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Meaning of logistics
Logistics is a system of handling the physical movements of goods and services from the
place of origin to the destination as fast as possible at a low cost and with safety and security.
Logistics involves 3 broad interrelated areas as shown below:
Logistics = S + M + D
Where
S - Supply
M - Materials Management
D - Distribution
Definition of Logistics
Logistics is the science of planning, organizing and managing activities that provide
goods or services.
Logistics is the science of planning and implementing the acquisition and use of the
resources necessary to sustain the operation of a system.
The Council of Logistics Management defines logistics as the process of planning,
implementing and controlling the efficient, cost-effective flow and storage of raw materials, inprocess inventory, finished goods and related information from the point of origin to point of
consumption for the purpose of conforming to customer requirements.
Origin of Logistics
1810
2. Mass Production
assembly lines.]
1952
3.
Barcoding
4. Forrester effect
Material
requirements
planning (MRP) is a
Jay Forrester explained demand amplification in his book production planning and
Industrial Dynamics.
inventory control system.
An MRP integrates data
Gene Thomas at IBM developed Bill of Materials or the
from production schedules
earliest version of Material Requirements Planning (MRP).
with that from inventory
and the bill of materials
(BOM)
to
calculate
purchasing and shipping
schedules for the parts or
components required to
build a product.
1963
Council of Logistics Management (CLM)
Council for Logistics Management was founded under the name
of National Council of Physical Distribution Management.
1971
1984
Theory of Constraints
Early form of Cost/Service trade off
1988
Manufacturing
John Krafcik introduced the term Lean Manufacturing in his
article Triumph of Lean Production System after studying
Toyota Production System.
Lean manufacturing or lean production, often simply "lean", is
a systematic method for the elimination of waste ("Muda") within
a manufacturing system. Lean also takes into account waste
created through overburden and waste created through
unevenness in work loads.
1993
RE-ENGINEERING
re-
1996
2000
00
certification
and
benchmarking tools help
member organisations make
dramatic
,
rapid
and
sustainable improvement in
SCM..
Supply Chain
Operations Reference is the
world standard for SCM, a
model that prvides a unique
framework for defining and
linking peforamnce metrics,
process best practices and
people
into
a
unified
structure.
Logistics as a Profession
2. Product Collection System: After the product location is identified, product collection is
to be done through companys field force or third party.
3. Recycling / Disposal Centers: This may be companys plant, warehouse or any other
location. Called back products must be inspected before recycling or disposal etc.
4. Documentation System: Proper documents should be maintained at each level, this would
help in tracing the product location.
2. Inbound Logistics
All the activities related to the material movement till the dispatch of the products out of
the factory gate are called as inbound logistics activities.
Creation of value in the products depends upon availability of inputs on time. Making
available these inputs on time at minimum cost is the essence of Inbound Logistics.
Activities of a procurement performance cycle come under the scope of Inbound
Logistics. They are transportation during procurement operation, storage, handling and
overall management of inventory of inputs.
3. Outbound Logistics
All the activities in which the value added goods are to be made available in the market
for customers are called as outbound logistics activities.
Success of the firm depends upon the supply of products to the customer on time.
Supplying the products of firm at marketplace at minimum cost is the essence of
Outbound Logistics.
Activities of distribution performance cycle come under the scope of Outbound Logistics.
They are order management, transportation, warehousing, packaging, handling etc.