introduction to logistics , its role and scope

intro to logistics , its role and scope

1. INTRODUCTION TO LOGISTICS MANAGEMENT “an army marches on its stomach” Napoleon Bonaparte Keeping forces well-provisioned is fundamental to success in war.

2. Content Introduction Logistics Definition Evolution of Logistics Role of Logistics Components of Logistics Objective of Logistics Benefits of Logistics Scope of Logistics

3. The very essence of a business is to exchange goods or services for money or trade. Logistics is the path those goods and services take to complete the transactions. Sometimes goods are moved in bulk, such as raw goods to a manufacturer. And sometimes goods are moved as individual disbursements, one customer at a time. Today, the term “logistics” applies to the reliable movement of supplies and finished products. According to a Statista study, U.S. businesses spent $1.63 trillion on logistics in 2019, moving goods from origin to end-user through various supply chain network segments. By 2025, a total of 5.95 trillion ton-miles of freight will move across the United States. Without efficient logistics, a business cannot win the profitability war.

4. INTRODUCTION Efficient logistics is a key factor in ensuring the success of an organization from ensuring that the organization has all that it requires to produce results to ensuring that customers are satisfied. The following presentation has been prepared to give the reader an overview of logistics management from the very meaning of logistics to the phases in logistics management.

5. What is Logistics? This is the management of the flow of goods, resources and information between the point of origin and the destination (point of consumption). Logistics is the process of planning and implementing the efficient transportation and storage of goods from one point to another. It ensures that all materials and personnel are available on time and in the right place to ensure that a business objective is accomplished. Logistics thus implies having the right type of product or service at the right place, at the right time, for a right price and in the right condition. Logistics can be looked at as a subset of supply chain management which ties into project management by ensuring timely completion of a project

6. Key Takeaways Logistics management system underpins that effort and includes inbound and outbound transportation management,  warehouse management, fleet management, order processing, inventory control, supply and demand forecasting, and managing third-party logistics (3PL) service providers . Logistics is the process of efficiently moving goods from Point A to Point B. Success demands minute attention to detail, from packaging to warehousing to transportation. At best, poor logistics will dent a company’s bottom line. At worst, it can be crippling because logistics is the physical manifestation of a transaction—without it, there’s no movement of cash from customer to seller. Logistical best practices vary depending on the nature of the business and its product decisions, but the process is always complex. Automation is key to efficiency.

7. Evolution of Logistics

8. The Role of Logistics (7 Pillars) 1. Material sourcing: Material sourcing involves more than finding the lowest-cost supplier for a raw material used in manufacturing. Logistics includes calculating and managing contributing factors and costs, such as backorder delays, competitor priority rankings and lockouts, add-on services costs, extraneous fees, increased shipment costs due to distance or regulatory environments, and  warehousing costs.  Finding the right source for any given material requires a good understanding and management of all contributing factors. This process is called  strategic sourcing , and logistics plays an important role in that planning.

9. 2. Transportation: At the core of logistics is the act of physically transporting goods from Point A to Point B. First, a company needs to select the best mode of shipment—air or land, for example—and the best carrier based on cost, speed and distance, including optimizing routes that require multiple carriers. In the case of global shipments, the shipper needs to be up to speed on customs, tariffs, compliance and any relevant regulations. Transport managers need to document and track shipments, manage billing and report on performance using dashboards and analytics.

10. 3. Order fulfillment : To complete a transaction, items must be “picked” from the warehouse per the customer order, properly packaged and labeled and then shipped to the customer. Collectively, these processes  comprise order fulfillment  and are the heart of the logistics sequence in customer distribution.

11. 4 . Warehousing: Both short- and long-term storage are common parts of logistic planning. But  warehouse management systems  also enable logistical planning. For example, logistics planners must consider warehouse space availability and special requirements such as cold storage, docking facilities and proximity to modes of transportation such as rail lines or shipyards. Further, organization within the warehouses is part of logistic planning. Typically, goods that move frequently or are scheduled for transport soon are placed at the front of the warehouse. Lower-demand items are stored toward the rear. Perishable goods are often rotated so the oldest items are shipped out first. Items that are often bundled are usually stored beside one another, and so on.

12. 5. Demand forecasting: Logistics relies heavily on  inventory demand forecasting  to ensure that a business never runs short on core or high-demand products or materials—and never ties up capital unnecessarily in warehoused goods with sluggish sales, either. 6. Inventory management: By using  inventory management techniques  to plan ahead for increased demand in seasonal or trending products, companies can keep profits higher and make inventory turns faster, meaning the ratio of how many times you sell and replace inventory in a set period. Conversely, by noting slowing inventory turns on other products, a company can better determine when to offer discount pricing or other incentives to free capital to reinvest in goods that are in higher demand. Further,  retail sales  often differ store to store, region to region and country to country. Good inventory management enables the business to decide to ship products that are performing poorly in one store or region to another rather than take a loss via discount pricing to be rid of the stock. Logistics is key to moving inventory where it is likely to get the best price.

13. 7. Supply chain management: Logistics is an important link in the  supply chain  as it facilitates the movement of goods from suppliers to manufacturers and then to sellers or distributors and eventually to buyers. A supply chain is essentially a series of transactions. If logistics fails, the supply chain fails and transactions grind to a halt. A prime example: bare shelves in grocery store dairy aisles even as farmers dumped milk as supply chains broke during the pandemic.

