Professional Documents
Culture Documents
Definition of Logistics
European Logistics Association (ELA):
The planning, execution and control of the movements and placement of people and/or goods, and the supporting activities related to such movement and placement within a system organized to achieve specific objectives.
Business Logistics
Logistica Industriale
Logistics systems
A logistics system is made up of a set of facilities (nodes) linked by transport services (links) and information systems. Facilities are sites where materials are processed, e.g. manufactured, stored, sorted, sold or consumed.
A logistics system
Supplier
Manufacturing plant Assembly plant RDC CDC
Retail outlets
Port
Port
Retailer
Significance of logistics
Logistics is one of the most important activities in modern societies.
It has been estimated that the total logistics cost incurred by USA organizations in 2006 was 1,305 $ billion, corresponding to approximately 9,9 % of the USA Gross Domestic Product (GDP).
93
252
Warehousing
Subtotal
101
446
Subtotal
Other Carriers Railroads Water Oil Pipelines Air Forwarders Subtotal Total
1996
1998
2000
2002
2004
2006
Inventory as % of GDP
Year
Types of Utility
Form utility is the process of creating the good or service, or putting it in the proper form for the customer to use. Possession utility is the value added to a item or service because the customer is able to take actual possession made possible by credit arrangements, loans and so on.
Marketing
Place/customer service level
Logistica
Il marketing massimizza i profitti aziendali
Promotion
Logistics Costs
Luogo/livello di servizio cliente Place/customer service level Materiale inventariato Inventory carrying costs
Trasporto Transport
Magazzino Wharehouse
The relevant inventory costs are those that vary with the amount
Capital cost, or opportunity cost, the return that the company could make on the money that it has tied up in inventory Inventory service cost, insurance and taxes warehousing space related costs inventory risk cost, obsolescence, pilferage, relocation within the inventory system, and damage
Questions (1)
1. What is the role and importance of logistics in private and public organizations? 2. Discuss the impact of logistics on the economy and how effective logistics management contributes to the vitality of the economy. 3. What is the value-added roles of logistics on both a macro and micro level? 4. Explain logistics systems from several perspectives. 5. What is the relationship between logistics and other important functional areas in an organization, including manufacturing, marketing, and finance?
Questions (2)
6. Discuss the importance of management activities in the logistics function. 7. Analyze logistics systems from several different perspectives to meet different objectives. 8. Determine the total costs and understand the cost tradeoffs in a logistics system. 9. Why does a push-based supply chain react more slowly to changing demand than a pull-based system? 10. What is the impact of product diversification (the increase in the number of product variants) on logistics systems planning and control.