An integrated approach in logistics requires the unification of various functional areas and their participants within a single drug system in order to optimize it. This approach extends both to the microeconomic level of the company itself and to the business platform (B2B or B2C). It is important that, when solving problems of optimizing management at the micro level, within the enterprise - the “owner” of the logistics process, managers proceed from the problem of optimizing the drug product as a whole. The pursuit of unified supply, production and distribution is the only possible prospect in addressing issues of achieving goals within the framework of the drug. This approach allows you to obtain accurate information about the condition and location of a product/service at any moment - from the “entry” at the source of raw materials to the “exit” - receipt of the goods by the end consumer, information about industrial complex and about the entire distribution network. The advantages of the integrated approach are indicated by the following arguments:
¦ the separation of distribution, production management and supply issues can lead to disagreements between functional areas and relevant departments, which hinders the optimization of the system as a whole;
There are numerous contradictions between production and marketing. Integration into a system is the most adequate way to resolve them;
¦ the requirements for the information system and for the management organization are of a single nature and apply to all types of logistics operations. The task of coordination is to optimally link at the operational level the various requirements arising in the drug system.
The integrated approach creates a real opportunity to combine functional areas of logistics by coordinating actions performed by independent parts of the logistics system that share common responsibility within the target function.
As stated above, currently the concept of integrated logistics in Western business has been transformed into the business concept of Supply Chain Management - SCM - “Supply Chain Management”.
Organizational information integration of logistics system counterparties
The idea of integrated logistics is based on the fact that enterprises included in the supply chain increasingly understand the need to follow the same goal - working towards a common end result associated with satisfying an identified need. To do this, they must mobilize their efforts and direct them towards coordinating actions.
In the theory of integrated logistics, there are two levels or two approaches to integration. The first is the integration of logistics functions at the enterprise level or intra-company integrated logistics. The second is integration across the entire supply chain or intercompany integrated logistics. Their commonality is determined by cross-functional integration.
Deviation from the idea of integrated logistics at the level of a specific enterprise leads to the following negative consequences:
* the enterprise has different, often conflicting goals;
* duplication of efforts and decreased productivity occurs;
* communications deteriorate and information flows between individual structural divisions of the enterprise become more difficult, which, in turn, impedes coordination between them and leads to lower
efficiency, higher costs and ultimately poorer customer service;
* the degree of uncertainty in the functioning of supply chains increases and the duration of delays increases;
* unnecessary buffer and insurance reserves appear between individual elements, such as, for example, work-in-progress inventories;
* important information, such as total logistics costs, becomes unavailable;
* logistics as a whole receives a lower status in the enterprise.
Obviously, the main way to avoid these consequences is to consider logistics not as a set of functional activities, but as a single integrated function. Intracompany integrated logistics is the provision at the enterprise level of the interconnection of supply logistics, intra-production and distribution logistics, which are carried out in the form of a single end-to-end function that implements the functional cycle of logistics.
In practice, integrating all logistics within an enterprise is quite difficult. An intra-company supply chain involves many different activities, all types of operations, using different systems and widely dispersed geographically. The solution may be gradual integration, built over time. For example, one department can gradually begin to deal with all issues of placing orders and receiving raw materials and products. Another department - take over all issues related to delivery finished products to customers. Some businesses choose to stop the integration process after reaching this level, and so they operate with two functions:
* materials management - a section connected to production and responsible for the flow of incoming raw materials and the movement of materials from one operation to another. The controlled movement of material flow in the integrated “supply - production” system is defined by the concept of “material and technical support for production”;
* physical distribution - a section linked to marketing and responsible for the outgoing flow of finished products.
Despite the existing signs of integration with production, and they are characteristic not only of physical distribution, but also of material management, in general this approach retains the separation of the functions of supply and sales, which can only be overcome in one way - by combining two functions into one, responsible for all movements materials at the enterprise level.
Despite the obvious benefits of intra-company integrated logistics, when trying to implement this approach, as a rule, some difficulties arise. They stem from the fact that managers in the field of logistics and other related fields, for example, marketing, must solve a rather difficult problem - to overcome the “parochial” thinking characteristic of relatively isolated functional divisions of enterprises. They must learn new ways of working and establish new relationships with each other, creating a culture based on teamwork and collaboration rather than pursuing their own goals and conflicting with each other. Senior managers in this situation must play the role of cross-functional coordinators.
Internal integration should be facilitated by mastering the practice of accounting and analysis of general logistics costs. In the traditional approach, each cost element was considered separately from the others, and therefore it was believed that a reduction in costs for one of the accounting items should automatically lead to a reduction in overall costs. But in the 60s. last century, enterprises began to systematically approach logistics and analyze the interdependencies between certain types activities. It became clear that reducing costs in one of the logistics processes sometimes leads to an increase in costs in another, in the same way, overall logistics costs can be reduced, although costs in individual processes can increase. It is known, for example, that air freight is significantly more expensive than rail freight, but faster delivery eliminates the need for inventory and warehouse maintenance, resulting in greater savings.
An important advantage of integration is access to information and general systems management. To do this, managers need to have a well-functioning technology for collecting, storing, analyzing, distributing and presenting information for a variety of purposes: from operational to strategic. The solution to this problem is many large enterprises are found in the creation of corporate intranet-type networks, although in lately The Internet is increasingly being used to effectively transmit logistics information. Information must enter the control system, which evaluates current circumstances, makes the necessary decisions and obtains appropriate results. Thus, an information system can, for example, show that inventory is being used slowly, and a control system can use this information to place orders with suppliers in a timely manner.
Practice has confirmed that if each enterprise is limited only to performing its own operations, then inconsistencies arise in external interactions, including in the form of a mismatch in logistics capacities, which interfere with the progress of material flow and increase costs. Intercompany integrated logistics helps eliminate bottlenecks and improves the entire supply chain.
Intercompany integrated logistics is understood as ensuring interconnections of all types throughout the supply chain logistics activities between participants, which are performed in concert in the form of a single end-to-end function until the final need is satisfied.
Intercompany integrated logistics embodies two important rules:
* for maximum satisfaction of the end consumer, enterprises operating within the same supply chain must cooperate;
* enterprises in the same supply chain must compete not with each other, but with enterprises operating in other supply chains.
