Page 33 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

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”.

Notes 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.

2.1.1 Concept of Logistics

Logistics is that part of the supply chain process that plans, implements and controls the effective
forward and reverse flow and storage of goods, services, and related information between the
point of origin and the point of consumption, in order to meet the customer’s requirements.

Logistics Activities

1. Customers service

2. Demand forecasting
3. Distribution communication
4. Inventory control

5. Material handling
6. Order processing
7. Part and service support
8. Plant and warehouse side selection
9. Procurement

10. Packaging
11. Return goods handling
12. Salvage and scrap disposal

13. Traffic and transportation
14. Warehousing and storage

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