LOGISTICS OPERATION Industrial Logistics (BPT 3123) - PowerPoint Presentation

Slide1

LOGISTICS OPERATION

Industrial Logistics (BPT 3123)

Industrial Technology Management

Programme

Faculty

of

TechnologySlide2

Objectives / Outcomes

At the end of this

chapter, students should

be able to:

Understand industrial logistics management concept

Describe the elements and role of logistics in operations

Explain achievement of competitive advantage through logisticsSlide3

Contents

Definition of LogisticsLogistics Management ConceptsThe Work / Element of Logistics

Order Processing

Inventory Management

Facility Network Design

Materials Handling and Packaging

Warehousing

Transportation

Logistics and Competitive AdvantageSlide4

“the detailed coordination of a complex operation involving many people, facilities or supplies”

LOGISTICS

[ New Oxford American Dictionary]

Definition of LogisticsSlide5

Definition of LogisticsSlide6

“part

of supply chain management that plans, implements 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 customer requirements”

Logistics Management

DefinitionSlide7

Logistics ManagementSlide8

Logistics Management

Logistics concept was introduced due to need for planning and coordinating the materials flow from source to user

as

an integrated system

, rather than managing the flow of goods as a series of independent activities.

Materials Flow

Information FlowSlide9

Components

of Logistics Management

Management

Actions

Planning

Implementation

Control

Raw

materials

In-process

inventory

Finished

goods

Natural

resources

Human

Resources

Financial

Resources

Information

Resources

Time and

Place Utility

Efficient

Movement

to

Customer

Proprietary

Asset

Competitive

Advantage

Logistics

Management

Suppliers

Customers

Inputs into

Logistics

Outputs of

Logistics

Customer service

Demand forecasting

Inventory management

Logistics communications

Material handling

Order processing

Parts and service support

Plant and warehouse selection

Procurement

Packaging

Reverse logistics

Traffic and transportation

Warehousing and storage

Logistics

ActivitiesSlide10

Elements of LogisticsSlide11

1. Network Design

The prime responsibility of logistics management peopledetermines the number and type of facility (plants, warehouses, cross-dock operations and retail stores) required, their geographic locations and the work to be performed

determines the inventory type and the quantity to be stocked at each facility and the assigning of customer orders for shipment

determines network of facilities including information and transportation forms a structure from which logistical operations such as processing of customer orders, maintaining inventory and performed material handlingSlide12

2. Information / Order Processing

Forecasting and order management are 2 areas of logistical work that depend on informationImpact of information:

May cause inventory shortage

Overcommitment

Processing of incorrect order creates

additional cost

Does not result in salesSlide13

3. Inventory

While formulating an inventory management policy, the following factors should be considered:Slide14

4. Warehouse

The logistical activities that are carried out in warehousing are sorting, sequencing, order selection, transportation consolidation and sometimes product modification and assembly.Within the warehouse, products must be received, moved, sorted and assembled to meet customer order requirements and for these activities material handling become significantThere are 3 types of warehousing strategies available to an organization:Slide15

5. Material Handling & Packaging

The direct labor and capital invested in material-handling equipment represent a major part of logistics costMaterial handling operations are made efficient by using a variety of mechanized and automated devicesLogistics personnel must plan the best ways to load, offload, move, sort and select productsNeed to work closely with industrial engineers to design or select packaging materials that facilitate materials handling Slide16

6. Transportation

One of the most visible elements of logistics operations – mainly concerned with product movement and product storage3 important factors affecting transportation performance:Slide17

Competitive Advantage Through Logistics

The success in the marketplace is based around the triangular linkage of the company, customers and its competitors.

Seek Benefits at Acceptable Cost

Asset Utilization

Asset Utilization

Customers

Value

Value

Cost

DifferentialSlide18

Source of Competitive Advantage

* Competitive advantage

– the ability of an organization to differentiate itself in the eyes of customer, from its competition, and to operate at a lower cost and hence greater profit.Slide19

Summary

Logistics management provides for the flow and storage of information and products between the firm and its suppliers (inbound), the firm and its customers (outbound) and the various plants, divisions and units of the firm.The objectives of logistics management is to provide customers with their required service benefits at the lowest total logistics costA complete logistics management system comprises 6 major decision areas: facility network design, inventory management, order management, transportation management, warehousing management and packaging and materials handling management

.

Logistics has an important relationship to manufacturing, marketing,

finance

and other areas of the organization

.

The cost of logistics systems can be affected by a number of major factors, including competition in the market, the spatial relationship of

nodes

and product characteristics.