LOGISTICS AND

SUPPLY CHAIN
MANAGEMENT

Day 2: Logistic in Business

Dr. Ramil David Solis, DBA

Professor

26NOV2023
 TOPIC PRESENTATION
Logistic in Business
• Business Logistic
Definitions
• Importance of Business
Logistics
• Logistics Stakeholders
• Logistic Activities
 v It is a business planning framework that
Logistic in is concerned with

Business ü material procurement,

ü materials management and
ü overall inventory control.
v It is an activity that takes goods from
source to destination location.

A business logistics system is

considered to be effective if it helps to
reduce the carrying and storage costs
of inventory and increase profits flow in
the organization.
Importance of
Business Logistics
ü It includes the inbound as well the outbound
movement of inventory and supplies.
ü It estimates the demand of the organization,
ü It help in the requirements of the organization
for the project in hand,
ü it decides the sources and the method of
procurement of materials,
ü it exercises control over the physical movement
of inventory between departments
ü it is also concerned with the process of storing
the inventory
ü It is concerned to achieve an optimum level of
demand and supply to reduce costs.
ü It is a larger concept than distribution
management
ü it includes the task of forecasting and the
process of procurement
ü It combines physical distribution and materials
management
Business logistics
comprises of
processes like:

v coordination of project requirements

v procurement of inventory

v control over the physical movement

of inventory, and

v Storage of raw materials, semi-

finished products and finished goods so
that optimum demand supply
equilibrium is reached at minimum
costs.
Business
Logistics
Stakeholders
 1. Shippers: These are the users or
customers who want to use the business
logistics services.

2. Suppliers: The companies which

provide logistics services based on the
goods, services, inventory type volume
etc.

3. Transport carriers: The type of

transportation which are required to
transport the goods i.e. railway,
airways, roadways, waterways, pipeline
etc.
4. Warehousing: These are
stakeholders in the logistics cycle
which provide options to store goods in
warehouses.

5. Freight forwarders: Companies

which plan, schedule, operate &
coordinate movement of goods.

Business Logistics 6. Terminal operations:

stakeholders in logistics
These
enable
Stakeholders operations at docks
 Logistics Activities

Five interdependent activities:

1. costumer response
2. inventory planning and management,
3. supply,
4. transportation,
5. warehousing.
Examples of Business Logistics

One example of business logistics would

be a company that manufactures car
parts working to coordinate the
shipment of their parts from a
manufacturing plant to an assembly line.
This process would likely involve the
efficient management of inventory,
transportation, warehousing, order
fulfillment, and information flow.
• A manufacturer bases its business model on a just-in-
time inventory management system that aligns receipt of
raw materials with production schedules so there is little
need to pay for storage and a company’s capital is
continuously freed for reinvestment. Its logistics priorities
include demand planning, selecting suppliers that
consistently deliver on time and on budget, fast intake of
materials upon arrival and efficient material handling. Once
final goods are manufactured, priorities shift to packaging
the finished product and transporting it to distributors,
wholesalers, retailers or other customers. Manufacturers
need to manage true end-to-end logistics from procurement
to receipt to manufacturing to packaging, storage and
transportation to a buyer.

• If the manufacturer has a direct-to-consumer model, it

may use a supply chain as a service provider to get its
products to the end customer.
• In the second example, a boutique clothing
store orders stock from designers and manufacturers.
Finished goods arrive at the retailer’s main distribution
warehouse for intake. The items are first unitized—
broken down from bulk commercial packaging to
individual consumer packages. Barcodes are added,
then items are sorted, packaged and shipped to the store
or a nearby warehouse. Logistics for the retailer begins
with intake of goods and continues through the
movement of those goods to their final destinations,
which in this case is a brick-and-mortar store, not the
final customer.

• In a second retail scenario, some or all of the goods

are sent to an order-fulfillment center, where they are
processed and shipped to the end customer, who likely
made the purchase online. In this scenario, logistics
entails the retailer receiving the goods it ordered from
suppliers, unitizing them and storing them in the
fulfillment center’s storage onsite to be sorted per
customer order and then shipped by a third-party
logistics supply company, such as UPS, FedEx or
USPS.