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The evolution and role of Logistics in Business. Chapter 1. International Logistics. The process of planning, implementing and controlling the flow and storage of goods, services and related information from a point of origin to a point of consumption located in a different country. Evolution .
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International Logistics • The process of planning, implementing and controlling the flow and storage of goods, services and related information from a point of origin to a point of consumption located in a different country
Evolution Materials Management Logistics (1990) Supply Chain(2000) Physical Distribution
Role of logistics in business • Logistics adds value to facilitate sales • Logistics expenditure range from 5% to 35% of sales • Firms are interested in achieving logistical competency to gain competitive advantage
Activity centers in Logistics • Transportation (inbound/outbound) • Warehousing • Inventory • Unitization(packaging and packing) • Material handling • Communications
The entire activity can be divided into • Inventory flow (material based) • Information flow ( electronic based)
Characteristics of an organization with effective logistical competency • Alternative logistical capabilities • Flexibility according to the need and demand • Time based performance • Operational control • Postponement capabilities • Commitment to perfect service
Logistical service is measured in terms of • Availability • Operational capability and performance • Service reliabilty
Costs involved in the logistics operation of a firm • Costs of planning and managing the logistics system • Transportation of supplies to the plant • Transportation of finished goods throughout the distribution system • Receiving, inspecting and putting supplies in the storage • Maintaining inventories • Processing customers orders • Packaging • Maintaining warehouses • Providing customer service
Value measures • Ability to meet quoted delivery date • Prompt and comprehensible quotation • Provision of technical advice for problem solving • Discount structure on list prices • Technical after sales service • Easy of contact with person in authority • Replacement guarantee • Wide range of services • Extended credit facilities • Order cycle time • Order accuracy • Order completeness • Order condition