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Components of Logistics Management
Suppliers Customers Raw
materials
In-process
inventory
Finished
goods
Logistics Management
Inputs into
Logistics
Natural
Resources
Human
Resources
Finansial
Resources
Information
Resources
Outputs of
Logistics
Competitive
Advantage
Time & Place
Utility
Efficient
Movement to
Customer
Proprietary
Asset
Planning Implementation Control
Management Actions
1. Customer Service
Logistics Activities
2. Demand Forecasting
3. Inventory Management
4. Logistics Communications
5. Materials Handling
6. Order Processing
8. Parts & Service Support
9. Plant & Warehouse -
Site Selection
10. Procurement
11. Reverse Logistics
12. Traffic & Transportation
13. Warehousing &
Storage 7. Packaging
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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1. Customer Service
• Customer service represents the output of the logistics system and the place component of the firm’s marketing mix.
• Five rights of a logistics system: 1. Right product
2. Right place
3. Right condition
4. Right cost
5. Right time
• The level of customer service determines not only whether existing customers will remain customers but also how many potential customers will become customers.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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2. Demand Forecasting
• Demand forecasting involves determining the amount of product and accompanying service that customers will require at some
point in the future.
• Forecasts of future demand determine promotional strategies,
allocation of the sales force, pricing, and market research
activities.
• Logistics management forecasts of demand determine how much of each item produced by
the company must be transported
to the various markets
the firms serves.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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3. Inventory Management
• Why hold inventory 1. Economies of scale
2. Balancing supply and demand
3. Specialization
4. Protection from uncertainties
5. A buffer throughout the supply chain.
• Inventory management involves
trading off the level of inventory held to achieve
high customer service level.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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4. Logistics Communication
Effective communication must take place among: 1. The organization, its suppliers, and its customers.
2. The major functions within organization.
3. The 13 various logistics activities.
4. The various aspects of each logistics activity.
5. Various members of the supply chain.
...
Business
Information
Ware-
house Sales
Force
Auto-
mation
B2B
Procurement
Advanced
Planner &
Optimizer
R/3
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
7
5. Materials Handling
The objectives of materials handling are to:
1. Eliminate handling wherever possible.
2. Minimize travel distance.
3. Minimize work-in-process.
4. Provide uniform flow free of bottlenecks.
5. Minimize losses from waste, breakage, spoilage, and theft.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
8
6. Order Processing
• A customer’s order triggers the logistics process and
directs the actions to be taken in satisfying order demand.
• The components of order processing demand: 1. Operational elements.
2. Communications elements.
3. Credit and collection elements.
Sumber: Stock & Lambert (2001)
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7. Packaging
• Packaging performs two basic functions: marketing and logistics.
• In a marketing sense, the package acts as a forms of promotion or advertising.
• In logistics, packaging serves a dual role: – The package protects the product
from damage while it is being stored or transported.
– Proper packaging can make it easier to store and move products, thereby reducing materials handling costs.
Sumber: Stock & Lambert (2001)
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8. Parts & Service Support
• Logistics’ responsibility does not end when the product is delivered to the customer.
• Logistics must be concerned with many activities involved in the repair and servicing of products.
• This will require strategies and programs that are coordinated with other reverse logistics activities.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
11
9. Plant & Warehouse Site Selection
• The location of plants and warehouses (storage facilities) is extremely important.
• The strategic placement of plants and warehouses can assist firms in improving
customer service level.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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10. Procurement
• Procurement: the process of acquiring materials and services to
ensure the operating effectiveness of firm’s
manufacturing and logistics processes.
• The procurement function includes: – The selection of supply sources
locations.
– Determination of the form in which the material is to be acquired.
– Timing of purchases.
– Price determination.
– Quality control
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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11. Reverse Logistics
• The handling of return goods is part of the larger
process referred to as reverse logistics.
• In many industries in which customers return products for: – warranty repair,
– replacement,
– remanufacturing, or
– recycling,
reverse logistics costs are high relative to forward logistics costs.
Plant Distribution Dealer
Plant Distribution Dealer
Plant Distribution Dealer
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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12. Traffic & Transportation
• The traffic and transportation activity involves managing the
movement of products and includes:
– Selecting the method of shipment,
– Complyng with various transportation regulations, and
– Being aware of both domestic and international shipping requirements.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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13. Warehousing & Storage
• Products must be stored at the plant or in the field for
later sale and consumption unless customers need them the instant they are produced.
• Warehousing and storage activities involve the management
of the space needed to hold or maintain inventories.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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The Global Logistics Environment
Logistics Executive Ware-housing
& Storage
Transpor-tation
Packaging
Inventory
Customer Service
Other Activities
Economic
Compe-tition
Technology Geography
Social &
Cultural
Political & Legal
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.
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