basic concepts and tasks of logistics in enterprise

7/21/2019 Basic concepts and tasks of logistics in enterprise

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Basic concepts and tasks

of logistics in enterpriseINTERNATIONAL LOGISTICS


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Contents

1. Basic concepts and tasks of logistics in enterprise.

2. Elements of logistic system in enterprise.

3. Logistics management.

4. The functional components of logistics management and theirfeatures:

5. Logistics automation


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1. BASIC CONCEPTS ANDTASKS OF LOGISTICS IN

ENTERPRISE


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Logistics is the process of planning, implementing andcontrolling the efficient, cost effective flow and storageof raw materials, in-process inventory, finished goodsand related information from point of origin to point ofconsumption for the purpose of conforming tocustomers requirements.

THE AMERICAN COUNCIL OF LOGISTICS MANAGEMENT

Other scientists define logistics as planning, implementing, and controllingthe physical flows of materials and finished goods from point of origin to poinof use to meet the customers need at a profit.


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Objectives of logistics

Reduction of inventory: Inventory is one of the key factors, which can affect the

profit of an enterprise to a great extent. Logistics helps in maintaining inventory at

the lowest level, and thus achieving the customer goal. This is done through small,

but frequent supplies.

Economy of freight: Freight is a major source of cost in logistics. This can be reduced

by following measures like selecting the proper mode of transport, consolidation of

freight, route planning, long distance shipments etc.

Reliability and consistency in delivery performance: Material required by the

customer must be delivered on time, not ahead of the schedule or behind the

schedule.

Minimum damage to products.

Quicker and faster response.


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Functions of logistics

Order Processing: It involves steps like checking the order for any deviations in theagreed or negotiated terms, price, payment and delivery terms, checking if the materiais available in stock, producing and scheduling the material for shortages, and alsogiving acknowledgement to the owner, by indicating any deviations.

Inventory Planning and management: Activities like inventory forecasting, engineeringthe order quantity, optimization the level of service, proper deployment of inventory etc.are involved in this.

Warehousing: This serves as the place where the finished goods are stored before theyare sold to the customers finally. This is a major cost center and improper warehousemanagement will create a host of problems.

Transportation: Helps in physical movement of the goods to the customers place. This isdone through various modes like rail, road, air, sea etc.

Packaging: A critical element in the physical distribution of the product, which alsoinfluences the efficiency of the logistical system.


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2. ELEMENTS OF LOGISTIC

SYSTEM IN ENTERPRISE


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Elements of logistic system inenterprise

Warehousing (Space determination, stock layout, configuration, stockplacement)

Materials handling ( equipment selection & replacement policies, order-picking procedures, stock storage & retrieval)

Purchasing (supply source selection, purchase timing, purchase quantities)

Protective packaging (designed for handling, storage, protection fromloss/damage)

Cooperate with production/operations (specify aggregate quantities,sequence & time production output, schedule supplies)

Information maintenance (info collection, storage & manipulation, dataanalysis, control procedures)


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3. LOGISTICS

MANAGEMENT


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Logistics management is a supply chain management

component that is used to meet customer demandsthrough the planning, control and implementation of theeffective movement and storage of related information,goods and services from origin to destination. Logisticsmanagement helps companies reduce expenses andenhance customer service.

The logistics management process begins with raw materialaccumulation to the final stage of delivering goods to the destination


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Elements of logistics management

Selecting appropriate vendors with the ability toprovide transportation facilities

Choosing the most effective routes for transportation

Discovering the most competent delivery method Using software and IT resources to proficiently handle

related processes


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In logistics management, unwise decisions create multiple issues. For

example, deliveries that fail or are delayed lead to buyerdissatisfaction. Damage of goods, due to careless transportation, isanother potential issue. Poor logistics planning gradually increasesexpenses, and issues may arise from the implementation of ineffectivelogistics software. Most of these problems occur due to improperdecisions related to outsourcing, such as selecting the wrong vendoror carrying out delivery tasks without sufficient resources.

To resolve these issues, organizations should implement best logisticmanagement practices. Companies should focus on collaboration ratherthan competition. Good collaboration among transportation providers,buyers and vendors helps reduce expenses. Also, an efficient and safetransportation provider is vital to business success.


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4. THE FUNCTIONALCOMPONENTS OFLOGISTICS MANAGEMENT

AND THEIR FEATURES


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The functional components of logisticsmanagement and their features

Stocks logistics

Transport logistics

Procurement logistics

Sales (distribution) logistics Logistics of production processes

Logistics of warehousing

Information logistics


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Stocks logistics

Stocks logistics is provided through inventory management system. Animportant aspect of the logistics system functioning is to support the amount

of inventories at a level, which helps to ensure uninterrupted supply ofnecessary material resources to all departments with compliance withrequirements of the economy of process of moving of the material flow. Thesolution to this problem is achieved by means of forming inventorymanagement system.


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Stocks logistics

Inventory management system is a set of rules and parameters that define

the time and volume of purchases of products for restocking. In logistics, thefollowing basic inventory management system are used:1. The inventory management system with fixed size of the order.2. Inventory management system with fixed frequency of order.3. The system with fixed periodicity of restocking to a set level.4. The "minimum - maximum" system.


