UNIT I (3) ORGANIZATION STRUCTURE

1. What is re-engineering
Re-engineering means Recreating the organisation and systems rather than making minor
changes. In a traditional organization, logistics functions were scattered throughout the
organisation with no single department responsible for it. The trend is now towards
Integrating Logistics Functions, thereby increasing the opportunities to reduce the cost out of
supply chain than out of manufacturing by avoiding duplication of efforts and reducing
inefficiency of the traditional approach. Logistics management can provide value for
customers through serving them Better, Faster and Cheaper
2. Responsive Organisation
The competitive situations have compelled the organisations to posses the need to be
responsive. A responsive organisation puts the customer at the centre of business and
designs all its systems and procedures to improve the speed of response and reliability of the
response. Core objective of a responsive organisation are as follows:
a.
b.
c.
d.
e.

Emphasis on Management of processed by creating outputs

Performance linked profitability
Emphasis on customer value and not brand value
Predict demand based on actual consumption data received
Long term relationship with customers and suppliers

3. Matrix Organisations

During the 1950s, some large organisations realised that the divisional organization
structure was not working well since it did not link people in various divisional and
corporate position thereby the synergy of being part of a large corporation were lost
To combat this problems, organisations implemented the matrix organisation with was
overlaying the divisional organisational structure
A matrix organisation is the one where functional leaders are responsible for more
than one area. Employees report to their immediate manager and cross function
leader. This type of an organisation when represented on a diagram is in the form of a
Matrix Square
Matrix Management differentiates between Solid Line Manager and Dotted Line
Manage
The Solid Line Manager is typically the functional manager and will not change. Eg. In
the purchasing, the solid line manager is the purchasing manager. The solid line
manager handles day to day issues such as vacation requests and even delivers
performance appraisals
The dotted line manager may be a project manager who will coordinate different
departments involved in a particular project. Employees report to such a manager
only with regard to information pertaining to such a project

4. Barriers in forming Effective Logistics Organisation (TECH)

i) Training and educating employees
ii) Establishing employee ownership
iii) Changing corporate culture
iv) Changing management processes
v) Having a common vision
5. Improving Logistics Organisation Effectiveness (SCORE)
i) Strategic Goal Setting
ii) Communication process
iii) Organisational adaption and innovation
iv) Resources
v) Environmental conditions