LOGISTICAL OPERATIONS INTEGRATION

1
LOGISTICAL OPERATIONS INTEGRATION

• When LM is highly integrated and positioned as a
  core competency, it can serve as a standpoint for
  gaining a competitive advantage.
• To plan and achieve logistical integration
  understanding the work of logistics, the
  operational integration, the operating
  objectives, basic unit of analysis

2
THE WORK OF LOGISTICS

• Coordinating network design to determine the
  number and location of all types of facilities
  required to perform logistics works as well as
  the inventory policy.
• The network of facilities
• The number and type of facilities that
  incorporate information and transportation
  capabilities.
• Geographical variations complexity degree.
• Selection criteria changes in the external
  environment, products, manufacturing
  requirements.

3

• The Importance of Information
• Forecasting and Order Management Department.
• Future issues forecasting accuracy, trends and
  events.
• Customers requirements.
• Speed procedures, the use of EDI, controlling
  to replace the inaccurate forecasting with faster
  response to customer requirements.
• The combination of forecasting and controlling
  JIT, QR and CR approaches.
• More efficient more sensitive to inaccuracies.

4

• Transportation
• Private fleet of equipment, subcontracting, using
  common carriers.
• Fundamental factors speed, cost and
  consistency.
• Inventory
• Availability vs cost plus risk to achieve
  maximum turnover while satisfying customer
  commitments.
• Inventory management policy is based on five
  aspects of selective deployment customer
  segmentation, product requirement, transport
  integration, time-based requirement and
  competitive performance.

5

• Confronting a wide range of transaction and
  customer profitability purchased products,
  volume, price, value-added services and
  supporting activities.
• Intending to support core customers (high
  profitability).
• Different strategies are applied to inventories
  in regard to availability and consistent delivery
  compared to the profitability of the products.
• High level of support for less profitable items.
• Type of transportation and facilities.

6

• Warehousing, material handling and packaging
• Loading/unloading, selecting the best location,
  the availability of labor

7
INTEGRATED LOGISTICS

• Inventory flow and information flow.
• Procurement.
• Manufacturing support.
• Physical distribution.
• Planning and coordinating flow strategy,
  capacity constraints, logistical requirements,
  inventory deployment, manufacturing requirements,
  procurement requirements and forecasting.

8
OPERATING OBJECTIVES

• Rapid response.
• Minimum variance of unexpected event disruption
  in manufacturing, goods arriving damaged,
  incorrect delivery destination, etc.
• Minimum inventory.
• Movement consolidation the larger the overall
  shipment and the longer the distance transported,
  the lower transportation cost per unit.
• Quality.
• Life-cycle support after sales support and
  guarantee, recycled packaging materials.

9
BARRIERS TO INTEGRATION

• Organization structure.
• Measurement system
• Inventory ownership
• Information technology
• Knowledge transfer capability