The main advantages of intercompany integrated logistics are as follows:
* the ability to exchange information and resources between enterprises;
* lower costs resulting from balanced operations, lower inventories, fewer forwardings, economies of scale, elimination of activities that wasted time or did not add value;
* improved performance through more accurate forecasts, better planning, more productive use of resources, more informed prioritization;
* improvement of material flow, as integration allows it to be moved faster and more reliably;
* better customer service associated with reduced order fulfillment time, faster delivery and more complete consideration of individual consumer requests;
* higher flexibility, allowing enterprises to respond more quickly to changing conditions;
* the ability to achieve compatibility in the use of standardized procedures, which eliminates duplication of efforts, transmitted information and operations performed during planning;
* stability of product quality indicators and a smaller number of inspections as a result of the implementation of integrated quality management programs.
The benefits of intercompany integrated logistics seem obvious, however, as in the case of the development of intracompany integrated logistics, enterprises face a number of difficulties, and relatively large ones. Thus, many of them distrust others in the supply chain and are therefore wary of sharing information. But even with a sufficient level of trust, problems may arise due to differences in development priorities, the use of incompatible information systems, different levels of professional training of personnel, a special approach to security issues, etc.
The most difficult problem that arises when organizing intercompany integrated logistics is to overcome the traditional view of other enterprises as competitors. When a business pays money to its suppliers, managers assume that they can only benefit at the expense of the other party. In other words, if a company makes a good deal, in their opinion, this automatically means that the supplier is losing something; conversely, if the supplier makes a good profit, this is a clear sign that the company is paying too much. Building relationships on categorical “either-or” principles does not have long-term prospects for business development. For example, if suppliers set strict conditions and do not receive guarantees of repeat business, then they do not see the need for cooperation and try to get as much as possible big profit during a one-time sale. In turn, customers do not feel loyalty to such suppliers and try to find best option transactions, constantly reminding suppliers that they have competitors. Under such circumstances, each side pursues its own autonomous line of behavior, is guided only by its own interests, and solves only its own problems. As a result, changes in the terms of a transaction sometimes occur quickly and unilaterally, with the other party receiving notification at the last moment. There is uncertainty regarding the number of orders and their volumes, suppliers and customers are constantly changing, types of products and working conditions with them change, the time between orders becomes unstable, there are no guarantees for repeating orders, costs for the same orders can vary significantly.
Such problems can be avoided if the management of enterprises realizes that in their own long-term interests it makes sense to replace conflicting relationships with agreements. This requires a major transformation in business culture based on the understanding that intercompany integrated logistics brings benefits to all supply chain participants.
There are several main ways for enterprises to cooperate to organize intercompany integrated logistics. The simplest of them is maintaining joint business. In this regard, the experience of Japanese firms that create so-called “keiretsu” - groups of enterprises working together, but without a formal partnership, is of interest.
Today, “keiretsu” are the largest financial, industrial and trading conglomerates, which are of decisive importance for the Japanese economy. Their formation followed the concentration of commercial and industrial groups (“sogo sesha”) around the Fue, Daiichi, Sanwa and Tokyo Banks by implementing a strategy of consolidation within the groups and expanding mutual participation in capital while increasing the volume of transactions between group firms. Analysts argue that “the concentration of production, capital and modern technologies in functionally integrated conglomerates, keiretsu helps reduce costs by increasing labor productivity and capturing economies of scale; There is intense rivalry between groups (“excessive competition”) in all areas, which stimulates the desire to penetrate new markets.”
Informal agreements provide certain advantages to the parties due to their flexibility and the absence of obligations to take any action. However, this also entails a disadvantage, which is that each party can terminate cooperation without warning the other party, and at a time that suits only it to the greatest extent. This is why many businesses choose to enter into more formal agreements with written contracts that set out the scope of each party's obligations. Such formal agreements have the advantage that they fix the basic parameters of cooperation, so that each party knows with certainty what it must do. At the same time, there are also disadvantages - loss of flexibility and the need to carry out actions under more stringent conditions. The most common types of formal agreements include: alliances, joint ventures, etc. In agreements providing for cross-shareholding, intercompany integrated logistics is ensured by financial integration, which creates the preconditions for its convergence with intracompany integrated logistics. Complete transformation occurs in cases of mergers and acquisitions.
The basis for cooperation in implementation management functions determines the availability of general information. Without active participation in the exchange of information, not limited to the boundaries of the enterprise, but covering all parts of the supply chain, cooperation in these chains will be incomplete or will cease altogether. Information sharing is a fundamental building block that characterizes strong supply chain relationships.
Along with information exchange, management personnel, who must work together in an atmosphere of trust, mobilizing common knowledge, become an effective factor in cooperation. An example of active interaction between the parties is the use of the JIT-P concept, which provides for the placement of supplier employees in the customer’s offices. This technique creates a higher level of trust between the parties, since everyday personal contacts help eliminate any hidden inconsistencies and remove artificial barriers to confidentiality. It also helps the supplier and customer respond more quickly to emerging problems and opportunities.
The best performance of supply chains is achieved when enterprises focus their cooperation on the use of modern technologies and thereby contribute to the development of integrated logistics on an innovative basis.
Rice. 6.1
2. Current system (pull system), in which objects of labor are supplied to the technological site as needed. It helps reduce inventory while increasing production flexibility (Fig. 6.2.).
Rice. 6.2
This system involves receiving products from the previous site as needed. The central control system does not interfere with the exchange material flows between different sections of the enterprise, does not set current production tasks for them. In industrial enterprises, only the final assembly line has a plan, and from here information about the need to produce the necessary parts is sent to previous sections through special cards. The site plan is formed every day, which ensures the flexibility of the system.
