LOGISTIC:

Logistics is the management of the flow of resources, between the point of origin and the point of destination in order to meet some requirements, i.e. of customers or corporations. The resources managed in logistics can include physical items as food, materials, equipment, liquids and staff as well as abstract items as information, particles and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing and oftentimes security. Furthermore the complexity of logistics can be modeled, analyzed, visualized and optimized by dedicated simulation software.

Main logistics targets

Logistics is one of the main functions within a company. The main targets of logistics can be divided into performance related and cost related. They are high due date reliability, short delivery times, low inventory level and high capacity utilization. But when decisions need to be made, there is always a trade off between these targets.

Logistics viewpoints
Inbound logistics is one of the primary processes and it concentrates on purchasing and arranging inbound movement of materials, parts and/or finished inventory from suppliers to manufacturing or assembly plants, warehouses or retail stores. Outbound logistics is the process related to the storage and movement of the final product and the related information flows from the end of the production line to the end user.

Logistics fields
Given the services performed by logisticians, the main fields of logistics can be broken down as follows: Procurement Logistics Production Logistics Distribution Logistics After sales Logistics Disposal Logistics

Procurement Logistics consists of activities such as market research, requirements planning, make or buy decisions, supplier management, ordering, and order controlling. The targets in procurement logistics might be contradictory - maximize the efficiency by concentrating on core competences, outsourcing while maintaining the autonomy of the company, and minimization of procurement costs while maximizing the security within the supply process. Production Logistics connects procurement to distribution logistics. The main function of production logistics is to use the available production capacities to produce the products needed in distribution logistics. Production logistics activities are related to organizational concepts, layout planning, production planning, and control.

Distribution Logistics has, as main tasks, the delivery of the finished products to the customer. It consists of order processing, warehousing, and transportation. Distribution logistics is necessary because the time, place, and quantity of production differs with the time, place, and quantity of consumption. Disposal Logistics' main function is to reduce logistics cost(s), enhance service(s), related to the disposal of waste produced during the operation of a business.

Business logistics

A logistics provider's warehouse of goods being stacked on pallets with a forklift.

Logistics as a business concept evolved in the 1950s due to the increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain, leading to a call for experts called supply chain logisticians. Business logistics can be defined as "having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer", and is the science of process and incorporates all industry sectors. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization. There are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport links and storage nodes; the other coordinates a sequence of resources to carry out some project.

Production logistics
The term production logistics is used to describe logistic processes within an industry. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right time. The concern is not the transportation itself, but to streamline and control the flow through value-adding processes and eliminate nonvalue-adding ones. Production logistics can be applied to existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the

opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency. Production logistics is becoming more important with decreasing batch sizes. In many industries (e.g. mobile phones), a batch size of one is the short-term aim, allowing even a single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logisticsdue to product safety and product reliability issuesis also gaining importance, especially in the automotive and medical industries.

SCM:

Figure 1. General supply chain model. Figure 1 depicts the entire supply chain, including manufacturers and distributors. The first thing to note is that many types of manufacturing and distribution models can be developed because of the generality of the model. As well, there can be as little as two parties involved in the supply chain, or many different manufacturing and distribution partners located in different countries. Multiple networks can be involved to develop and deliver final goods to their destination, be it to retail locations, business locations, or a hybrid of both, or goods can also be procured from the Internet or telephone order. In figure 1, there are six main paths. Path (1) and Path (6) are the simplest of the paths in the diagram. Path (1) indicates a simple wholesale distribution model, where goods are sourced from one or just a few different providers, and are sent directly to one or many retail locations. Path (6), on the other hand, is what is known as reverse logistics. Reverse logistics is the act of moving goods from their final destination back to the original manufacturer because there is a problem of some kind with the product. Even though it is indicated as a line directed back to Original Supplier(s), reverse logistics can be a very complex process, especially if it involves moving products back through multiple countries, and tracking and accounting for these items tends to be complicated. Paths (2) to (5) show the combination of manufacturing a good and distributing it to either a final DC or to another manufacturer for additional assembly or further manufacturing purposes. All of these paths end at a Final Destination even though hundreds of parties can be involved in the manufacturing and distribution of the goods.

Components of SCM Software

In a typical SCM solution, software modules included are a warehouse management system (WMS), transportation management system (TMS), supplier relationship management (SRM), international trade logistics (ITL), procurement, demand management (DM), supply chain analytics, order management, and service parts planning. At the heart of an SCM solution lies both the WMS and the TMS applications. The WMS solution deals with the inventory that is to be moved throughout the supply chain. For inventory movement within the warehouse to be efficient, the process must be optimized through visibility of the products. Visibility is usually enabled by radio frequency identification (RFID) technology. The TMS software is one of the key components to the supply chain. This software manages the scheduling of all transport modes used to move products from one location to another, in addition to finding the best routes to take and determining which products are best transported by what type of transportation (that is, truck, rail, sea, or plane). TMS software also allows individuals within the transportation network, such as drivers or managers, to log in to a transportation portal to communicate directly and make updates in real time. The ITL module within the SCM suite handles the details for international trade. Collaboration between countries, compliance issues, tariffs and taxes, event management, shipment tracking, and import and export management are all dealt with by giving many people across the supply chain access and visibility into the issues that can occur at any node within the supply chain, and not only into the products themselves in the international context. SRM software enables suppliers and delivery site individuals to access supplier portals for the following two reasons: 1) to facilitate communication among these parties and to update them on any problems the supplier may be experiencing at its end, and 2) to allow managers to use scorecards to rate suppliers as good, average, or poor. For example, if a supplier is not complying with standards or is not respecting delivery times, or if the suppliers goods are simply not available, the supplier will be given a poor rating. If the supplier receives too many poor ratings or if the problems continue to occur, the supplier can be justifiably replaced by a new one. DM software gives both manufacturers and distributors the ability to forecast and manage the demand for particular products sold within their respective markets. DM software takes historical sales and warehouse data, and provides a guideline to what should be procured and at what time, taking into account seasonal variability. This helps in the planning of what is needed to be produced and how much of each material is to be procured. DM software can also help manufacturers obtain particular components from different sources to produce complex products within appropriate timelines. The software may also take data from the human resources (HR) application to schedule laborers according to production demand. For more information on DM, please see Attribute-based Demand Planning: A Powerful Tool for Process Manufacturers. Supply chain analytics is a tool that allows managers and others involved in decision-making processes the ability to create what-if scenarios, enabling work-around scenarios to be put into place before incidents occur. This also enables production and supply chain planning to be optimized. Finally, order management and service parts planning are modules that would typically be areas of manufacturing, yet they are geared toward supply chain manufacturing, allowing for true lean manufacturing.