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Unit 2: Introduction to Logistic

Few areas of business involve the complexity or span the geography typical of logistics. Logistics Notes
is core, they expect products to be available and be fresh. It is rather difficult to visualize any
marketing or manufacturing without logistical support.
Logistics has been carried out since the beginning of civilization – it is hardly new. However,
implementing best practice of logistics has become one of the most exciting and challenging
operational areas of business and public sector management.
Logistics is the designing and managing of a system in order to control the flow of material
throughout a corporation. This is a very important part of an international company because of
geographical barriers. Logistics of an international company includes movement of raw
materials, coordinating flows into and out of different countries, choices of transportation, cost
of the transportation, packaging the product for shipment, storing the product, and managing
the entire process.
Supply Chain Management is the systematic, strategic coordination of the traditional business
functions and the tactics across these business functions within a particular company and across
businesses within the supply chain, for the purposes of improving the long-term performance
of the individual companies and the supply chain as a whole.

Did u know? Logistics is typically considered as a sub-set of SCM. In SCM, five key functions
are: Procure, Make, Move, Store, and Service. Most view logistics as the movement of
products from point A to point B and all the activities involved to make this happen (from
carrier selection to planning to execution).
Logistics is involved at various stages of a supply chain; from supplier to plants, from plants to
distribution centres, from distributions centres to stores, from stores to customers, or any of
these combinations.
Logistics is the process of movement of materials and products into, through and out of a firm.

Figure 2.1: Complexity of a Typical Global Supply Chain

Source: Reji Ismail, (2008), “Logistics Management,” Excel Books

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