Prof. Anatoly Sachenko -Kontakt

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Prof. Anatoly Sachenko -Kontakt

• Zaklad Informatyki i Ekonometrii
• Budynek A, pokój 414
• Instytut Ekonomii i Informatyki
• Wydzial Organizacji i Zarzadzania
• http//dydaktyka.polsl.pl/roz6/asachenko/default.a
  spx
• sachenkoa_at_yahoo.com or
• a_sachenko_at_ieee.org

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Informatics in Logistics Management
Lecturer Prof. Anatoly Sachenko
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Lecture Overview

• Definition and Origins
• System Approach
• Logistics Management
• Logistics Perspective

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Definition of Logistics

• Logistics - Planning implementing and
  controlling the physical flow of material and
  finished goods from point of origin to point of
  use to meet customers need at a profit Philip
  Kotler
• Logistics is the management of the flow of goods
  between the point of origin and the point of
  destination in order to meet the requirements of
  customers or corporations.
• Logistics involves the integration of
  information, transportation, inventory,
  warehousing, material handling, and packaging,
  and often security
• Logistics is one of the main functions within a
  company

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Origin of Logistics

• The term logistics comes from the Greek logos
  (?????), meaning "speech, reason, ratio,
  rationality, language, phrase", and
• more specifically from the Greek word logistiki
  (????st???), meaning accounting and financial
  organization
• The word logistics has its origin in the French
  verb loger to lodge or to quarter
• Its original use was to describe the science of
  movement, supplying maintenance of military
  forces in the field
• Later on it was used to describe the management
  of materials flow through an organization

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Main Logistics Targets and Fields

• Its main targets are 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
• Its making a logistician challenging and
  interesting
• Main Logistics fields
• Procurement Logistics
• Production Logistics
• Distribution Logistics
• After sales Logistics
• Disposal Logistics

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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

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Scope of Logistic

• It is a critical importance for organization how
  it delivers tangible or intangible products
  services to the customer
• Effective physical movement of the tangible
  product will speak of intangible services
  associated with the product and the delivered
  organization
• In Case of intangible product, the delivery of
  tangibles at the right place right time will
  speak about its quality
• On the macro level infrastructure its
  contributing to a large extent in the physical
  movement of produced goods

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Scope of Logistic

• This speed reliability in distribution of
  products services contribute to a great extent
  in the growth of a countrys domestic
  international trade
• Logistic cost as a percentage of GDP across the
  world is shown in the following table
• Country Logistic cost as a percentage of GDP
• Korea 16
• China 15
• Japan 14
• India 13
• France 12
• UK 11
• USA 10

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Logistics A system approach

• Logistics recognizes that all the activities of
  material movement across the business process are
  interdependent and needs close coordination and
  these are to be maintained as a system
• Logistics System is an adaptive system including
  following functional Areas
• Order Processing
• Information Flow
• Warehousing
• Inventory control
• Packaging
• Transportation

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Order Processing

• Order checking for any deviation in agreed on
  negotiated term
• Technical details price delivery period
  payment terms taxes etc.
• Checking the availability of material in stock
  (material requisition)
• Production material scheduling for shortage.
• Acknowledging the order, indicating deviation if
  any
• It is routine operation but require great deal of
  planning training of people involved and
  investment to bring about efficiency accuracy

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Information Flow

• It is basically info based activity of inventory
  movement across the supply chain
• Hence role of info system plays a vital role in
  delivering superior customer service
• This function is required to facilitate the
  following info needs
• Order registration
• Order checking editing
• Order processing
• Coordination - means to integrate the total
  supply chain of the company with info needs as to
  time, quantity, value

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Warehousing

• A storage place wherein finished goods are stored
  till they are sold.
• Effectiveness of an organizations marketing
  strategy depends on making the right decision
  regarding warehouse
• Warehouse are treated as switching facilities
  rather than storage place
• Major decision of warehouse are as follows
• Location ,Size Number of warehousing
  facilities
• Warehouse layout
• Design of building
• Ownership of the warehouse

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Modern Warehouse
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Packaging

• It is also a critical element in physical
  distribution of the product,
• which influences the efficiency of the logistic
  system this is done with the view of following
• For handling and damage prevention
• For communications
• For inter modal transportation
• Storage space economy
• Thus to reduce packaging cost

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Transportation

• For goods movement of a transportation is the
  most fundamental and important component of
  logistic
• E.g. for low unit value products the
  transportation cost component is 20 of the
  product cost
• In logistic cost its share varies up to 65-70
• There are the few decision involved in
  transportation
• Mode of transportation ( Cost time factor)
• Own fleet or Outsourcing
• Route Planning
• Vehicle scheduling

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Logistics Management

• Logistics Management is that part of Supply Chain
  Management
• that plans, implements, and controls the
  efficient, effective, forward, and reverse flow
  and storage of goods, services, and
• related information between the point of origin
  and the point of consumption
• in order to meet customers requirements
• From a traditional point of a view a goal of any
  firm is to produce competitive products and
  increase its volume
• In this case management can boil down to a
  General Manager minor staff-see next slide

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Logistics Management Traditional Structure
Persons Decision Making Process (Chief Manager)
Supplier
Production
Customer
Material flow
Information flow
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Logistics Management Traditional Structure

• Both terms Flaw and Inventory are the main
  categories of Logistics
• In Logistics Management are diffeation Flows- see
  previous and next slides
• Material Flow red the Material and Informis the
  description of the transportation of raw
  materials, pre-fabricates, parts, components,
  integrated objects and finally products as a flow
  of entities
• Logistics operations with Information Flow
  include acquisition, storing, processing and
  transfer of info
• In next slide is shown a contemporary
  structure of Logistics Management

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Logistics Management Contemporary Structure
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Logistics' perspective Three Forces?

• Three Forces which have change the perspective of
  logistics
• Globalization
• Focus on Supply Chain Management
• Outsourcing of Non Core Competency Functional Area

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Globalization

• The entire world has become a global village for
  marketers because of the liberalization of
  economics of most countries, and
• the emergence of World Trade Organization which
  is forcing business organizations to supply
  products beyond the national boundaries wherever
  there is a market opportunity
• However in such conditions the role of LOGISTICS
  will be
• to provide time and place time and place utility
  of the product to the customer

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Focus on Supply Chain Management

• Business the world over are striving for
  competitiveness
• In their struggle for survival their focus has
  shifted to the supply chain i.e.
• Integrating the process of Procurement ,
  processing distributing to deliver value for
  money to the customer
• Two key roles logistics planning support are
• Value delivery process
• Success of Supply Chain Management

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Outsourcing of Non Core Competency Functional Area

• Outsourcing is a acceptable trend in business
• Corporation have realized that doing everything
  by themselves does not result in effective
  efficient use of scare resources available to
  them
• It is better to outsource functional area to
  experts who can do job at the lowest cost and
  that to efficiently Effectively
• LOGISTICS is one such area where most of business
  org. do not have enough expertise thus needs to
  be outsourced
• Thus Logistics have shaped into different service
  industry offering complete customized
  logistics solutions