LOB 30503

INTERNATIONAL LOGISTICS
 CHAPTER 1
GLOBAL LOGISTICS

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 SUB TOPICS
1. Introduction
2. Logistics Definition
3. Scope of Logistics
4. Logistics Goals
5. Logistics Management Process
6. Logistics as a system
7. Players in Logistics
8. Related Terms & Definitions

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 INTRODUCTION
The key components of logistics have been an important feature of industrial and
economic life for countless years, but it is only in the relatively recent past that
logistics has been recognized as a major function in its own right.
The main reason for this has probably been the nature of logistics itself. It is a
function made up of many sub-functions and many sub-systems, each of which
has been, and may still be, treated as a distinct management operation.
Both the academic and the business world now accept that there is a need to
adopt a more holistic view of these different operations in order to take into
account how they interrelate and interact with one another.

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 LOGISTICS DEFINITIONS
According to the Council of Logistics Management (CLM) According to the Commercial sector

Logistics is the part of the supply chain process that plans,

Logistics is the process of planning, implementing and implements, & controls the efficient, effective forward & reverse
controlling the efficient and effective flow of goods, services, flow & storage of goods, services, & related information between
and related information from point of origin to point of the point of origin & the point of consumption in order to meet
consumption in order to meet customer requirements. customers requirements.

According to American Heritage Dictionary

Logistics is the aspects of military operations that deals with the

procurement, distribution, ,maintenance, & replacement of material
& personnel.

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 CUSTOMER

PLACE COST

THE
7 RIGHT OF
CUSTOMER
CONDITION TIME

QUANTITY PRODUCT

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 SCOPE OF LOGISTICS

Logistics Activities In The Production Process

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Source : Benjamin S. Blanchard, Logistics Engineering & Management, 6 th Edition, Prentice Hall, 2004,p5
 Logistic purpose is to create competitiveness & high performance by
improving companies efficiency & effectiveness
(affects profits but in environmentally friendly)

Key Logistics Activities

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 Demand Forecasting

Inventory Management

Materials Handling

Order Processing

Customer Service

Packaging

Logistics Communication

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 Parts & Service Support

Plant & Warehouse Selection

Procurement

Reverse Logistics

Traffic & Transportation

Warehousing & Storage

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Source : McGraw-Hill, James R. Stock & Douglas M. Lambert, Strategic Logistics Management 4 th Edition
 Includes physical handling, moving & storage materials increase
Cost cost in terms of personnel, mateials, operation & depreciation

Short & reliable delivery time ,Time-to customer (TTC)

Time
Short production delivery time, time-to-market (TTM)

LOGISTICS
GOALS By creating a good delivery service, SS information on material
flows or other logistic services
Customer
Service
The period of delivery time & reliability of promised are important
customer service element.

Link with society, industry, public administration & customer

Environment
Impact of logistics system through pollution, emissions, noise
from transporttaion, high energy consumption, poor handling of
waste & poor recyling
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 LOGISTICS MANAGEMENT PROCESS
Materials Flows

Requirements Information Flow

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 LOGISTICS AS A SYSTEM
A system is constructed on subsystems which in turn contain a collection
of interrelated components.
The aim of logistic system is to SS customer efficiently with their required
products
Divided into 3 main system
i. The Material System
ii. The Production System
iii. The Distribution System

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 i. The Material System (MS)
Purpose to SS production with raw material & components
MS is directly connected with Suppliers distribution system & the individual
comp. production system
Information on the needs of customers & production must be the basis of MS
e.g. Information is required on material needs for future planned production
& DD on size of shipments & delivery frequencies to be adapted to
assembly work in production
MS must also be adapted to suppliers distribution & production
If the DD is small & frequent inbound deliveries gives rise to an increase on tied-
up capital at the supplier
e.g. Since the supplier cannot manufacture such a small batches as the customer DD,
total tied-up capital & costs will increase.

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 ii. The Production System (PS)
Logistic perspective; production means those structures & systems that control
the flow of material in production through SS production resources with
information on where & how much is to be produced by machines & personnel
& to ensure access to materials & components.
The logistic PS co-ordinates machines, personnel & materials to achieve an
efficient production process
The PS is closely integrated with the material supply system
When materials are SS to rawmat store, the interface is set between the two
subsystem on outbound delivery from the rawmat store
If material SS direct to production line, MS merges into production when the
material is accessible at the company premises.
The interface with the DS is at the inbound delivery of finished goods store or if
not stores, at the dispatch to customers.

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 iii. The Distribution System (DS)
Close relationship to the overall market strategy
E.g. Market strategy that aims at SS a number of consumer daily with
inexpensive standard products over a large area will require a different
distribution structure from one aimed at occasionally distributing complex
manufacturing equipment with customer specific functions to industrial
companies.
Consolidated shipment temporary storage & sales through retail outlets may be
necessary to minimise costs & enable sufficiently short delivery times

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 GLOBAL FLOWS IN BUSINESS ORGANIZATION
1. Raw materials from the original source stocking point delivery to the customer
2. Semi-finished goods out of proprietary manufacturing facilities or suppliers
factories or warehouses
3. Machine tools & machine from one manufacturing facility to another
4. Finished products between plants, the companys own warehouse, customers
warehouse, or warehouse belonging to logistics service companies
5. Consumables & spare parts from warehouse to repair technicians vehicles or to
customers premises where products are installed
6. Goods & parts to be repaired from customers premises to repair & renovation
facilities

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 Continues
7. Supporting equipment for sales e.g as displays stands, advertising boards,
literature & so on from comapnies toi appropriate agent
8. Empty packaging returned from delivery points to loading points
9. Sold products or components returned from delivery points to their initial point of
warehousing or manufacture (reverse flow)
10. Used/consumed products to be recycled, retrofitted, reused or disposed of
(reverse flow)

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 PLAYERS IN LOGISTICS
The Customer
The Society
The Goods owner
The Transport provider/Goods mover

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 RELATED TERMS
1. Inbound/outbound
2. Supply chain
3. 3PL / 4PL
4. Door-to-Door
5. Consolidation
6. Cross-dock
7. TL / FTL / LTL /FCL
8. Backhaul
9. Intermodal Transport
10. Reefer
11. Integrated logistic
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12. COFC/TOFC / Piggyback
13. Diversion / Reconsignment
14. Transit Privileges / Stop off Charges
15. Postponement
16. TEU/FEU
17. Lo-lo/Hi-lo/Ro-Pax
18. FOB/FCA/CFR/CIF/DAF
19. Buffur stock
20. Green Logistics
21. JIT
22. KANBAN
 TASK
1. Define Logistics Management and Supply Chain Management
2. Identify the importance of Logistics
3. Find the Difference between Logistics and Supply Chain
4. What is International Logistics and Global Logistics?

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