CHP 1 NOTE

1. Define logistics designed for a world market or products are

2. Define activity mix in logistics business produced where the cost of raw materials,
3. Determine the importance of business logistics components and labor are lower or products are
4. Identify materials management produced locally but sold internationally.
5. Describe physical distribution
6. Describe reverse logistics iii. Strategic role : As business logistics are capable of
7. Identify activity mix lowering a significant portion of the costs incurred
8. Identify corporate and logistics planning by organization, its role is now more prevalence in
the strategic planning of the organization.
1. Define logistics : the process of planning,
implementing, and controlling the efficient, effective iv. Customer value : Value will be created when product
flow and storage of goods services and related requested reach the buyers at the time and place
information from point of origin to point of specified. Four types of value which are form, time
consumption to meet customer requirements and possession however logistics will create two out
(Council of Logistics Management, 1998) of four values which are time and place values in
product mainly through transportation.

v. Customer wants : Has needs and wants. Needs refer

2. Define activity mix in logistics business
to basic needs. Wants are shaped by culture and
Business logistics is known as physical distribution, materials changing environment.
management, transportation management and supply chain
management. 4. Identify materials management

Activity involves in business logistics : Primary materials management activities : (TIP)

i. Transportation TIO i. Transportation

ii. Inventory management PWM ii. Inventory management
iii. Order Processing PCP iii. Purchasing
iv. Purchasing
Supporting activities : (WIMAP)
v. Warehousing
vi. Materials handling i. Acquisition
vii. Packaging ii. Protective packaging
viii. Customer service standards iii. Warehousing
ix. Product scheduling iv. Materials handling
v. Information maintenance
These activities are being managed by organizations
logistician. To achieve successful coordination of the business
5. Describe physical distribution
logistic activities, it requires an effective and efficient
management. Therefore , the need to manage these activities *Also called marketing logistics
requires planning, organizing, and controlling the logistics *Involves planning, implementing and controlling the physical
activities. flow of goods, services and related information from the
point of origin to point of consumption in order to meet
3. Determine the importance of business logistics
customer requirements at a profit
*Primarily concerned with finished and semi finished goods
i. Cost : Logistic costs are most significant cost in most
that a company produces and usually on offer to sale.
firms. This is true if logistic not well planned. The
*Logistician can arrange the distribution strategically
savings from minimizing costs would benefit
through /direct shipments from plant inventories/ or /direct
customers and company’s shareholders.
shipment from vendors or /the production line or shipment
through the warehousing systems.
ii. Length of Supply and Distribution lines : Firms are
developing global strategies, whereby products are
 CHP 1 NOTE
6. Describe reverse logistics
Types of planning Management Level
*Stands for all operations related to the reuse of products
in an Organization
and materials.
*The process of moving goods from their typical final
destination for the purpose of capturing value or proper Strategic Top Management Level
disposal.
*Remanufacturing and refurbishing activities also may be Middle Management Level
includes the management and the sale of surplus as well as Tactical
returned equipment and machines from the hardware leasing Supervisory Level
business.
*Resource goes at least one step back in the supply chain. Operation Operative Level
*Product sent to customers might be returned by the
customer if a wrong product is delivered, damaged, broken,
unwanted, access for simply that customer changes his or her
mind. Types of planning at different management levels
*An example; a manufacturer produces product A which
moves through the supply chain network reaching the Each type of planning has different time frame, For example:
distributor or customer. Any process or management after i. Mission is long term
the sale of product A involves Reverse Logistics. If product A ii. Strategy is longer than one year
happened to be defective, repairing, recycling or disposing iii. Tactical usually less than a year
the product. Product A will travel in reverse through the iv. Operational is short range with decisions made
supply chain network in order to retain any use from the frequently
defective product.
The type of information also differs. The information strategy
7. Identify activity mix is often incomplete and imprecise. Data may be average. An
*Activities divided into key activities and support activities accurate data is required for the operational level. For
Key activities Support activities example, it is planted that all inventories do not exceed a
Customer Service Standards Warehousing certain amount but at an operational level, inventories are
Transportation Material Handling managed individually.
Inventory management Purchasing
Information flows and Order Protective packaging
It has been suggested that a logistics strategy has three
Processing
objectives :
Cooperative with
production/ Operations to i. Cost reduction
Information maintenance ii. Capital reduction
iii. Service improvement through its major planning
*Key and support activities are separated because certain areas in customer service goals, facility location
activities will generally take place in every logistics channel, strategy, inventory decisions and transport strategy
whereas others will take place depending on the of logistics.
circumstances within a particular firm.

8. Identify corporate and logistics planning

*The broad and general statement that addresses the
customers, suppliers, competitors and company makes up the
corporate strategy.
*It serves as the plan of where the firm is going and how to
get there.
*This is called corporate strategy.
*Later converted into strategy, tactical and operational
statement at different level in the organization.