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LOGISTISCs MANAGEMENT
Q. What is logistics and logistics management?
A.
LOGISTICS = SUPPY + MATERIAL MANAGEMENT +
DISTRUBUTION
The term logistics have frequently used connection with the military as a term referring to the movement of supplies and the forces to the war front. By World War II it has gained importance in army operations for the movement of equipments and personnel to the war front. Now a days it has acquired greater meaning in corporate world by the term referring as the movement of raw material from the suppliers to the manufacturer and finally to the ends consumer. Logistics is concerned with the supply of product and services where they are needed and when they are desired. In other words, it is process of providing the, Right product, at right place, on right time and in right price.
According to Philip Kotler, ` Logistics is the planning, implementing and controlling the physical flow of raw materials and finished goods from the point of origin to the point of use or consumption to meet consumer requirement.
According to American Council of logistics management, ` The planning, implementing and controlling of efficient, effective flow and storage of raw materials, finished goods, works in progress and the other related information from the point of origin to the point of consumption for the customer’s requirement fulfillment.
However, logistics is the total flow of raw material, acquisition of raw material and finally to make avail the finished product or services to the end customers. Generally, logistics management deals with two major components:
- Materials Management: The time and space gap between the firm’s immediate suppliers and the manufacturing point. It is also called Physical supply management and also In-bound logistics.
- Physical Distribution Management: The time and space gap between the manufacturing point and the end consumer. It’s is also called Out-bound logistics.
INFORMATION FLOW INFORMATION FLOW
Suppliers ------------------------- Manufacturing Point ---------------------------- End Consumers
Warehousing, Inventory Warehousing, Inventory,
Transportation Core Function Transportation
Intermediaries, etc
Materials management Physical Distribution management
Q. What are the functions or role of Logistics management?
A. We can’t actually mention the functions in just point of words because there are no. of activities undertaken by the Logistics management. We can at least explain few of the most important functions of the logistics system which are given as follows:
i. Order Processing: The purchase order by the buyer to the supplier forms a basis of all information flow in the logistics system. Order processing covers the transmission and data-related handling and checking of orders from order acceptance from the customer to the receipt of all shipping documents and invoices by the customer.
ii. Inventory Management: A warehouse is a valuable facility for a company only when it is put to effective use. It means there should be sufficient amount of stock of related products in the warehouse to meet the current and upcoming orders without any delay and simultaneously keep the carrying cost to as low as possible.
iii. Transportation: By the term we can relate it to its function, Transporting. It is the crucial function of shipment or say mobility of goods and services from one point to another point of purpose. This is one of the most fundamental and important component. Firm uses different mode of transportation to deliver the products to their new owner. Effective and efficient transporting reduces the chances of delays and risks.
iv. Information Flow: It is one of most important function of the logistics system, the whole supply system is dependent upon the information provided by the manufacturer, customer and every other party involve in the system. IT tools for information, storage analysis and decision support will help the firm to enhance its activity and efficiency.
v. Warehousing: Warehouses serve as vital hubs in the flow of goods within a logistics system. They are responsible for efficient storage and supply as well as rerouting of goods. The stock of inventory is totally dependent upon proper warehousing system.