Particular attention is paid to production logistics principles of organizing the production process, namely:
1)
ensuring rhythmic coordinated work of all production units according to a single schedule and uniform production. Rhythmic work involves the organization in time and space of individual, partial and private processes into a single continuous production process, ensuring the timely release of each specific product in established volumes with minimal costs production resources;
2)
ensuring maximum continuity of production processes. Continuity lies in the movement of objects of labor and the loading of jobs. The general optimization criterion is that the minimum cost of production resources in non-line production conditions can be ensured by organizing continuous loading of work stations, while in line production - choosing an option with minimal time for inter-operational tracking of parts;
3)
ensuring maximum reliability of planned calculations and minimal labor intensity of planned work. The following problems need to be resolved:
· shortage of production capacity;
· suboptimal production schedules;
· long production cycle times;
· ineffective inventory management;
· low equipment efficiency;
· deviations from production technology;
· sufficient flexibility and maneuverability in achieving the goal in the event of various deviations from the plan;
· continuity of planned management;
· compliance of the operational production management system with the type and nature of a specific production;
· straightness;
· proportionality, i.e. ensuring equal throughput of different workplaces of the same process, as well as proportional provision of workplaces with information, material resources, etc.;
· parallelism;
· concentration of homogeneous objects of labor in one place.
11.Features of the stages of logistics development and the functions that they performed during this period of their development.
The first stage (60s of the XX century) is characterized by the use of a logistics approach in managing material flows in the sphere of circulation. During this period, two key provisions are formed:
1) existing, as if separately, flows of materials in production, storage and transportation can be interconnected by a single management system;
2) integration of individual functions of physical distribution of materials can provide a significant economic effect.
Problems of optimizing physical distribution have been solved before. For example, optimizing the frequency and size of delivered batches, optimizing the placement and operation of warehouses, optimizing transport routes, schedules, etc. However, traditionally these tasks were solved separately, which could not provide the appropriate systemic effect.
The specificity of the logistics approach is the joint solution of problems of managing material flows, for example, the joint solution of problems of organizing the work of a warehouse and associated transport.
At the first stage of development of logistics, transport and warehouse, previously connected only by loading and unloading operations, become closely connected. They begin to work towards one economic result according to a single schedule and a single agreed technology. The container in which the cargo is sent is selected taking into account the specifics of the transport, in turn, the characteristics of the transported cargo determine the selection of transport. Other tasks related to organizing the transport and warehouse process are also solved jointly.
The second stage (80s) is characterized by the expansion of the integration basis of logistics. Logistics began to cover the production process. During this period the following occurs:
– rapid increase in the cost of physical distribution;
– growth in the professionalism of managers who manage logistics processes;
– long-term planning in the field of logistics;
– widespread use of computers to collect information and control logistics processes;
– centralization of physical distribution;
– clear definition of actual distribution costs;
– identification and implementation of measures to reduce the cost of moving material flow to the final consumer.
Production planning begins to connect to the interaction of warehousing and transportation, which has made it possible to reduce inventories, improve the quality of customer service through timely fulfillment of orders, and improve the use of equipment.
The third stage relates to modern times and can be characterized as follows:
– fundamental changes are emerging in the organization and management of market processes in the global economy;
– modern communication technologies, which ensure the rapid passage of material and information flows, allow monitoring of all phases of product movement from the primary source to the final consumer;
– industries that provide logistics services are developing;
– the concept of logistics, the key point of which is the need for integration, is beginning to be recognized by the majority of participants in the supply chain, production and distribution;
– the set of material-conducting entities acquires a holistic character.
12.Describe the basic principles of logistics.
The basic rules of logistics can be formulated as follows: the right product of the required quality in the right volume is delivered at a certain time and place with minimal costs.
1. The principle of rationality. A characteristic feature of the development of an enterprise’s logistics system is the choice of the most suitable logistics system option. Management decisions are selected that are optimal based on a set of indicators for the given conditions. The goal is not to find a better solution than the existing one, but to find the best solution possible. The decision is always made in such a way that, thanks to the chosen option, i.e. thanks to the chosen cost ratio and achieved result, rational achievement of the set goals was carried out.
2. The principle of emergence. The larger the logistics system of an enterprise, and the greater the difference in size between the part and the whole, the higher the likelihood that the properties of the whole may differ greatly from the properties of the parts. There may be a discrepancy between the local optima of the goals of individual parts and the global optimum of the goal of the enterprise’s logistics system. The sum of optimal decisions made by employees of individual departments does not guarantee optimization of the logistics system of the enterprise as a whole. Emergence (integrity) is the property of a logistics system to perform a given target function, implemented only by the system as a whole, and not by its individual elements
3. Systematic principle. It assumes an approach to the logistics system as an object represented by a set of interconnected private elements, the implementation of which ensures the achievement of the desired effect in the required time frame, with the necessary labor, financial and material costs. The principle of systematicity involves the study of a logistics object, on the one hand, as a single whole, and on the other hand, as part of a larger system in which the analyzed object is in certain relationships with other systems. Thus, the principle of systematicity covers all aspects of an object and subject in space and time.
4. The principle of hierarchy. Hierarchy is the order of subordination of lower elements to higher ones according to strictly defined steps and the transition from the lowest to the highest level. At lower levels, more detailed and specific information is used, covering only certain aspects of the functioning of the logistics system. Higher levels receive generalized information characterizing the operating conditions of the entire logistics system; at these levels decisions are made regarding the logistics system as a whole.
5. The principle of integration. Integration is the combination of any parts or properties into a whole. The principle is aimed at studying the integrative properties and patterns in logistics systems Oh. Integrative properties manifest themselves as a result of combining elements into a whole, combining functions in time and space. A logistics system, as an ordered set of elements with certain connections, has special system properties that are not inherent in individual elements and allow for a synergistic effect. A synergistic connection is a connection that, through the joint actions of independent elements of the logistics system, provides a total effect that exceeds the sum of the effects of these elements acting independently, i.e. strengthening the connection between system elements.
· specifics: clear definition of a specific result as the goal of moving the flow in accordance with technical, economic and other requirements; implementation of movement with the lowest costs of all types of resources; management of logistics by accounting and costing departments or structural bodies, the results of which are measured by the profit received;
· constructiveness: flow dispatching, continuous monitoring of the movement and changes of each flow object and prompt adjustment of its movement; thorough identification of the details of all logistics operations and transportation of goods;
· reliability: ensuring reliability and safety of traffic, redundancy of communications and technical means to change the flow path if necessary; widespread use of modern technical means of movement and traffic control; high speeds and the quality of information received and the technology for processing it;
· options: the ability of the company to respond flexibly to fluctuations in demand and other disturbing influences of the external environment; targeted creation of reserve capacities, the loading of which is carried out in accordance with the company’s previously developed reserve plans.
