Supply Chain Management

11.1 INTRODUCTION

There is a great deal of material that is moved in and out of any organization. Organiszations collect raw materials from suppliers and deliver finished goods to the customers. It is logistics that executes this function. In other words, logistics is the function that moves both tangible materials (e.g. raw materials) and intangible material (e.g. information) through the operations to the customers (as a finished product).

The role of logistics has been perceived by many senior managers and chief executives, as nothing more than getting the right product at the right place in right time and within cost. However, in recent times to be successful logisticians a wider perspective has to be developed with due consideration to the strategic role played by logistics management in an organisation. Strategic management of acquisitions, movement and storage of raw materials, production and shipment to delivery to end-users are some of the significant tasks of logistics management. Cost-effectiveness, speed and reliable delivery are the inherent requirements to make the logistic operation successful.

Logistics is a very intricate yet a very simple subject to learn about, it is complicated taks to manage in case the channels of logistics are not in place and are not integrated. Logistics require a lot of coordination and integration at the highest and the lowest of levels. Rightly said, a logisticians phone never stops ringing, he moves from crisis to crisis, and from one criticality to another, in order to properly manage the function.

Objectives

After studying this unit, you should be able to

* define Logistics,

* describe the facets of Logistics, i.e. transportation, warehousing and information systems,

* portray Logistics as a key to supply chain management,

* discuss about Inbound and Outbound Logistics, and

* describe Logistics from supplier to manufacturer and manufacturer to consumers.

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Operational Aspects of

Production Management

11.2 LOGISTICS : DEFINITION

We will begin this unit with an illustration. Take a case of a small businessman who manufactured and marketed jam, those were the days when it had only a few brands to reckon with. It entailed travelling long distances from Calcutta (now Kolkata) to the remotest parts of Bengal and Bihar (some areas of Jharkhand). The load used to be huddled up at the rear (body of the vehicle) neatly packed in bright coloured cardboard packages. The manufacturer processed the guavas/mangoes/pine-apple, etc. into a jelly like substance, bottled them carefully under his eyes, sealed them with molten wax (that was the practice those days), labelled them, packed them into neat containers careful enough to prevent breakages, marked them and dispatched them to their destination. The surplus were sent to a badly lit room and stacked neatly by placing bricks under the packages to prevent against damp. You must have observed how meticulous he was and so concerned about his products.

One must admit here that one learns logistics in a very practical way. Right from the time you used your tri-cycle to lug the loads your friends carried. When you played as children, unknowingly, stacking your belongings neatly and carefully, inadvertently, and later delivered them to another friend and took a few marbles in return of those proud possessions. Till date one is doing almost the same thing; mobilizing men, material, equipment and supplies over long distances across the length and breadth of this country, and stocking them for a future use. That is what is logistics in short.

Coming to the proper definition, the term logistics could be used to cover all aspects of movement, storage of material and to deliver the material to the user. For a manager the definition would mean involving movement of goods both at the inbound and outbound sides. He is responsible for both supplying and distribution of goods to the next member of the supply chain and to the end consumer. In almost all cases, the logisticians design and manage the company's distribution system, which consists of warehouses, distribution