Logistics comprises of relatively large number of managerial activities. Discuss five of these activities and why they are important of the logistics system. Logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements Logistics is responsible for the movement and storage of materials as they move through the supply chain.
Depending on the circumstances, many other activities can be included in logistics. Sometimes an organization might include sales forecasting, production scheduling, customer service management, overseas liaison, third party operations, and so on. If you follow some materials moving through an organization, you can see that the following activities are normally included in logistics Procurement / purchasing: The flow of materials through an organization is usually initiated when procurement sends a purchase order to a supplier.
This means that procurement finds suitable suppliers, negotiates terms and conditions, organizes delivery, arranges insurance and payment, and does everything needed to get materials into the organization. In the past, this has been seen as a largely clerical job centered on order processing. Now it is recognized as an important link with upstream activities, and is being given more attention. Warehousing: moves materials into storage, and takes care of them until they are needed.
Many materials need special care, such as frozen food, drugs, alcohol in bond, chemicals that emit fumes, animals, and dangerous goods. As well as making sure that materials can be available quickly when needed, warehousing also makes sure that they have the right conditions, treatment and packaging to keep them in good condition Materials handling moves materials through the operations within an organization.
It moves materials from one operation to the next, and also moves materials picked from stores to the point where they are needed. The aim of materials handling is to give efficient movements, with short journeys, using appropriate equipment, with little damage, and using special packaging and handling where needed. Inventory control: It considers the materials to store, overall investment, customer service, stock levels, order sizes, order timing and so on. Location: Some of the logistics activities can be done in different locations.
Stocks of finished goods, for example, can be held at the end of production, moved to nearby warehouses, put into stores nearer to customers, passed on to be managed by other organizations, or a range of alternatives. Logistics has to find the best locations for these activities – or at least play a significant role in the decisions. It also considers related questions about the size and number of facilities. These are important decisions that affect the overall design of the supply chain