Logistics Management

Location Analysis in Logistics Management

Plant and distribution center location is a common problem faced by logistics managers. Increased production economics of scale and reduced transportation cost have focused attention on distribution centers. In recent years, location analysis has been further extended to include logistics channel design as a result of global sourcing and marketing decisions. Global operations increase logistics channel decision complexity, design alternatives and related logistics cost.

Location Decisions

Location decision stage of location analysis in logistics management,  focus on selecting the number and location of distribution centers. Typical management questions:-

  1. How many distribution centers should the firm use and where should they be located?
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Logistical Organization and Development

Prior to the 1950s,functions now accepted as logistics were generally viewed as facilitating or support work. Organizational responsibility for logistics was dispersed throughout the firm. This fragmentation often meant that aspects of logistical work were performed without cross-functional coordination, often resulting in duplication and waste information was frequently distorted or delayed and lines of authority and responsibility were typically blurred. Managers recognizing the need for total cost control began to reorganize and combine logistics functions into a single managerial group. Structuring logistics as an integrated organization first appeared in the 1950s.

The motivation behind functional aggregation was the belief that grouping logistics functions into a single organization would increase the likelihood of integration.… Read the rest

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Distribution Requirement Planning (DRP)

Distribution Requirement  Planning (DRP)  is a more sophisticated approach that considers multiple distribution stages and the characteristics of each stage. It is a logical extension of Material Requirements Planning (MRP), although there is one fundamental difference between the two.

  • MRP is determined by a production schedule that is defined and controlled by the enterprise. On the other hand, DRP is guided by customer demand, which is not controllable by the enterprise.
  • So, while MRP generally operates in a dependent demand situation, DRP operates in an independent environment where uncertain customer demand determines inventory requirements. The manufacturing requirements planning component coordinates the scheduling and integration of materials into finished goods.
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Planning the Inventory Resources in Logistics

Planning is extremely important when it comes to inventory resources. The lack of planning can be costly to the firm either because of the carrying and financing costs of excess inventory or the lost sales from inadequate inventory. The inventory requirements to support production and marketing should be incorporated into the firm’s planning process in an orderly fashion.

  • The production side: Every product is made up of a specified list of components. The planner must realize the different mix of components in each finished product. Each item maintained in inventory will have a cost. This cost may be based on volume purchases, lead time for an order, historical agreements or other factors.
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Logistics Planning Process

To match the changing environment in the logistics due to the changes in the markets, competitors, suppliers and technology, there is a need for a systematic planning and design methodology to formally include the relevant consideration and effectively evaluate the alternatives.

Read More: The Concept of Logistics Planning

The logistics relational and operating environment is constantly changing. Even for the established industries, a firm’s markets, demands, costs and service requirements change rapidly in response to the customer and competitive behavior. Just as no ideal logistical system is suitable for all enterprises the method for identifying and evaluating alternative logistics strategies can vary extensively.… Read the rest

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Factors Affecting Transportation in Logistics

Whether the movement of material and equipment is by rail, sea, air or road, adequate facilities for their free flow to and from the factory must be ensured. The factors which affect progress at the construction stage, and production and dispatches after commission, have been discussed below:

1.  Terminal Facilities

Terminal facilities are usually grudgingly provided. One reason for this is that any delay or any in convenience caused to truck operators is not a loss to the project. It is treated as a loss to the carrier. In some cases, this may be true. However, this usual incidence of stoppage or regulation of the production process can be minimized, if not eliminated.… Read the rest

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