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Lecture 1
3. Functions of Logistics
If:
Logistics Supply Firm
Strategy = Chain Strategy
Effectiveness
If:
Logistics Supply Firm
Strategy ≠ Chain Strategy Effectiveness
Cost Perspective
Keep in mind that the most efficient
systems are not always comprised of
each system component operating at
its lowest possible cost.
The critical concern is to have the
entire system operating at its lowest
total cost.
Sales Branches
DRP
RDC’s
Product MPS’s
MRP
BOM’s
Logistics flows in a Firm
A Complex Logistics Channel
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Why is it necessary?
In-plant logistics
is under the control of one organization, but
Inbound and Outbound logistics practices
evolve through the interplay of independent
economic agents, each of whom acts based on
assumptions about the others.
Resolving such issues requires not only
technically workable solutions but also the
means of persuading players that the game
has changed.
Why is it necessary?
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