13. Describe the basic principles of building an information logistics system.
In accordance with the principles of the systems approach, any system must first be studied in relation to the external environment, and only then within its structure. This principle, the principle of consistent progression through the stages of creating a system, must also be observed when designing logistics information systems.
From the perspective of a systems approach, three levels are distinguished in logistics processes.
First level- a workplace where a logistics operation with material flow is carried out, i.e. a cargo unit, part or any other element of the material flow is moved, unloaded, packaged, etc.
Second level area, workshop, warehouse where cargo transportation processes take place and workplaces are located.
Third level- a transportation and movement system as a whole, covering a chain of events, the beginning of which can be taken as the moment of shipment of raw materials by the supplier. This chain ends when finished products enter final consumption.
In planned information systems, problems are solved that connect the logistics system with the total material flow. At the same time, end-to-end planning is carried out in the “sales-production-supply” chain, which makes it possible to create an effective production organization system built on market requirements, with the issuance of the necessary requirements to the logistics system of the enterprise. In this way, planned systems seem to “link” the logistics system into the external environment, into the total material flow.
Dispositive and executive systems detail planned plans and ensure their implementation on individual production sites, in warehouses, as well as at specific workplaces.
In accordance with the concept of logistics, information systems belonging to various groups are integrated into a single information system. There are vertical and horizontal integration.
Vertical integration The connection between the planned, dispositive and executive systems through vertical information flows is considered.
Horizontal integration the connection between individual sets of tasks in overhead and executive systems through horizontal information flows is considered.
In general, the advantages of integrated information systems are as follows:
o the speed of information exchange increases,
o the number of errors in accounting is reduced,
o the amount of unproductive, “paper” work is reduced,
o previously separate information blocks are combined.
When building computer-based logistics information systems, certain principles must be observed.
1. The principle of using hardware and software modules. A hardware module is understood as a unified functional unit of radio-electronic equipment, made in the form of an independent product. Module software can be considered a unified, to a certain extent independent, software element that performs a specific function in general software. Compliance with the principle of using software and hardware modules will allow:
o ensure compatibility of computer technology and software at different levels of management;
o increase the efficiency of logistics information systems;
o reduce their cost;
o speed up their construction.
2. The principle of possibility phased creation systems.
Logistics information systems built on a computer basis, like others automated systems control systems are constantly evolving systems. This means that when designing them it is necessary to provide for the possibility constant increase number of automation objects, the possibility of expanding the range of functions implemented by the information system and the number of tasks to be solved. It should be borne in mind that determining the stages of creating a system, i.e., choosing priority tasks, has a great influence on the subsequent development of the logistics information system and the efficiency of its functioning.
3. The principle of clearly establishing the junction points.“At the junction, the material and information flow crosses the boundaries of authority and responsibility of individual divisions of the enterprise or across the boundaries of independent organizations. Ensuring smooth crossing of junctions is one of the important tasks of logistics.”
4. The principle of system flexibility in terms of the specific requirements of a particular application.
5. The principle of acceptability of the system for the human dialogue user-car".
Logistics presupposes the presence of stable economic ties between participants in the distribution of goods. Only regular business partners have the necessary transparency of cost accounting systems, and it becomes possible to develop and apply coordinated technologies for processing cargo and information.
At the end of the 90s. the centrifugal sentiments generated by the privatization strategy are beginning to give way to a conscious desire for integration economic activity various trade structures within the framework of general organizational forms.
Highlight external and internal factors development of integration in the industry.
^ Factors external to trade, stimulating the development of integration processes in the industry:
Market uncertainty; - falling demand for various reasons; - aggravation of the problem of sales of goods; - numerous complications on the way of movement of goods to consumers caused by the underdevelopment of the trading infrastructure.
^ Internal factor integration in trade, i.e. The main intra-industry motive is increased competition, even in its undeveloped forms.
Taking into account the analysis of global trade practice, it is assumed that integration processes in trade will take place against the background of the emergence of such types of associations as: - chain trade organizations; - cooperative associations of trade structures; - voluntary wholesale and retail chains.
From an organizational and economic point of view, the development of various forms of integration of trading enterprises will make it possible to: - reduce overhead costs through the introduction of centralized management services, centralization of supply transport and accounting functions; - make purchases in large quantities on favorable terms of payment and delivery;
Use the latest information technologies to manage the network and create information data banks on the range of products sold; - support domestic manufacturers by giving them priority deliveries, etc.
The increasing complexity of market relations and increased competition in the book business have led to a decrease in the stability of enterprise development. The rate of change in consumer demand for book goods is growing, their range is increasing, and decreasing life cycle goods, i.e. The operating environment of enterprises is becoming increasingly uncertain and difficult to predict. One of the ways to operate effectively in such an environment is integration and coordination of actions with business partners.
Integration is one of the components of logistics methodology. The idea of integration follows from the essence of the main object of logistics - economic flow. Organizing traffic according to the flow principle requires coordination of the actions of the participants in this movement, since optimization of one section of the movement may not give the expected results due to the fact that it is not consistent with the capabilities of other sections. Flows connect partners involved in organizing their movement and require joint coordinated actions that minimize losses that arise when flows cross the boundaries of logistics systems.
The need and possibility of integration processes in the book market are also determined by the rapid development of computer information systems.
Thus, there are the following areas of integration:
· coordination of flows at all stages of their promotion to the final consumer based on the requirements of final buyers;
· integration of economic flows different types;
· technology integration, used by participants in the process of movement of book products.
The success of integration processes is possible if the following requirements are met:
· information openness of business partners;
· strict compliance with the requirements of each subsequent link supply chain to the results of the work of the previous link;
planning coordination collaboration;
· development of standards and other documents unifying requirements for work results.
The main circumstance preventing integration is the increased interdependence of firms, the fear of loss of independence, loss of control over those operations of the movement of goods in which they will participate or which are transferred to partners. This can only be countered by developing the information openness of companies, including by creating and improving integrated information support for the entire movement of book products (electronic databases, electronic communication systems, allowing, for example, to track the route of transportation of goods in real time).
