CHAPTER 1

DPL 10013 FUNDAMENTAL OF LOGISTIC MANAGEMENT PREPARE BY PN NURUL ASHIKIN MD TAIB

Overview of Business Logistics and Planning 1.Explain the nature of business logistics and planning 1.Describe the nature of business logistics and planning 2.Define the activity mix that involved in logistics business 3.Indicate the importance of business logistics 2.Describe supply chain management 1.Identify materials management 2.Describe physical distribution 3.Describe reverse logistics 4.Identify corporate and logistics planning

The nature of business logistics and planning  logistics is a business planning framework for the management of material,service,information and capital flows Material flow ► Procurement → Operations → Distribution ► Customers Requirements information flow Suppliers ►►

Primary logistics activities Primary Logistic Activities Several Specefic Activities Transportation ➢ Mode of Transport ➢ Carrier Routing /Scheduling ➢ Shipment Size / Consolidation Inventory ➢ Inventory Level ➢ Deployment of Inventories ➢ Control Methods Location/warehouse ➢ Number,size and location of facilities ➢ Assigment of stocking points to sourcing points ➢ Assigment of demand to stocking points to sourcing points ➢ Private / public warehousing

The activity mix in Business logistics  Transportation involves all acts of transferring cargo from one location to another.  Inventory management The supervision of non-capitalized assets.  Order processing Standard Operating Procedure(SOP) will be prepared before any activity in order for all parties to understand and achieve fullest compliance.  Purchasing Purchasing is buying materials and all other activities that is associated with the buying process  Warehousing The major activities are storage, information transfer and also movement activities, such as receiving, put away, order picking, cross docking, and shipping.

 Materials handling logistic is highly involved in the material handling whether it is inbound and outbound, including materials that is in storage.  Packaging 1. Containment - product should be contained before they can be move to another location 2. Convenience - product must be conveniently packed with the lowest wastage and effort for the customers. 3. Protection - product must be adequately protected against damages or losses from environmental effects 4. Apportionment - product must be packed based on the need of customers to consumer 5. Unitization - product must be able to be fit into secondary storage such as corrugated boxes, pallets, containers, etc. 6. Communication-product must be recognizable by its appearances with readily understandable symbols such as the UPC.  Customer service standard customer not only want to know the location of their cargo but also the added assistance that a logistics company can give.  Product scheduling In logistic, its important to be precise to meet production planning schedules of an organization.

Importance of Business Logistics a) Cost b)Length of Supply & c)Strategy Role Distribution Lines Value to the customer and firms in As business logistics are capable of term of quick delivery and saving will Firms are seeking or developing global lowering a significant portion of the be value cost added to the logistics strategies cost incurred by the organization. activities. - Product to the whole world - Product produced where the cost are lower - Product produced locally but sold internationally. d)Customer Value e)Customer Wants When the product requested Fulfilled customer need and wants reach the buyers at the same time and place specified by the buyers, value will be created.

Supply Chain Management  All stages involved, directly or indirectly, in fulfilling a customer request.  Includes manufacturers, suppliers, transporters, warehouse, retailers & customers  Within each company the supply chain includes all function involved in fulfilling a customer request. Supplier Manufacturer Distribution Retailer Customer Supply Chain Stages

The Primary material Supporting activities; management activities; • acquisition • transportation • protective packaging • inventory management • warehousing • Order processing • materials handling • information maintenance Material Management

Benefit of material management Improve Cash Flow • Prevent material waste or damage so do not have to buy new material. • Do not have to provide big storage capacity to store the material. • Reduce claim reduction (gain more profit) Reduce surplus • Prevent over buying amount/stocking of material. • Estimate the amount needed to reduce material damage and has to be wasted Improve labour • Prevent buying material that is not suitablewith production. productivity • Encouraging the labors to finish the production work on the given time. Can avoid claim • Gain a good quality finished production or product. reduction • Plan and estimate the amount of material that will be used Can avoid material • reduce material usage damage • Do not have to claim more money from client • Buy a little amount at a time • Need a small storage capacity • Reduce of material waste due of uneven storage capacity.

Describe Physical Distribution Part of supply chain management that plan : The logistician can arrange the distribution strategically though : •implement •control the efficient -Direct shipment from plant •effective forward and reverse flow and storage of good inventories •services and related information -The production line or shipment thourgh the ware houseing syestem

DESCRIBE REVERSE LOGISTICS Council of Logistics Stands for all operations to the Remanufacturing and Management (CLM) reuse of product and materials. refurbishing activities also may •introduced as the term often process of : include definition of reverse used to refer to the role of logistics. logistics in recycling,waste • planning disposal and management of • implementing •reverse logistics process hazardous materials •controlling the efficient include the management and •cost effective of raw the sales of surplus as well as •a broader perspective returned equipment and includes all issues relating to materials machines from the hardware logistics activities carried out •moving goods from their leasing business.. in source reduction, recycling ,substitution typical final destination for the purpose of capturing value or proper disposal.

CORPORATE AND LOGISTIC PLANNING TYPES OF PLANNING MANAGEMENT LEVEL IN AN ORGANIZATION Strategy (Desingn) Top management level Planning Middle Management level Operation Supervisory level Operative level

Top Management Level • Will investigate ways to facilitate development of the company as a whole • At this stage, general managers, chief operating officers and cief executive officers play a bigger role to look, think and act strategically for the company best interest. • Managers also invole in decison making Middle Management Level • Manages the performance of individuals and department based on set targets. • Also looks into other element such as customer service, quality masurement, quality assurance, ISO certification. Supervisory level • Operation team will plan the production based on the order entry keyed Operative Level in. • Responsible to ensure the equipment and machine maintenance is running at optimum levels.