Logistical Coordination Coordinating logistical flows Logistical flows are material flow, information flow and cash flow

or realization Logistical coordination is ensuring a well planned, smooth, uninterrupted and quick flow of materials in the value chain This objective is achieved by ensuring smooth flow of information in the same value chain. Realization is the result of well-coordinated flows of information and inventory Coordination takes place when logistical plans incorporate strategic customer service objectives and constraints to meet the above

 Net work design [Location analysis] What is a network? Location of facilities and routes or links Network influences cost of product movement What is location analysis? Study of the locations & links for minimizing logistical costs and or maximizing customer service


Some salient features of net work design  Number of facilities [factories and warehouses]  Their locations  Communication systems  What is to be performed in these facilities, What item? Store? Break bulk?  Who should operate these facilities  What should be the size of the facility? Factors to be considered in deciding the size 9. Fixed versus variable slot locations for product storage 10.Horizontal versus high rise layout

1. Order picking versus stock replenishment activities 2. Multi-dock versus single dock layout 3. Aisle space versus rack space 4. Labor intensive or high tech operations 5. Degree of automation in picking 6. Amount of cross docking


Number of facilities


Importance of location analysis or logistical network design 1. This is strategic in nature. But this decision needs review periodically Changing customer service requirements. There is constant pressure to reduce lead times and costs Long term relationship or strategic partnership with suppliers Dynamics of market • Changing customers • Shifting locations of customer • Changing locations of supply market

• Change in corporate ownership and subsequent changes in corporate policies 2. Impact of network design on cost of moving the product to the customer Analysis of logistical network yields opportunities for cost reduction No of locations influence the inventory levels (inventory cost) in the firm, the square root law Who operates these facilities? - outsourcing decisions Communication between these facilities

3. Network design Has direct impact on ‘Delivery’ expectations of the customer and thereby on customer satisfaction. 4. Network is sensitive to Competitive action – to be able to be competitive to the customer with respect to competition 5. Network design has to accommodate corporate organizational changes such as down sizing and reengineering 6. Globalization


Some models for facility location Gravity model Analytical models Ton-mile center


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