Logistics: Supply Chain Management and Materials Essay Example
Logistics comprises a significant number of managerial activities that are crucial to the logistics system. There are five specific activities that are particularly important in this regard. These activities involve planning, implementing, and controlling the efficient and cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information. Their ultimate goal is to meet customer requirements. Logistics is accountable for the movement and storage of materials within the supply chain. Furthermore, depending on the situation, there may be other activities encompassed within logistics.
Sometimes an organization may encompass various activities such as sales forecasting, production scheduling, customer service management, overseas liaison, and third-party operations. When examining the movement of materials within an organization, logistics typically includes the following activities: procurement/purchasing, warehousing, and materials handling.
Procurement or purchasing involves initiating the flow o
...f materials by sending a purchase order to a supplier. This entails finding suitable suppliers, negotiating terms and conditions, arranging delivery, insurance, and payment, as well as facilitating the process of bringing materials into the organization. What was once considered a predominantly clerical role focused on order processing is now recognized as a crucial link to upstream activities and is receiving increased attention.
Warehousing is responsible for storing materials and managing them until they are needed. Certain materials require special care, such as frozen food, drugs, bonded alcohol, fume-emitting chemicals, animals, and dangerous goods. In addition to ensuring prompt availability when needed, warehousing also ensures that the materials are maintained under appropriate conditions, treatment, and packaging to preserve their quality.
Materials handling refers to the transportation of materials within an organization's operations. It involves moving materials from one operation to another, including transferring materials picke
from storage to the designated location where they are required.
The goal of materials handling is to achieve efficient movements, minimize travel distances, utilize appropriate equipment, reduce damage, and employ specialized packaging and handling when necessary. Inventory control encompasses considerations such as the materials to be stored, overall investment, customer service, stock levels, order sizes, and order timing. Location plays a crucial role in logistics activities, with various options available. Finished goods can be stored at the end of production, transferred to nearby warehouses, placed in stores closer to customers, managed by external organizations, or other alternatives. Logistics is responsible for determining the optimal locations for these activities and also addresses questions regarding facility size and number.
These decisions have a significant impact on the overall design of the supply chain.
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