timing and positioning inventory and it is the
combination of a firm’s
- order management - transportation - Inventory
- warehousing - materials handling - packaging
, Logistics is concerned with satisfying customer expectations by ensuring that the
required quantity of product or services are available at the place & time required at
the lowest total cost.
Integrated Logistics:
Serves to link & synchronize overall supply chain as continuous process & is essential
for effective supply chain connectivity.
Integrating activities to achieve particular level of customer service at lowest total
cost.
Integration management = create value
Economic Value Market Value Relevancy Value
Builds on economy Presenting attractive Involves
of scale in assortment of customization of
operations as source products @ the right value adding
of efficiency. time & place. services.
Seeks to fully utilize Focuses on achieving Means the right
fixed assets to economy of scope in products & services,
achieve the lowest product & service @ the right place.
total landed cost. presentation. Transforming
Its efficiency is Customer take-away ingredients into
quality product & = convenient ready-to-eat meals /
Service creation. product & service fashionable apparel.
Customer take-away assortment & Customer take-away
= high quality at low choice. = unique
price. product/services
bundle.
Logistics SU 1 pg. 2; par. 1.3 & TB Ch. 1 pg.28-29
Is about satisfying customer expectations/adds value by ensuring required quantity
of a particular product (raw materials/ semi-finished/finished products) is available at
place and time required at the lowest total cost.
It involves a number of processes/activities that cut across various functional
departments and even other participants in the supply chain.
Goal of logistics: - service & cost
- to support procurement
- manufacturing
- customer accommodation
Renaissance: Because logistics is both old & new, the term characterizes the rapid change
taking place in best practice.
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