Page 155 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes 1. A military concept
2. Fighting a war requires:
Setting an objective

Meticulous planning to achieve the objective
Proper deployment of troops
Supply lines consisting of weaponry, food, etc.
3. A logistics plan should be such that there is minimum loss of men and material.
Similar to fighting a war in battlefield, marketing managers also prepare a suitable logistics
plan that is capable of fulfilling the company objective of meeting the demand of targeted
customers in a profitable way.

Notes Inbound logistics + Material Management + Physical Distribution = Logistics

1. Inbound logistics means the movement of materials received from suppliers.
2. Material management means the movement of material and components inside a firm.
3. Physical distribution refers to movement of goods outward from the end of the assembly
line to the customer.
4. Supply chain management is larger than logistics and it links logistics more directly
within the user’s total communication network and with the firm engineering staff. It not
only includes manufacturer and suppliers but also transporters, warehouses, retailers and
customers themselves.
5. According to Council of Logistics Management: “Logistics is the process of planning,
implementing and controlling the efficient, effective flow and storage of goods, services
and related information from the point of origin to the point of consumption for the
purpose of conforming the customer requirement”.
Logistics management includes the design and administration of systems to control the flow of
material, work-in-process, and finished inventory to support business unit strategy.

7.2 Planning Physical Distribution

The main goals of Distribution in any Organization would be to take care of proper storage and
transport. While Storage assures product and packaging quality and constant availability,
Transportation’s objective is to ascertain that products arrive in good condition, in the right
place and at the right time. The less frequent a Firm’s re-supply, the greater would be its storage
requirements.

7.2.1 Distribution Considerations

For proper Storage & Transportation, the SC Manager has to ensure availability of transportation
(i.e., vehicles). He or she has to also take care of security the materials are being transported
from one point to another. Security during storage also needs proper attention. What is also
important is the availability sufficient storage space/capacity. This shall be based on procurement
plan and frequency of deliveries at all levels of the system.

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