THE FUNDAMENTAL OF LOGISTIC MANAGEMENT AND STRATEGY
Xi-Er Dang
Abstract
This paper provides a basic but fundamental understanding of logistic primarily based on the book of “Logistics Management and Strategy” by Harrison and van Hoek. It will guide you through from the basic definition and concepts to the different supply chain strategies that exist, as well as providing a perception on the future logistic development. Explanation of principal terms like logistic, supply chain management and supply network is discussed, and important logistic systems like just-in-time, lean thinking and agile strategies are deliberated. Different ways of working together within the supply chain is debated, where there are different ways of sharing
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(2004). The partners or suppliers which are near the source and thus the production until the focal firm are referred to as upstream (buyer side) (Harrison and van Hoek 2005). In contrary to the partners or first and second tier customers which deliver to the final end-customer are referred to as downstream (customer side). However, all partners are responsible of adding value to the end-customer in each process they conduct, where the process can be explained as transforming inputs to outputs. (ibid.) Another term which is similar to supply chain is supply network, where both terms describe the objective of serving the end-customer through the linkage of different partners. Harland et al.‟s 2001 study (cited in Harrison and van Hoek 2005, p.10) distinct the term network and chain as following: network as a complex structure of cross linkages between organizations, and chain as a simple step-by-step link of few organizations. Harrison and van Hoek (2005) points out that the supply network should be looked at as a system where there must be an understanding of how all process are interacting with each other on a dependent way.
Competing through logistics
Harrios and van Hoek (2005) describe four ways of creating logistic advantage in which they contributes to the competitive advantages of the company. The first way is to compete through quality where the symptoms of quality problems signify
Due to the large quantity of freight and the long distance that it must travel to arrive to its destination exporters and importers alike have found logistic service providers essential to engage in international trade (Rodriguez, Comtois, Slack, 2013). While some Logistics service providers focus only on the area of transportation others specialize in freight consolidation, distribution management, and warehousing (Robinson, 2014). They have enough market knowledge, information and communication systems to offer supply chain solutions tailored to the specific needs of any company be it small or large (Rodriguez, Comtois, Slack,
According to Stevenson, supply chain management is the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management. Supply chains are sometimes referred to as value chains and have two components for each organization: supply and demand. Suppliers, producers and final customers are connected through the supply chain. Global supply chains have additional complexities that may not exist in domestic supply markets. Language and cultural differences, and increased need for trust and cooperation among the supply market are among some of these complexities. There are also risks that exist among
SME in Malaysia can be determined based on employee head count and their sales turn over. By definition, SMEs are easier to manage than large companies in many aspect of the management. By this, logistic can be a great tool for SMEs to increase their efficiency and effectiveness in business activity. Logistic in SME can be divided into customer service, demand forecasting and planning, inventory management, procurement, material handling, packaging, warehousing, transportation or even more. All of these aspects in logistic can increase the competitive advantage for SME to create more business opportunities:
A customer service is a vital component of logistic management. While each activity of logistics
4、The ___________ approach indicates that a company’s objectives can be realized by recognizing the mutual interdependence of major functional areas.
(Ballou 2007, p.338) The definitions of SCM and logistic management put emphasis on coordination, collaboration and relationship building among channel members that are missing from logistics management. Ballou (2007, p.340-341) also explained that logistics is now being viewed as a subset of SCM. The scope of logistics is being limited to the boundaries of the function within a firm and is primarily concerned with activity administration. Interfunctional and interorganizational management seem to be within the purview of SCM rather than logistics. Logistics as an identifying name supersedes physical distribution. At the most basic level, logistics management is concerned with the effective movement and storage of product, approximating the traditional economic utilities associated with creating value through time and place transformation (Chase, Jacobs, Aquilano 2006). In 2007, CSCMP offered the following definition Logistics management is that 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 consumption in order to meet customer requirements. Logistics, therefore, involves managing facilities, transportation, inventory, materials, order fulfillment, communications, third party providers and information within the firm in a way that contributes to customer
Minor Logistics Operations Presentatie titel MIRBSLM114OP N.J. Osentoski-Monsma & A. Nielsen-de Vries Lecturers Logistics Room D2.173 osenj@hr.nl / vriad@hr.nl Rotterdam, 00 januari 2007 6-1 Corporate strategy Business strategy Operations Strategy Mission Objectives (cost, quality, flexibility, delivery) Functional strategies in marketing, finance, engineering, human resources, and information systems Strategic Decisions (process, quality system, capacity, and inventory)
1. How can Design for logistic concepts be used to control logistic cost and make the supply chain more efficient?
Logistics exists to satisfy customer requirements by facilitating relevant manufacturing and marketing operation. The main responsibility of logistic is the geographical positioning of raw materials, work in process and finished inventories at the lowest possible cost.
Logistics structure orchestrating joins strategizing the surge of materials or things starting with one point then onto the accompanying. An unremarkable logistic structure outline tries to set up supply, warehousing other than the scattering of advancement base. Further, the logistic structure sorting out logistics costs paying little respect to allowing the required level of versatility to meet the affiliation necessities. In portraying an immaculate logistic framework including one and just arrangement focus, changes steps which join surveying, gathering data, showing the association and disengaging it and completing the logistics structure course of action are taken. By applying the right procedures, exact data and information are relied on to pick these steps.
Logistics management is part of supply chain management, which deals with organizing, executing and directing efficiency in the movement of goods in and out of the manufacturer’s warehouse. On the other hand, a supply chain entails the sequence of all the modalities employed in the production and distribution of goods; it consists of parties involved either directly or indirectly towards the satisfaction of the customer.
Procurement activities occurred in all supply chain activities. It has so much importance because effective decision making in procurement leads to reduces cost and finally resulted in
As a brief description of the subject in the study, the life cycle of logistics can also be maximized through establishing effective management organizing efforts to maintain a certain company’s operational structure that will avoid or prevent errors and mismanagement that can take place within the corporation. In this case, the 360 degree logistics can be found when there will be a capital expenditure that will be carried out to fund materials and human resources that will be helping to manufacture product. As soon as the product will be made and distributed to the market, there will be an exchange of commodity
Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one 's business with materials and shipping out products in an increasingly globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. This can be defined as having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer and is the science of process and incorporates all industry sectors. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies.
The Year 2008-2009 for India was quite different from the expectations of industry stalwarts and economy speculators. Increase in input materials costs, wages, interest and transportation forced companies to cut costs. Logistic service providers therefore are required to be cost effective and more efficient to compete in market place. High logistics and warehousing costs in India shows that there are