15 Supply chain and marketing channel
Supply Chain Management(English) Supply Chain Management, SCM) as a scientific discipline studies the resources of industrial, logistics and trading enterprises, as well as the decisions made by people in relation to the processes of inter-organizational interaction for the transformation, transformation and use of these resources along the entire length of the value chain from sources of raw materials to the final consumer. From a practical point of view, it is a systematic approach to the integrated planning and management of the entire flow of information, materials and services from the end consumer through factories and warehouses to suppliers of raw materials.
Supply Chain (Process Understanding)(English) Supply Chain) is a set of flows and corresponding cooperation and coordination processes between various participants in the value chain to meet consumer requirements for goods and services.
Supply chain (object understanding) is a set of organizations (manufacturers, warehouses, distributors, 3PL and 4PL providers, forwarders, wholesale and retail trade) interacting in material, financial and information flows, as well as service flows from sources of raw materials to the final consumer.
...the difference between the supply chain and the marketing channel is that the marketing channel focuses only on existing products, and the supply chain has the ability to redesign (production - Y.L.) products and processes (logistics - Y.L.) so that movement along the entire chain was more even and smooth.”
Marketing channel (sales channel) is a system of economic institutions and organizations that ensures the availability of the company’s product to consumers, i.e. a distribution system that ensures the availability of a product to the consumer during the selection process, physical receipt of the product by the consumer and payment for it. May also be called distribution channels, sales channels, distribution network, etc.
Marketing channels- This is the most stable element of the marketing mix. Their construction is a long-term and resource-intensive process, so any major change to them requires large investments and efforts. This makes them significantly different from any other element of the marketing mix, which can be manipulated much more quickly.
When building a system of marketing channels, the company’s marketing must take into account many factors, the main ones being:
· characteristics of end consumers - their number, concentration, average one-time purchase, income level, etc.;
· the capabilities of the company itself - its financial situation, competitiveness, main directions of marketing strategy, scale of production;
· product characteristics - type, average price, seasonality of production and demand, requirements for maintenance, shelf life, etc.;
· degree of competition and sales policy competitors - their number, concentration, sales strategy and tactics, relationships in the sales system;
· characteristics and features of the market - actual and potential capacity, customs and trade practices, density of distribution of buyers.
16 Content of the concept of logistics and its application in business activities, goals and objectives of logistics
Logistics- a profession whose subject is the organization of a rational process of promoting goods and services from suppliers of raw materials to consumers, the functioning of the sphere of circulation of products, goods, services, management inventory and provisions, creating a commodity distribution infrastructure. A broader definition of logistics interprets it as the study of planning, management and control of the movement of material, information and financial resources in various systems. From the perspective of organizational management, logistics can be considered as strategic management material flows in the process of purchasing, supplying, transporting, selling, and storing materials, parts and finished inventory (equipment, etc.). The concept also includes the management of relevant information flows, as well as financial flows. Logistics is aimed at optimizing costs and rationalizing the process of production, sales and related services both within one enterprise and for a group of enterprises.
Problems solved by logistics
1. choosing the type of vehicle;
2. determination of routes;
3. organization of cargo transportation;
4. packaging of goods in containers;
5. inventory management;
6. responsible storage in warehouse areas;
7. marking;
8. formation of group orders;
9. customs services
Logistics goal- providing the consumer with products at the right time and place with minimal costs for logistics operations and production resources used. Logistics manages physical distribution and material resources. Physical distribution management consists of reducing the costs associated with moving finished products from the place of production to the place of consumption and storing them in accordance with the required level of quality of customer service. Material resource management consists of effectively meeting the organization's needs for production resources. When managing a logistics system, three main concepts of a systems approach are used:
10. 1) concept of total costs;
11. 2) the concept of preventing sub-optimization;
12. 3) the concept of financial exchanges.
13. Four conditions that must be met
14. to achieve the main goal of logistics:
15. 1) supply of the required product of a certain quality in the required quantity;
16. 2) the time specified in the contract;
17. 3) specific place of delivery;
18. 4) minimizing total costs.
19. The object of study of logistics is material and accompanying material (information, financial, service) flows, without which material production is impossible.
20. Species logistics flows:
21. 1) informational and material;
22. 2) transport and human;
23. 3) financial and energy, etc.
24. Logistics subject of study- optimization of material, information, financial, service flows that support the production and commercial process, carried out from the perspective of a single whole, i.e. minimizing costs throughout the entire logistics system, and not in each individual element (chain, block).
25. Logistics tasks determined depending on its application:
26. 1) reserves (planning, formation and provision of necessary material reserves);
27. 2) transportation of products (determining the type of transport, vehicle, choosing a forwarder, transportation route, planning delivery costs and monitoring);
28. 3) warehousing (planning warehouse space and placement of warehouses, their quantity, placement of products in them, management of warehouse logistics operations, processing, sorting, packaging, etc.);
29. 4) information support (collection of information on the movement of material and other flows).
supply of products. This task is closely related toCurrently, in the West we have reached a point in the organization of production itself, when the increase in the volume of information and the level of its processing are no longer able to significantly improve production performance, and the question of further improving the information base of production from this point of view becomes meaningless. The future is seen in the integration of information systems at the level of a company or a separate group of companies. To solve such problems, information logistics provides new opportunities through which all the necessary information is organized in accordance with the principles developed by logistics into a strict system. Its main function is to receive, process and transmit information in accordance with the tasks assigned to this system.
Domestic, and in some cases foreign practice shows that, despite significant investments in the development of transport and storage facilities made in recent years, the expected return is not always achieved. The infrastructure complex, having high potential efficiency, often, however, does not live up to the hopes placed on it. Passive accumulation of capital, poorly integrated with the main production and sale of products, leads to the fact that approaches based on the extensive factor of further development are sooner or later exhausted. What is required is a concept based on new principles and deeply scientific basis, - logistics concept.
