Page 194 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 10: Logistics and Distribution

While placing an order with the supplier, one should make sure that he has included desired Notes
date, time and routing of the required transportation service and has mentioned about required
storage conditions of the merchandise.

Production/Corporate Logistics

To cater to growing market needs, the company needs to establish a new production system for
logistics as well as modified production systems to accomplish the true ’real time sales’ system.
For this, a new revolutionary production project team should be formed whose sole purpose is
to establish a ’production, sales and logistics total linkage system’ that will eventually eliminate
overstock and shortage problems. This kind of a production system is called Market Linkage
Production System (MLPS). The benefits of using the MLPS are illustrated in the following
figure.
Figure 10.2: Benefits of using the MLPS

Current Scenario Modified Scenario After MLPS Application

1. The time period spend on establishing sales and 1. In order to produce and supply the actual market
production plans is too long. The longer it gets, the demand, it is very crucial to establish a logistic system
accuracy of such plans is reduced. In a constantly closely linked with the market trends. It is imperative to
changing market, it is inevitable to adjust or modify plans. develop the information that will enable the
2. Too many departments are involved in approving a production/supply system to cope with market variations.
’production/supply plan’. These departments are the sales, MLPS consists of ’Replenishment Production System’.
This supports the production and the ’Purchase Support
the product marketing, the product management and
purchasing departments. Such successive operations from System’, which aids the ordering of parts and materials as
one department to another require a long period of time sub-system.
and also there is no consistency in transferring of all 2. The task force team should execute all project
information. operations. The corporate logistics management
3. There is a low level of utilization of information systems department supports directing each phase of operation
in formulating all plans. All the necessary data from and developing and designing of the system. The task
production and purchase plans are not generated by the force team should be led by the Logistics Management
information systems but are maintained manually. Real Department’s Logistics Information System (LIS) team
time sale system cannot be achieved under current leader and should consist of members from various
system, due to rapid changes of various production plans departments, such as production, logistics, purchasing,
within a company as well as within other companies such corporate logistics management and information systems.
as suppliers or vendors. 3. All team members should follow their role in executing
their top responsibilities.

Customer Logistics

Customer logistic involves a seven ’R’ framework namely, it should be a process of right quantity
of the right product or service to the right place in the right conditions at the right cost and at the right
time with the right impression. If these seven aspects are taken care of, customer logistics process
will be able to create higher levels of customer satisfaction. It will also show that the company
is concerned about the customers and their logistics requirements. The focus of customer logistics
should be on speedy and timely delivery, shorter lead time, safety of goods and users and
lowering of distribution costs. The objective of this process should be to achieve on time delivery
and realize higher customer satisfaction by implementing a flexible and swift customer logistics
system.

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