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LOGISTICAL OPERATIONS INTEGRATION

Understanding the work of logistics, operational integration, and operating objectives to enhance efficiency and customer satisfaction. Learn about transportation, inventory management, and warehouse operations.

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LOGISTICAL OPERATIONS INTEGRATION

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  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

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