14. Components (activities) of Logistics 1. Transportation 2. Supply. 3. Inventory planning and management. 4. Warehousing. 5. Packaging. 6. Order processing

15. Objectives of Logistics Management

16. Objectives of Logistics Management 1. To choose the most effective transportation routes 2. To identify the best delivery method 3. To seek continuous quality improvement 4. To minimize the cost of transportation 5. To facilitate quick response to customer requirements 6. To improve customer service 7. To minimize damage to goods

17. Phases of Logistics Management Inbound Logistics This is the movement of materials from the point of origin to the point of production. Outbound logistics This is the movement of finished goods from the point of production to the point of consumption. Reverse Logistics This is the movement of damaged goods from customers back to the point of production

18. Benefits of Logistics Management 1. Visibility: Logistics management affords greater visibility into the supply chain. This enables businesses to better control costs, tease out efficiencies, spot supply chain problems, conduct demand planning and gain insights into opportunities. 2. Reduced overhead: Logistics management enables companies to reduce overhead in areas from cutting shipping costs to shrinking how much warehouse space they need by proactively controlling inventory levels. 3. Improved customer experience: An excellent customer experience (CX) is the driving factor behind repeat sales. By delivering orders accurately and quickly, you improve the customer experience which in turn increase brand loyalty and future sales.

19. 4. Preventing loss: Logistics management helps prevent loss in several ways. One is by a true inventory accounting, so your company knows exactly how much stock it has on hand at any given time. Companies can also track movement and current location so stock won’t be misplaced or diverted without notice. In addition, by ensuring optimal storage and transport conditions, such as temperature and moisture management, solid logistics prevents spoilage and damage. 5. Support expansion: Demand forecasting supports expansion by realistically calculating inventory needs and ordering, transporting and stocking accordingly. Further, logistics management best practices help companies scale to fulfill more customer orders on time. 6. Competitive edge: Delivering orders correctly and on time is a foundational element in the customer experience—and good CX is key to repeat orders as well as solid brand reputation and net promotor scores, which in turn help a company acquire new buyers. Logistics management helps a company consistently deliver, or over deliver, on promises and sharpen its competitive edge.

20. Key aspects of the scope of logistics Transportation : Logistics involves the planning, coordination, and execution of transportation modes. Warehousing and Distribution : Logistics includes the management of warehouses and distribution centers where goods are stored, sorted, and distributed to their final destinations. Inventory Management : Logistics encompasses the processes and systems for managing inventory levels, ensuring the right products are available at the right time and place to meet customer demand while minimizing carrying costs and stock outs. Supply Chain Management : Logistics plays a critical role in supply chain management by coordinating the flow of materials, information, and finances across suppliers, manufacturers, distributors, retailers, and customers to deliver value to end-users efficiently and effectively. Procurement and Sourcing : Logistics involves the procurement and sourcing of materials, components, and services required for production and operations, ensuring timely delivery and cost-effectiveness. 

21. Packaging and Handling : Logistics includes the packaging, handling, and labeling of goods to protect them during transportation and storage, minimize damage, and ensure compliance with regulatory requirements. Reverse Logistics : Logistics also covers reverse logistics processes, including product returns, recycling, remanufacturing, and disposal, to manage the flow of goods and materials back through the supply chain Information Management : Logistics relies on information systems and technologies for real-time tracking and visibility of goods in transit, as well as for data analytics to optimize operations, improve decision-making, and enhance customer service. Risk Management : Logistics involves identifying, assessing, and mitigating risks associated with supply chain disruptions, including natural disasters, geopolitical issues, transportation delays, and supplier failures. Customer Service : Logistics plays a crucial role in customer service by ensuring on-time delivery, accurate order fulfillment, and responsive communication with customers throughout the supply chain. Overall, the scope of logistics is interdisciplinary, covering a wide range of activities and functions that are essential for the efficient and effective management of supply chains and the movement of goods and services in both domestic and global markets.

22. The Logistician This is an expert in logistics. The logistician coordinated the organization’s supply chain. Roles of a logistician. 1. Find the cheapest and fastest way to transport goods 2. Make suggestions to customers regarding improvements 3. Keep informed on the latest advancements in logistics technology 4. Strive to determine what customers needs are and ensure that they must meet them 5. Assess logistics functions and work to improve them

23. Logistics Environment It refers to external and internal factors that affect logistics operations and can impact the efficiency and effectiveness of supply chain management. These factors can are economic, political, regulatory, technological and market conditions, as well as the company’s internal resource, capabilities and processes. The logistics environment is constantly evolving and organizations must be prepared to adapt to changing conditions in order to remain competitive and efficient.

24. Key factors that impact the Logistics Environment Economic factors Interesst Rates Inflation Exchange Rates Political Factors: Regulations Political Stability Trade Agreements

25. Regulatory Factors: Customs and Tariffs Safety and Environmental Regulations Technological Factors: Automations and Robotics Big Data and Analytics Market Factors: Consumer Demand Competition Internal Factors Resources Processes culture

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