It allows us to consider any object of research in logistics as an integrated logistics system, even when it consists of separate, relatively disconnected subsystems. Due to the fact that the main characteristic feature of logistics systems is the close interconnection of all its elements and parts, a systems approach when analyzing production and circulation processes, developing appropriate solutions and their implementation means taking these interrelations into account. The study of individual economic objects or phenomena is based on what they represent component more complex structures or processes. Establishing the role of each of these parts in the effective functioning of the whole determines the corresponding set of measures to consolidate it. The systems approach helps to consider the object under study as a complex of interconnected subsystems, united by a common goal, to reveal its integrative properties, internal and external connections. Mathematical analysis of economic processes confirms the possibilities and conditions for the overall optimization of both the structural parts of the system and the logistics system as a whole. The most important pragmatic application of the systems approach in the field of management is the development and implementation of integrated logistics programs.
At the international and especially transcontinental level, the principles and approaches of logistics are implemented taking into account the specifics of the functioning of the markets of the countries participating in the logistics system. In addition to other advantages, due to the integrated logistics service, it is possible to overcome numerous difficulties and barriers associated with the economic and legal features of international trade relations, unequal conditions for the supply of goods, different levels of service and information support, transport legislation, customs procedures etc.
However, the closest connection between logistics and production is objectively. And not only with the units directly supervising this process, but also with the corresponding planning services. Such integrated relationships are predetermined.
By now, a fully meaningful and complete result of the evolutionary development of logistics in practical implementation is the formation of integrated logistics systems at the level of individual leading enterprises. Objectively demanded, evolutionarily recognized in its necessity and feasibility and gradually implemented in practice, cross-functional logistics integration of adjacent interconnected elements and flow processes at individual enterprises is quite logical at the appropriate stage of logistics development to cover all logistics functions at enterprises. The results of the implementation of logistics management of goods distribution processes at individual enterprises can be the minimization of their distribution costs, reduction of inventories, synchronization and optimization of volumes of goods flows. The presence of integrated material flow management systems at enterprises contributes to the effective implementation of time-demanded progressive methods of organizing product distribution,
processes of commodity distribution at trading and intermediary enterprises can be identified as a result of systemic integration of procurement, sales, warehousing, transportation and other processes covered by logistics at a higher level - as a result of inter-company logistics integration, contributing to the formation of an additional system-wide effect.
Thus, significant reserves for increasing the efficiency of product distribution processes at trade and intermediary enterprises can be identified as a result of systemic integration of procurement, sales, warehousing, transportation and other processes covered by logistics at a higher level - as a result
Attitude to marking Formation of an integrated marking complex that ensures end-to-end information support material flow Formation of a system for labeling goods and services that ensure the effectiveness of logistics operations as a system. Labeling - a practical logistics toolkit Labeling as marketing support for a business process. Ensuring the safety and quality of goods and services. Environmental safety
This chapter examines the objectives of the marketing channel and why managers choose to use a third party when selling products to customers. In it, we will analyze the criteria that are used in developing channel strategy and consider the issues of marketing channel management: selection, motivation, evaluation and control over channel participants. In addition, we consider how marketing channels are changing as integrated vertical, horizontal and multi-channel networks grow. Finally, the chapter addresses key logistics decisions that determine distribution costs and customer service levels.
One of the employees of the logistics department should probably participate in clarifying the edition of the instructions for rationing inventories and working capital, as well as acceptable coefficients for unevenness of deliveries by volume and intervals, since this department is responsible for the formation of the logistics environment and building an integrated supply chain.
This approach, which is sometimes called corporate logistics, is based on the idea that it is advisable for each company, and in some cases for the industry, to separate production and trade from distribution, taking into account integrated planning, by transferring all or part of the logistics functions into the hands of specialized companies, owning the entirety of accumulation, storage and marketing of information. Leave to one side the calculation of needs and resources, equipment, production, capital, personnel, and to the second to assign the purchase of materials and energy, storage, transportation, sales management, recycling and waste disposal.
However, to generate alternatives, the strategic planning process also interfaces with many other organizational processes. One large computer company What each management team does is ask it to come up with a list of alternative business models when it submits its long-term plans to corporate headquarters. Each such business model details how the business unit can operate differently from others, i.e. shows how a company could develop new products or manage integrated logistics completely differently, or how it could create a network of relationships with new suppliers, technological structures and distribution channels. Consequently, each business model becomes a source of creating new strategic alternatives.
Vertically integrated (most Russian commodity companies, especially oil, as well as many metallurgical companies) Their unique cost leadership is ensured not by operational efficiency, but by lower prices in Russia for energy resources and labor. The problems of strategic planning here reflect the need to have a complex logistics system to ensure a balance of internal product flows between processing stages. Moreover, even a small change in market conditions for any of the processing stages can cause disruptions along the entire chain.
Bowersox Dopila J., Kloss David J. Logistics, integrated supply chain / Transl. from English, M. ZAO Olymp-Business, 2001. 640 p.
It is interesting to compare domestic data on reserve dynamics with similar foreign data. A recent monograph, Logistics Integrated Supply Chain 2, written by two American professors from the University of Michigan, D. Baursock and D. Closs, provides similar data on changes in the share of inventories in the US gross domestic product over a nearly thirty-five-year period. Having abandoned the previously traditional approaches to managing supply processes, production, sales, etc., when each of these processes was managed not comprehensively, but separately and independently of each other, American firms (companies, etc.) have achieved significant success in reducing the cost of holding inventories and their share in annual sales, as well as the American economy as a whole, but reducing the relative share of inventories. The transition to logistics approaches to management in American firms (companies, etc.) made it possible to reduce the share of inventories in the US gross domestic product from 29% (1959) to 18% (1994) [see. 131, p. 232]. 4 The largest share in the working capital of industrial enterprises was occupied by working capital invested in production inventories - about 53-60% (see Table II). The structure of industrial inventories consisted mainly of raw materials, basic materials, components and purchased semi-finished products, which amounted to about 27-40% (see Table II). The value of production inventories was approximately 4.5 times greater than sales inventories and almost 3 times greater than the backlog of work in progress. It should be noted that in those years the national economy developed an insufficiently mobile structure of reserves - small sales reserves and significant production reserves. Abroad (in Japan, the USA, etc.), when introducing logistics management methods, the main attention was paid to reducing production inventories.
