 Logistics

- The movement of product from point of origin (Factory / Manufacturer) to the point of
consumption.
- i.e: Car – how the car move from the manufacturer to consumer.

 Logistics Management
- Delivering to the customer the desired level of services and quality at the lowest affordable
costs.
- Design & administration of system to control the flow of materials throughout a corporation.
- How you handle the logistics activities. / Activity involved in / happen in between logistics.

 Logistics activities

1. Transportation 4. Inventory management 7. Customer services

2. Warehousing 5. Information management 8. Customer order processing
3. Packaging 6. Material handling 9. Location analysis

 Types of logistics
1. Reverse logistics / Product recall.
- A process of moving goods from their place of use, back to the place of manufacturer for
reprocessing, repair, recycling @ disposal.
- 2 situations:
- direct from customers to manufacturer
- from customers to retailers/suppliers back to manufacturer

2. Inbound logistics
- The movement of raw materials and parts from suppliers to manufacturer.
- Refers to the transport, storage, and delivery of goods coming into manufacturer.
- i.e: Car. raw material – rubber
- Supplier send the rubber to vehicle manufacturer for producing tyre.

3. Outbound logistics
- The movement of finished goods from manufacturer to customers / point of consumption.
- The process of storing, transporting and distributing goods to customers.
- 2 situations:
- Direct from manufacturer to customers.
- From manufacturer to retailer/supplier then to customers.
- i.e: IKEA delivery the furniture to customers.

4. Third party logistics (3PL)

- A third party logistics providers provides outsourcing logistics services of transportation only
for companies.
- Outside agency helps manufacturer to do movement of products for delivering to customers.
- i.e: UPS, GDex, DHL, Fedex.

5. Fourth party logistics (4PL)

- Refers to complete outsourcing of manufacturing and logistics functions including selection of
3PL.
- 4PL providers also manufacture the product, decide the 3PL, packaging, warehousing functions
and so on.
Importance of logistics
1. Products may reach globally
- all other countries can use a pro with help of DHL, GDex, and UPS.

2. Increase profits

3. Cost savings
- the more units of product u send, the more cost u can save.

4. Increase customer satisfaction

- manufacturer get a well shipper that can provide fast, accurate & quality services,
- customer demand for better services – product delivered them asap (timely manner).

5. Warehouse management
- avoid storing the goods for too long
- maximize storage capacity of warehouse
- increase the efficiency cash turnover
- inventory management / reduction.
Objectives of logistics
1. Inventory reductions
- reduce the stock as much as possible.
- avoid to store the product too long

2. Minimum product damages

- product damages increase the logistics costs.
- reasons for product damages :
- improper logistical packaging
- poor handling

3. Ensure maximum customer satisfaction

- get good review & feedback from customer

4. Lower logistics costs

5. Reliable & consistent delivery performance

- a good logistic should provide better, quality, timely, and accurate service to customer
- no delay in delivery, no sending wrong product or damage