Figure 1.

1 Spectrum of products

Largely Balance of goods Largely

goods and services services

Car House Book Fast food Health Sea Education

makers builders publisher restaurant service cruise
Figure 1.2 Operations transform inputs to desired outputs

INPUTS OPERATIONS OUTPUTS

• People • Manufacture • Goods

• Buildings • Serve • Services
• Raw materials • Supply • Profit
• Equipment • Transport • Waste
• Information • Sell • Wages
• Investment • Train • etc
etc • etc
External Organisation External
suppliers customers
Operations within an organisation

Inward Outward
logistics Materials management logistics

Logistics

Figure 1.3 The flow of materials controlled by logistics

 Grown by
gardener Tended in
Seed
Seed nursery
Seedling
Seedling Taken to forest
Young
Youngtree
tree

Planted
Plantedtree
tree
Felled by
Chipper logger
Logs Mature
Maturetree
tree
Logs Tended by
forester
Wood
Woodpulp
pulp

Processed
Processed
Raw
Rawpaper
paper
Finished
Large
Largerolls
rolls
of Small
Smallrolls
rollsof Cut
ofpaper
paper finished
of
finishedpaper
paper
Sheets
Sheetsof
of
paper
paper

Transport Transport Finished Packaged

Storage Storage
Storageatat Finished
Storageatat wholesaler packs
packsofofpaper
paper
Purchase retailer wholesaler
retailer

Final
Final
customer
customer Figure 1.4 Outline of the supply chain for paper
Figure 1.5 Activities in a simple supply chain
Figure 1.6 Typical supply chain around a manufacturer
Figure 1.8 Adding a wholesaler simplifies material flows
 Customers
Customers
Moved to Create

Logistics is Demand
Demandfor
for
Supply
Supplyofof products
products responsible for products
products all movement

Passed to
Organise
Operations
Operations

Other Inputs
Inputsneeded
Otheroutputs
outputs needed
by
byoperations
operations

Figure 1.9 Essential role of logistics in meeting demand

 Current
Stocks
assets

Assets
Property,
equipment, Fixed assets
plant, etc

Return on
assets
Customer
Sales
satisfaction

Product
Price Profit
features

Operating
Profit margin
costs

Figure 1.10 Influence of logistics on ROA