Bowersox D.D., Class D.D. Logistics Integrated supply chain. M. ZAO Olimp-Business, 2001.
BowersoxD. J., Klass D.J. Logistics integrated supply chain/Translated from English. M. Olimp-Business, 2001.
However, in economic practice, the integration of activities related to the implementation of material flows is not always economically feasible. Not every integration process has a logistical basis. Logistics integration is the process of combining the activities of various enterprises in order to increase the efficiency of their joint functioning through optimization based on the use of logistics properties within the framework of their joint work, the parameters for the implementation of functional flow processes. In this regard, logistically integrated enterprises should be considered those enterprises united in any form, the functioning of which is based on the principles of logistics using its optimization properties in order to achieve greater efficiency than with independent activities, assessed according to some reason that is reasonable from the point of view of logistics. criterion.
The object of study of logistics is material and corresponding financial and information flows. On their way from the primary source of raw materials to the final consumer, these flows pass through various production, transport, and warehouse links. With the traditional approach, the tasks of managing material flows in each link are solved, to a large extent, separately. Individual links represent so-called closed systems, isolated from the systems of their partners technically, technologically, economically and methodologically. Management of economic processes within closed systems is carried out using well-known methods of planning and management of production and economic systems. These methods continue to be used in logistics and material flow management. However, the transition from the isolated development of largely independent systems to integrated logistics systems requires expanding the methodological basis for managing material flows.
In the hands of the reader is the second revised and expanded edition
Integrated logistics applies concepts TQM, JIT, KANBAN, LP, SCM etc.
TQM (Total Quality Management)- total quality management is a concept continuously developing over time, defining competitive quality in the absence of limits to its improvement. TQM integrates both the technical side of quality provided by ISO-9000 standards, and integration with all logistics partners and, above all, with consumers.
JIT (just in time)- the concept (technology) of building a logistics system or organizing the logistics process in a separate functional area, ensuring the delivery of material resources, work in progress, finished products in the right quantity to the right place and exactly on time. The application of the just-in-time concept allows you to reduce inventories, reduce production and warehouse space, improve the quality of products, reduce production times, use equipment efficiently, and reduce the number of non-production operations.
System JIT originated in Japan in the mid-1970s. at Toyota and is currently used with great success in many economically developed countries.
Essence of the system JIT comes down to refusing to produce products in large quantities. Instead, continuous-flow object production is being created. At the same time, supply production workshops and plots is carried out in such small batches that it essentially turns into piecework. This system considers the presence of inventory as a fact that makes it difficult to solve many problems. Requiring significant maintenance costs, large inventories negatively affect the lack of financial resources, agility and competitiveness of the enterprise. From a practical point of view, the main goal of the system JIT are the elimination of any unnecessary costs and the effective use of the production potential of the enterprise.
The main provisions of the philosophy of just-in-time technology:
- 1) any remnants of inventories are evil, since they are dead (virtually useless) and require additional costs for their warehousing and storage;
- 2) breakdowns and downtime of production equipment should be kept to a minimum;
- 3) production must be stopped if defects or missing components are detected.
System JIT more linked to demand than the traditional "throwing products on the market" method. This system operates on the principle of producing products only when they are needed, and only in the quantities required by the buyer. Demand follows products through the entire production process. Each operation produces only what is required for the next. Production process does not begin until a signal is received from the site of the subsequent operation to begin production. Parts, assemblies and materials are delivered only at the time of their use in the production process.
System JIT provides for a reduction in the size of processed batches, the practical elimination of work in progress, minimizing the volume of inventory and the fulfillment of production orders not by months and weeks, but by days and even hours. This also simplifies the system production accounting, since it becomes possible to account for materials and production costs on one combined account. At the same time, the use of a separate account to control warehouse stocks of materials loses its relevance.
Application of the principles JIT leads to better quality production, better service and better pricing.
Thus, it can be concluded that the potential benefits of the//G system are numerous. The main ones include the following.
Firstly, its use leads to a decrease in inventory levels, which means less investment capital into inventories. Because this system requires a minimum amount of materials to be available for immediate use, overall inventory levels are significantly reduced.
Secondly, under the conditions of using the system JIT there is a reduction in the order fulfillment cycle and an increase in the reliability of its execution. Which in turn contributes to a significant reduction in the need for safety stock, which represents additional commodity units of inventory retained to avoid possible shortages. The production schedule within the planned production perspective is also reduced. This allows you to gain the time necessary to respond to changes in market conditions. Producing products in small batches also helps achieve greater flexibility.
Thirdly, when using this system, there is an improvement in production quality. When the quantity ordered is small, the source of quality problems is easily identified and adjustments made immediately. Under these conditions, employees of many companies have a greater understanding of the importance of quality, which leads to improved production quality in the workplace.
Other advantages of the system JIT may include: reduction of capital costs for maintaining warehouses for stocks of materials and finished products; reducing the risk of inventory obsolescence; reduction of losses from defects and reduction of rework costs; reducing the volume of documentation.
The use of the considered model in domestic organizations to meet the needs of managers in adopting effective management decisions about the type, price, cost, composition and distribution routes of products contributes to the further improvement of production and commercial activities organizations.
Many researchers note that the concept JIT is aimed at synchronizing the work of all price elements, at early identification of requirements for the shipment of goods to orders, and ensuring the strictest discipline in contractual relations. To prevent the accumulation of excessive inventories, on the one hand, and to optimize overall logistics costs, on the other, the task of searching for cargo consolidation receives priority. Instead of delivering small quantities from different suppliers at precise times, orders fulfilled by different suppliers should be combined into one delivery. To apply the technology JIT it is necessary to create the closest possible relationship between buyer and supplier in terms of information exchange and coordination of plans; Requirements for the quality of supplied materials and components are also increasing.
Rice. 4.3.
Modern management practice is characterized by an intensive transition from the management of individual logistics functions or operations to the management of business processes, more adequate objects of the concept of integrated logistics. The logistics business process is understood as interconnected set operations and functions that transform the company's resources into results determined by accompanying flows. This result is usually determined by key logistics factors, such as total costs, order fulfillment time, quality of customer service, etc.
