SC 314

TRANSPORTATION & BUSINESS

LOGISTICS MANAGEMENT
Laurenti S. Masui
Department of Procurement & Logistics Management
 Lecture 1
GENERAL
INTRODUCTION TO
TRANSPORTATION
Introduction
Defined: vital factor in the cultural and
economic development of the human race
 e.g coastal cities , inland centres e.t.c
Importance of Transportation
(General)
Enables the supply of goods inward and
outwards due to different endowments;
raw materials, power, skills etc
Enables mobility of our population for
economic, social, educational or other
purposes
Reduces or eliminates isolation
Promotes economic, social and political
developments =the unity in the country
Importance of Transportation
(To the economy)
It enhances the geographical
specialization/territorial division of labour
= trading is possible in this regard.
Such specialization enables the existence
of a large-scale production. This leads to
benefits into
◦ Economies of scale
◦ Production efficiencies
◦ Lower prices
ctd
 The availability (accessibility) of different areas (and
would mean that the land value is increased= time,
effort and cost involved in getting to and from the
land is greatly reduced.
 NB in some other cases it reduces the value of land as
it takes away the attention to it
 It enhances competition among sellers
 = this leads to better quality, lower prices etc
 It brings about the economic development of any
geographical area
 = this depends on the quantity, quality and cost of
transportation services available
 For national defence?
Importance to the User
who are the users?
 = freight shippers, receivers,
passengers, business firms etc
most of them also apply here but
specifically this can be said of the users
Importance to the User
(ctd)
It saves time
It brings goods/and gets them to a place:
Time and Space(Place) utility
It affects the users’ decision making
 Product decisions
 Market area decisions
 Purchasing decisions
 Location decisions
 Pricing decisions
Transportation as a cost factor
Depending on number of factors
 The kind of firm it is (wholesaler, manufacturers
etc)
 Kinds of products transported
 The distance involved.
 The number and size of individual shipment
 The peculiarities of the transportation rate structure.
Transportation as an element in a
user’s logistics systems
Logistic system includes
◦ Transportation, warehousing, inventory
management, materials handling etc.
◦ others that have to do packaging with the
physical movement of goods both in bound
and out bound
The Decision Makers in Transport
The stakeholders:
◦ Users of transportation services
Shippers, receivers, and passengers
◦ Providers of transportation services
Carriers (5 modes, rail road, highway,
water, pipeline air
The Government
And now for Logistics…..
Defined: The Coordination of the
physical movement aspects of an
organisation’s operations so that a flow of
raw materials, parts, and/or finished goods
is achieved, cost minimized for the level
of service desired.
Logistics ctd
Put it differently Logistics Management
entails
Guiding the process of planning,
allocating and controlling financial and
human resources committed to physical
distribution, manufacturing, support and
purchase operations.
Logistics: The Two parts
Physical supply. Has to do with the inbound
side of the problem of moving goods and
includes all those activities required to move
physical goods from their source of supply to
the place of processing, manufacture and
resale (wholesaling and retailing).
Physical distribution: (the outbound)
includes all those activities necessary to
move physical goods from the point of their
processing, manufacture or resale to
customers.
The Objective of Logistics
It aims
• to get the right things
• in the right quantity
• to the right place
• at the right time
• at the right cost and
• in good condition
Why this increased interest in
Logistics Management?
It is a result of
Competition
Narrow profit margin
Rising physical movement costs
Proliferation of products
Increased customer orientation
Availability of computers
Lack of attention in the past.
The End

Thank You