LOGISTICS

Logistics Operations and Techniques

Logistics Operations and Techniques

Introduction

The objective of integrated logistics is the coordinated flow and storage of components over the provide chain. Integrated logistics administration is accomplished by integrating the logistics business methods of the partners in a provide chain. The very essence of global supply chain management depends on the ability to coordinate the flow and storage of materials across multiple partners using integrated business processes. It is the glue that retains a provide string of links together. In the following sections of this chapter, I first view logistics in the context of global supply chain management and then explore the benefits of integrated business processes. Subsequently, I introduce a framework and guidelines for the design and implementation of integrated logistics management. Finally, I present some examples of integrated logistics management in global supply chains.

Logistics in the Context of provide Chain Management

To deliver product to final customers, multiple organizations usually business entities hold inventory and add value to the product as it moves along the supply chain.

Every organization or business within the supply chain manages its activities with business processes. As far as logistics is concerned, it is useful to understand that there is a sequential relationship. First, the organization quantifies the demand that is likely to be placed on it from downstream in the supply chain using a forecasting business process. Subsequently, managers plan their activities in response to this demand with a planning process or processes. Next, they execute these plans with purchasing, operations, and selling processes. Finally, they monitor and review planned versus actual performance to determine if, when, and where to restart this cycle(Schultz, 1985, p. 29).

Many businesses focus all their attention on their own activities without much regard for what happens upstream and downstream in the supply chain. The design of their logistics business processes reflects this strategy. Forecasting only quantifies the expected demand from their immediate downstream customer. The planning processes may aim to satisfy only some of the forecast demand since the organization's strategy may call for culling less profitable or problematic demand. It may even plan quantities in excess of the forecast demand with the intention of launching initiatives to find additional customers. Logistics-intensive value-adding activities such as movement of materials may be designed on a lowest-cost basis for each activity if the impact of late deliveries for this organization is small (Schonberger, 1984, pp. 7).

In marked contrast stands the promise of supply chain management: multiple organizations collaborating to deliver a product to the end customer at the lowest total cost for the whole supply chain. This global optimization objective requires that inventory be kept where it serves the supply chain best, and inventory movements are planned and executed to support the overall supply chain requirements. Thus, logistics business processes in the context of supply chain management are designed and implemented differently. Forecasting becomes a conduit for anticipating demand from the whole downstream supply chain. Planning what, when, and how many items to move and store in an ...