international logistics chaing

8/8/2019 International Logistics Chaing

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Logistics

The process of strategically managingthe movement and storage of materials,parts and finished inventory fromsuppliers, through the firm and on to

the customers.Bowersox, D (1978), LogisticsManagement, Macmillan


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Logistics versus distribution

managementLogistics differs from physicaldistribution management because it isconcerned with treating the problem ofthe movement and storage of materialsas a whole,

where physical distribution is onlyconcerned with movement and storageof materials from producer to customer.


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Key Concepts of Logistics:

The management of the storage

Flow of goods,Services and information throughoutyour organization.


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Principal Issues

Elements of Logistics

Materials management:

Sourcing and receiving of raw materials or

unfinished products for subsequent use

Material flow system:

The ability to locate and schedule material

through to end production and dispositionPhysical distribution:

The delivery of finished goods to customers


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Major logistics considerationsWarehousing How many?

What type?

Inventory management JITJust in Timelogistics management.

Transportation Road

Rail Water

Pipeline

Air

Internet


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Integrated logistics

managementEfficient and effective management ofthe logistics is based upon thefollowing:

Manage through information

Electronic data interchange

Cross-functional teamwork Build logistics partnerships

Third party logistics: Outsourcing


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The total logistics cost concept

Order processing andadministration

Inventory control

Transportation

Warehousing

Materials handling


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Channel retailing trends

New retail forms and shortening of the retail life-cycles Wheel of retailing, new types of retailer, usually begin as low-

margin, low-price, low-status operations but later evolve to higherpriced, higher service operations and eventually become like the

conventionalretailers thatthey replacedGrowth of non-store retailing click and brick retailers Retail convergence Rise of mega-retailers

Growing importance of retail technology Global expansion of retailers


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Channel wholesaling trendsFace considerable challenges

Formation of hybrid operators such asthe cash and carry concepts.


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Principal Issues

Logistic goal and objectives


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Principal Issues

Logistic goal and objectives

Accepting a customer order

Receive and enter

Credit clearance / authorize

Delivery commitment

Supplier ordering

Forecasting demand

Scheduling manufacturingInventory management

Delivery to customer.


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Marketing Intermediaries

The use of intermediaries results from theirgreater efficiency in making goods available totarget markets.

Offer the firm more than it can achieve on its ownthrough the intermediaries: Contacts,

Experience,

Specialization,

Scale of operation.

Purpose: match supply from producers todemand from consumers.


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Contact

Financing

InformationRisk Taking

Promotion

MatchingNegotiation

PhysicalDistribution

These Functions Should be Assigned to the Channel Member Who CanPerform Them Most Efficiently and Effectively to Provide Satisfactory

Assortments of Goods and Services to Target Customers.

Distribution Channel Functions


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The logistics functions1.

purchasing - of raw materials, assembled products,finished products from all over the world. Where can youget the quality you want at the best price?

2. manufacturing operations - how should the machines beorganized, how many workers do you need, where do you

stock your materials and finished products, how manyproducts do you manufacture on each production run?And the list goes on . . .

3. transportation - domestic and international, from rawmaterials to finished product; who moves what, and

when, and for what price?4. warehousing - product is either moving (transportation) or

not (warehousing). This is becoming a very sophisticatedarea and a key to shortening the time to market forproducts.


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5. inventory control - how much product is on hand, on order,intransit, and where is it? Inventory drives logistics.

6. import/export - international regulations anddocumentation can be complex. It takes aspecialist to understand the best way to getproduct across borders.

7. information systems - globalization on today'sscale is possible because there is technology thattransfers the needed information.

Logistics is performing any of the above functions, or

combinations of the above. It is the functions thatoccur within a single company. Logistics functionsused to be considered unavoidable costs to acompany, but today they are recognized as crucialto a company's competitiveness and profitability.


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Warehouse/distribution entities

Importer or independent of the Importer:

Possible need to interface with Customs and

other government agencies.Responsible for coordination with rail/truck,direct interface with Importer and/or storelevel personnel, proper storage, adequate

inventory and record keeping for all goodsreceived and dispatched/distributed,equipment control and return on a timelybasis of rail/truck/ocean carrier equipment,etc.


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RailNations largest carrier, cost-effective

for shipping bulk products

RailNations largest carrier, cost-effective

for shipping bulk productsTruck

Flexible in routing & time schedules, efficientfor short-hauls of high value goods

TruckFlexible in routing & time schedules, efficient

for short-hauls of high value goodsWater

Low cost for shipping bulky, low-value,non perishable goods, slowest form

WaterLow cost for shipping bulky, low-value,

non perishable goods, slowest form

PipelineShip petroleum, naturalgas, and chemicalsfrom sources to markets

PipelineShip petroleum, naturalgas, and chemicalsfrom sources to markets

AirHigh cost, idealwhen speed is needed or

distance markets have to be reached

AirHigh cost, idealwhen speed is needed or

distance markets have to be reached

Transportation Modes


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