“ ELEMENTS OF LOGISTICS” A Presentation by ANDREW K. BALYEJUSA (Email: andybal72@yahoo.com ; 0772413874) FIATA TOT Workshop, S heraton Hotel, Kampala – Uganda 29/ 04/ 2019
ELEMENTS OF LOGISTICS Learning Objectives: 1. To Explain the meaning of logistics. 2. To Identify various components of a logistics system.
ELEMENTS OF LOGIS TICS What is Logistics? Logistics is part of supply chain (Upstream, mid stream and Down stream.) involving material, financial, and information flows, and regulatory facilitation. Logistics plans, implements and controls the movement or storage of goods, services, related information and payments from points of origin (supply) to points of consumption (demand) as effectively and efficiently as would achieve customer satisfaction as well as operational excellence of a firm (Logistics / Supply Chain Management, Ronald Ballou, 2004).
ELEMENTS OF LOGISTICS The following aspects are integral to logistics (Logistics Management ,Ailawadi et al, 2012) Transportation Warehousing / Storage Inventory management Packaging & Packing Materials Handling Information Systems Management Location & Network design Regulation & Facilitation
ELEMENTS OF LOGIS TICS Transportation 1. Entails physical carriage or movement of goods or people using various modes from one location to another. Modes of transport include Road, Air, Water, Rail, Pipeline, Porterage, Animal etc. Choice of mode of transportation will depend on cost, speed, availability, nature of cargo, handling etc. Transportation can either be undertaken by a single mode or by combination of two or more modes. Transportation serves to bring about time and place utility.
Maj or Transportation Modes Highway (truck) Water Rail Air Pipeline
ELEMENTS OF LOGISTICS Warehousing /Storage Essentially concerns the management of space within facilities for holding or sheltering inventories required for processing or direct delivery to the market. Warehousing / Storage and facilities could be either privately owned or publicly owned. They could also be of inhouse use or externally rented or leased. Different warehouse / storage is used depending on type of goods or commodities. Design and layout of warehouse facility is important. Warehousing / storage involve costs depending on volume of space occupied, period of time and nature of goods and Materials handling.
Basic Warehouse Operations Movement Receiving Put-away Order picking Shipping Storage Stock location Warehouse Management System (WMS) Information Management Recording and identification of inbound, outbound and stationary product flows.
ELEMENTS OF LOGIS TICS 3. Inventory Refers to physical stock available as input for production or final product for delivery and sale to customers in the market. Can exist as raw materials, components, replacement parts, work in progress, finished products, or directly procured stock for sale or issue. Inventories can also be categorized as cycle stock, pipeline stock, buffer stock, speculative stock, seasonal stock and dead stock. Inventory is important in order to bridge gaps of uncertainty in supply and demand. But inventory should also be maintained within optimum levels balancing responsiveness to customer service as well as minimization of costs of holding, ordering, stock-out.
Three Factors that Decide the Level of Inventory Order Cycle Time Desired Customer Use of Inventories as Service Levels a Strategic Tool 10
ELEMENTS OF LOGIS TICS 4. Packing and Packaging Packing is the orderly arrangement and securing of cargo within a transportation equipment or storage facility. Packaging entails wrapping or enclosing protective material over goods for the convenience of handling, safety from exposure to damage, harm or pilferage. Packaging also provides visibility, enabling marketing or promotion of the products and supplier firm using the graphics, imagery and labelling. Commonly used forms of packaging are crates, bales, canvass, boxes.
ELEMENTS OF LOGIS TICS Packaging Packaging is instrumental in getting the merchandise to the destination in a safe, presentable condition. Because of the added stress of international shipping, packaging that is adequate for domestic shipping may be inadequate for international shipping. Packaging considerations that should be taken into account are environmental conditions, cost, weight, and regulatory / legal provisions. One solution to the packaging problem has been the development of inter-modal containers .
ELEMENTS OF LOGIS TICS 5. Materials Handling Materials handling involves activities or operations of loading, unloading and positioning of cargo and associated equipment or vehicles /craft at or within facilities (warehouses, terminals, depots etc). With the advancement of technology there has been an exponential shift away from manual to hi-tech mechanized and computerized handling. Modern technology based material handling has led to greater economies of scale, efficiency and improved throughput particularly at manufacturing facilities, transport terminals and warehouse distribution centres. Handling technologies have been developed according to different cargoes such as containerized, bulk (wet or dry), break bulk, wheeled etc.
ELEMENTS OF LOGIS TICS 6. Information Systems Management An efficient logistics system must be supported by a robust information system to plan, coordinate and control the movement of inventory and finances back and forth among various parties and processes within the supply chain. Information systems can be manual involving paper documentation as well as of hi-tech or electronic media. With the advent of e-commerce where the internet or web- based technologies are applied, it is possible to network using various parties in logistics with applications like eg EDI, ERP , SAP
ELEMENTS OF LOGIS TICS 7. Location and Network Design Location of facilities relative to sources of supply of inputs as well as customer markets is critical in logistics. They affect lead times in meeting customer orders as well as costs of fulfilment. Spatial distances in between are critical. Networking by a logistics entity with its critical stakeholders or partners among them suppliers, distributors, customers, and their location is important.
ELEMENTS OF LOGIS TICS 8. Institutional Regulation & Facilitation: The role of governmental and non-governmental actors in setting, maintaining or controlling standards, restrictions and provisions of good practice features. Among these are Customs Authorities, Industry associations, International agencies, and firm policies etc.
ELEMENTS OF LOGISTICS QUIZ What is Logistics? 1. 2. List any 6 elements of a Logistics System.
REFERENCES 1. Logistics / Supply Chain Management (Ronald Ballou, 2004) 2. Logistics Management (Satish Aliawadi et al, 2012)
THANK YOU
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