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Transport logistics

The tasks of transport logistics includes the following functions: selecting of transport for transportation of goods (freight) according to theicommodity characteristics;

selecting the type of vehicle; determining the optimal route; selecting of transport carrier; combined planning of transport processes at different modes of transport(in case of multimodal transport) with specific commercial enterprises; providing technological unity of transport and trade processes; combined planning of the transport process with stock and trade processe


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Transport logistics

Transportation tasks are solved by linear programming through the followingparameters:

minimizing the cost of transportation of goods from points of production topoints of trade;

minimizing the length of the route during transportation from one supplier toseveral customers (circular transportation of goods between trading units);

minimizing timing of transportation of goods from points of production topoints of trade.


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Procurement logistics is a material flows management in the process ofproviding material resources to enterprise; material flows management at the

stage of entering of products to the logistics system of enterprise, which iscarried out through subsystem procurement.

Any company, which processes material flows, is composed of service thatmakes the purchase, delivery and temporary storing of items of work (supplyservice), raw materials, semi-finished products, consumer goods.


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Key questions, which should be answeredin the process of providing the enterprisewith items of work, are traditional andidentified by logic of supply:

what should be purchased;

how it should be purchased;

where it should be purchased;

on what terms it should be purchased.

Logistics adds its own questionstraditional list of questions:

how systematically to linkprocurement with productiosales;

how systematically to link theof the company with supplie


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Distribution (sales) logistics

Distribution logistics is an integral part of the logistics

system, which provides the most effective organization ofthe distribution of manufactured products, covering theentire chain of distribution systems: transportation,warehousing, packaging, distribution between tradingunits.


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Production logistics

The production logistics covers the functional area of direct production as themanufacturing process, i.e. processes from the beginning of the productionprocess to moving of finished product to the subsystem in the logistics

distribution and marketing including transportation of raw materials,components, etc., and industrial storage.

Production logistics aims to providing timely and comprehensive supply ofproducts under the contracts, to the organization of uninterruptedtechnological process in accordance with orders and with minimizing totalcosts of work in progress and production costs in general.


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Production logistics

We can distinguish three levels of objectives, which helps to create optimal logistics

production system:

The task of the first level is minimizing production costs, ensuring an uninterrupted

loading of workers and workplaces and uninterrupted moving of items of work in

production. The objectives of the second level are the improving the organization of production

processes, implementation of basic principles of production organization.

The tasks of the third level is to guarantee of efficiency of the production system in a

given range of qualitative and quantitative indicators, to provide a full cycle of

management in its interconnections, i.e. providing of forecasting, valuation,

planning, organization, accounting, control, analysis, coordination, regulation,

promotion.


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Warehouse logistics covers all major functional areas

related to the organization of movement of material flowsat the micro level. Therefore logistics process inwarehouses is much broader than just the technologicalprocess of freight processing.


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Conventionally logistics process in warehouses can be divided into three components:

1. operations aimed at coordination of work with procurement service;

2. operations directly related to cargo handling and clearance of documents

(unloading, inner warehouse transportation, warehousing, kitting of orders,

transportation and forwarding of orders, collection and delivery of empty goods

mediums, informational service of warehouse);

3. operations aimed at coordination of work with sales service.


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Information logistics

Information logistics organizes data flow, which accompanies the material flow and it i

an essential element for the enterprise, which connects the supply, production and

sales.

The main objective of informational logistics is to create optimal logistics informationsystems and their practical implementation with taking into account the characteristic

of the supply, production and distribution of specifically identified companies by using

modeling techniques.

It is important for commercial enterprise to have information for forecasting inventory

levels, because increasing of inventory amount leads to increasing of costs on storage

of goods.


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5. LOGISTICS AUTOMATION


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Logistics automation is the application of computersoftware and/or automated machinery to improve the

efficiency of logistics operations. Typically this refers tooperations within a warehouse or distribution center, withbroader tasks undertaken by supply chain managementsystems and enterprise resource planning systems.


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Hardware and software components oflogistics automation systems

Fixed machinery Automated cranes (also called automated storage and retrieval systems): prov

ability to input and store a container of goods for later retrieval.

Conveyors: automated conveyors allow the input of containers in one area of t

warehouse, and either through hard coded rules or data input allow destinatio

The container will later appear at the selected destination.

Sortation, or sorting systems: similar to conveyors but typically have higher capa

divert containers more quickly. Typically used to distribute high volumes of smal

large set of locations.

Industrial robots: four to six axis industrial robots are used for packaging, commis

order picking etc..

Typically all of these will automatically identify and track containers based upo

or increasingly, RFID tags

AS/RSAutomated Storage and Retrieval Systems.


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Hardware and software components oflogistics automation systems

Motion check weighers.

Mobile technology

Radio data terminals: these are hand held or truck mounted terminals which co

wireless to logistics automation software and provide instructions to operators m

throughout the warehouse.

Software

Integration software: this provides overall control of the automation machinery.

Operational control software: provides low-level decision making.

Business Control software: provides higher level functionality.


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Benefits of logistics automation

A logistics automation system may provide the following:

Automated goods in processes

Automated Goods Retrieval for Orders: On receipt of orders, the automation

system is able to immediately locate goods

Automated dispatch processing: Combining knowledge of all orders placed at

the warehouse the automation system can assign picked goods into dispatch

units and then into outbound loads. Sortation systems and conveyors can then

move these onto the outgoing trailers

If needed, repackaging to ensure proper protection for further distribution or to

change the package format for specific retailers/customers.


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Thank you for attention!

basic concepts and tasks of logistics in enterprise

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