Lecture note - Day 1

When we finish this lecture you should:

Understand the relevance of physical distribution with customer demand.
Understand why the physical distribution customer service level is a key marketing strategy variable.
Understand the physical distribution concept and why it requires coordination of storing, transporting, and related activities.
See how firms can cooperate and share logistics activities to improve value to the customer at the end of the channel.
Know about the advantages and disadvantages of the various transporting methods.
Know how inventory decisions and storing affect marketing strategy.
Understand the distribution center concept.
Pass your exam!



Key Logistics Activities

Customer service
Demand forecasting/ planning
Inventory management
Logistics communications
Material handling
Order processing
PackagingParts & service support
Plant & warehouse site selection
Purchasing
Return goods handling
Reverse logistics
Traffic & transportation
Warehousing & storage



The Definition of Logistics

Logistics management is that part of the Supply Chain Management process that plans, implements, and controls the efficient, 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 customers' requirements.

These are the boundaries and relationships of Logistics Management adopted by the Council of Logistics Management: "Logistics Management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management of third party logistics services providers.

To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution -- strategic, operational and tactical.

Logistics Management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance and information technology."



Case Study 1

Plan your logistics requirements if you are the:
Logistics Manager in Samseng Handphone Manufacturing Sdn. Bhd.
Supplier of raw materials to Protone.
Logistics Manager in Nestlay Food Industry.

Define your point A and B accordingly.
You must include key logistics activities between A and B.
You have agents, wholesalers and retailers. Where will you position them and what will be their role in your logistics chain?