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INTRODUCTION
LOGISTICS INTRODUCTION
THE TERM LOGISTICS IS DERIVED FROM MILTARY ORGANISATION AND IT WAS IN USE IN THE DAYS OF LOUIS XIV OF FRANCE. IT WAS EVEN FELT THEN THAT THE EFFECTIVENESS OF MILTARY ORGANISATION DID NOT MERELY DEPEND ON THE WEAPONS, FIGHTING SKILLS AND THE FIGHTING SPIRIT OF THE SOLDIERS. IT WAS ALSO EFFECTED BY THE EFFICIENCY OF TRANSPOTATION AND SUPPLY OF AMMUNITION AND FOOD. LOGISTICS WAS THE TERM TO MEAN FOR THIS MILTARY SUPPORT (I,E, TRANSPORTATION AND SUPPLY OF FOOD MATERIAL AND AMMUNITION) MILTARY SUCCESSES OF THAT TIME WERE ATTRIBUTED TO LOGISTICS.
LOGISTICS INTRODUCTION
LOGISTICS MANAGEMENT WHEN CONSIDERED IN THE CONTEXT OF INDUSTRIAL ACTIVITY, REFLECT SIMILAR KIND OF APPROACH TO IMPROVE FLOW OF PRODUCT FROM SOURCE OF ORIGIN THROUGH DIFFERENT STAGES AND FINALLY TO CUSTOMER. IN INDIA THE CONCEPT IS GAINING GROUND. CURRENT MARKET FORCES - INCREASED COMPETION, HIGH COSTS OF ACQUISITION AND DISTRIBUTION OF PRODUCTS INCLUDING RAW MATERIALS INCREASED SERVICE LEVELS DEMANDED BY THE CUSTOMERS AND SHRINKING PROFITS HAVE FORCED THE MANAGEMENT TO REALIZE THE NEED AND IMPORTANCE OF EFFICIENT MANAGEMENT OF PHYSICAL FLOW OF RAW MATERIAL, COMPONENTS/ PARTS, SPARES, WORK IN PROCESS AND FINISHED GOODS FROM SUPPLIERS, THROUGH THE ORGANISATION AND FINALLY TO THE CUSTOMER.
LOGISTICS INTRODUCTION
EVERY ORGANISATION, BE IT IN THE MANUFACTURING OR NON MANUFACTURING SECTOR, REQUIRES A TOOL/SYSTEM FOR THE INTEGRATION AND COORDINATION OF DIFFERENT FUNCTIONAL ACTIVITIES TO SMOOTHEN THE FLOW AT MINIMUM COST. LOGISTICS MANAGEMENT HAS BEEN EVOLVED TO ACHIEVE SUCH AN INTEGRATION. LOGISTICS MANAGEMENT HAS ALSO BEEN KNOWN BY VARIOUS OTHER NAMES SUCH AS TOTAL PHYSICAL DISTRIBUTION, COMPLETE FLOW MANAGEMENT, AND SUPPLY MANAGEMENT. ANOTHER TERM WHICH IS BEING WIDELY USED IN USA AND IS GAINING GROUND IN OTHER COUNTRIES IS INTEGRATED LOGISTICS MANAGEMENT.
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SUPPLIER
INBOUND LOGISTICS
PRODUCTION
OUTBOUND LOGISTICS
CUSTOMER
MATERIALS MANAGEMENT
PHYSICAL DISTRIBUTION
LOGISTICS MANAGEMENT
LOGISTICS MANAGEMENT
SCHMIDT (1986) DESCRIBES LOGISTICS MANAGEMENT AS : THE MANAGEMENT I.E. THE PLANNING, EXECUTION AND CONTROL, OF ALL FACTORS THAT AFFECT THE MATERIALS FLOW AND THE INFORMATION ABOUT IT, SEEN FROM THE PERSPECTIVE OF CUSTOMER REQUIREMENTS FOR THE PURPOSE OF ACHIEVING A HIGH DELIVERY, A HIGH RELIABILITY, A HIGH DEGREE OF COMPLETENESS AND A SHORT DELIVERY TIME. INSTITUTE OF PURCHASE AND SUPPLY LOOKS AT LOGISTICS AS UNDER : LOGISTICS IS THE CONCEPT WHICH SEEKS TO PROVIDE FOR THE MANAGEMENT AND CO-ORDINATION OF THE ACTIVITIES WITHIN THE SUPPLY CHAIN FROM SOURCING AND ACQUISITION, THROUGH PRODUCTION, WHERE APPROPRIATE, AND ON THROUGH DISTRIBUTION CHANNELS TO THE CUSTOMER. THE GOAL OF LOGISTICS IS THE CREATION OF COMPETITIVE ADVANTAGES THROUGH THE SIMULTANEOUS ACHIEVEMENT OF HIGH CUSTOMER SERVICE LEVELS, OPTIMUM INVESTMENT AND VALUE FOR MONEY.
LOGISTICS MANAGEMENT
ACCORDING TO BOWERSOX AND CLOSS: LOGISTICS MANAGEMENT INCLUDES THE DESIGN AND ADMINISTRATION OF SYSTEMS TO CONTROL THE FLOW OF MATERIALS, WORK IN PROGRESS AND FINISHED INVENTORY TO SUPPORT BUSINESS UNIT STRATEGY.
LOGISTICS MANAGEMENT
FROM THE ABOVE DEFINITIONS, WE CAN CONCLUDE 1. LOGISTICS MANAGEMENT IS THE FUNCTION OF MANAGING THE TOTAL FLOW OF MATERIALS WHICH INCLUDES MOVEMENT OF RAW MATERIALS FROM SUPPLIERS, IN PROCESS WITHIN THE FIRM, AND MOVEMENT OF FINISHED GOODS TO THE CUSTOMER. LOGISTICS MANAGEMENT COVERS BOTH PHYSICAL FLOW OF PRODUCTS AS WELL AS INFORMATION FLOWS COVERING REPORTS AND DOCUMENTATION RELATING TO GOODS MOVEMENT. LOGISTICS MANAGEMENT EVOLVES PROCEDURES THAT MEET CUSTOMER SERVICE AT THE MINIMUM COST. LOGISTICS MANAGEMENT ACHIEVES COST REDUCTION BY SPEEDING THE FLOWS OF MATERIALS, WORK IN PROGRESS AND FINISHED PRODUCTS.
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IMPROVING EFFECTIVENESS OF LOGISTICS MANAGEMENT 5. WAREHOUSING, MATERIALS HANDLING AND PACKAGING : THE CHOICE AND LOCATION OF THE WAREHOUSE SHOULD BE WITH A VIEW TO GET CLOSER TO THE CORE CUSTOMERS. MATERIALS HANDLING WITHIN THE WAREHOUSE SHOULD BE PLANNED TO ENSURE SAFE AND SPEEDY RECEIPT, MOVEMENT, STORAGE AND PACKAGING OF CUSTOMERS REQUIREMENTS.
TRADITIONAL ORGANIZATION
CHIEF EXECUTIVE
PRODUCTION CONTROL
PURCHASING
STORE
FINANCE
MARKETING
TRANSPORT
PRODUCTION
MARKETING
FINANCE
LOGISTICS
MATERIALS MANAGEMENT
PURCHASING
STORE
MANAGEMENT
PRODUCTION CONTROL
TRANSPORT
DISTRIBUTION
DESPATCH