To improve operational efficiency, a company should be viewed not just as an established structure, but as a system of interconnected business processes aimed at achieving strategic, tactical or operational business goals.
The main problem in the concept under consideration is to determine the client’s needs for logistics services and to include in the logistics process only those operations/functions that actually ensure the fulfillment of these needs with minimal expenditure of resources. This raises the problem of determining the basic level of customer service. Key consumers may be offered a level of service slightly higher than the basic one. At the same time, logistics services above the basic level are called “value-added logistics.” Such service is unique by definition and is provided to special (VIP) consumers in addition to the company's basic service programs.
The drive for integration in logistics arose with the belief that integrated performance produces results superior to those that could be achieved by performing separate independent functions that exist in relative isolation. The challenge is to recognize and act on the real interdependence of logistics elements. The logistics orientation of systems necessitates such recognition and requires the logistics manager to develop logistics strategies by properly designing them to support the accomplishment of enterprise objectives. Such an approach should acknowledge the changing and contrasting goals of the various functions that are carried out in unified system(enterprise). Finance, as a necessary component of the system, may have the goal of reducing the amount of cash tied up in assets, such as large equipment. An equipment manager, on the other hand, may prefer to have a significant amount of equipment available so that service requests can be quickly completed.
The role of the integrated logistics manager is to resolve these types of conflicts. Managerial intervention should be aimed at a compromise resolution of conflicts, in which the goals of functional units within the enterprise may have to be adjusted (optimized) for the benefit of the company.
Integrated logistics combines activity logistics and systems logistics into an interconnected whole that maintains a balance between acceptable levels of performance and realistic financial expectations.
Action logistics is a combination of two independent but interconnected actions: logistics actions (operations) and logistics coordination. Logistics activities are related to the movement and storage of enterprise resources, while logistics coordination associated with the identification of these resources.
The movement and storage of necessary resources can be linked to the system concept of the firm. The input component of the firm is responsible for acquiring the resources or raw materials that are required for the process. The acquisition of these materials must be preceded by the selection of their source or sources. The selection criteria are:
A. The ability of the source to meet the firm's requirements.
B. The location of the source relative to the firm.
C. Availability of suitable transport channels.
D. Reliability of the source.
The selection of the source must be accompanied by the movement of material into the company. Materials management must include ensuring that the material is stored from the time it is received until it is used in the process.
The material received at the input of the company can now be used to produce finished products. While the input material is converted into the final product, the semi-finished products exist within the firm. These semi-finished products are controlled through the so-called intra-company movement. This function also entails the need for storage, since partially finished products may have to be stored until they are needed in subsequent stages of production.
The end result of the technological process is the finished product. Created products, with the exception of rare types such as custom construction, require storage until requested by the customer. After sales, physical distribution of products becomes another logistics function. However, logistics does not end with the distribution of products to the customer. Consider, for example, a product sold under warranty. If the product is a car, then if it is defective it must be repaired or returned. This action represents a reverse flow through the distribution channel.
Very closely related to logistics activities logistics coordination. While logistics activities deal with the movement and storage of items within the enterprise, through the enterprise, and outside the enterprise, logistics coordination is intended to determine the need for these logistics activities. As in logistics activities, the determination of movement and storage needs is easily viewed through the system model of the firm.
The output component of the system model is configured to product market forecasting, for a preliminary assessment of the demand for manufactured goods. Forecasting, or the process of predicting future events through the systematic analysis of current data, is intended to greatly extend the simple forecast of the quantity of a product required for a given period of time (usually one year). Forecasts of future demand must also consider potential changes in that demand. For example, there is a relatively small but steady year-round demand for toys to celebrate birthdays, special occasions and general gift giving. But it is known that there is a predictable increase in this demand before the Christmas holidays.
The input component also relies on forecasting product demand to identify material requirements that can be converted to supply demand for finished products. The movement and storage of materials in the company delays the satisfaction of the need for finished goods for a certain time, approximately equal to the duration of their transformation. The material must, however, be requested by the company in advance of the required date. The amount of this advance time is approximately equal to the transportation time plus the time to place an order and the time to process the cargo. The corresponding activity during this time is often referred to as materials requirements planning (MRP). (MRP can also be extended to cover the entire process, in which case it is called production planning resource.) Hence the process of “entry - transformation - exit” of the company - an activity referred to as operational planning. Operations planning attempts to combine the firm's capabilities with its desires.
The industrial capabilities of any firm are limited and can only be expanded within strict limits in the short term (for example, through judicious use of overtime or additional shifts). The manager must recognize these limits and refrain from overextending the firm's resources.
System logistics integrates the elements of logistics activities (material movement and storage, work in process, and finished goods) and extends the process to encompass the logistics elements that provide support subsequent to product distribution. These logistics elements include reserves and spare parts, personnel and their training, technical instructions, testing, support equipment and facilities.
As an illustration of logistics support following production, consider the ever-increasing complexity (degree of integration) of the consumer market. Take, for example, the production of VCRs or personal computers. Is it reasonable to assume that the enterprise's obligations end with the physical distribution of the completed product to the consumer? Of course not! The company must (either itself or through independent intermediaries) provide support for elements of the logistics system.
The main and significant difference between action logistics and systems logistics is the predictability of action logistics as opposed to the random nature of systems logistics. The demand for any given product can be predicted with reasonable accuracy through the application of sophisticated market forecasting techniques. The demand for a product is directly related to the demand for the materials used in creating that product. This same predictability is not, however, true for systems logistics. Failure of a finished product is random and predictions within this range must be based on probability theory and statistics.
The main element of system logistics support is spare part. Without spare parts to replace those parts that are broken or suspected of breaking, the mechanism quickly becomes inoperable. Breakdowns create demand for spare parts, but breakdowns are random events. Thus, the resulting demand for spare parts is also random. The random nature of the backup process, however, does not eliminate the need to provide and distribute discrete quantities. How then will their required quantity be determined and how will they be distributed?
The number of spare parts required to maintain a given unit is determined by: (1) statistical analysis expected failure rate, (2) the time to repair a broken unit, (3) the total number of units supplied, and (4) the average time between requesting a spare part and receiving it (transportation or assembly line time plus preparation and handling time). The analysis must be done before the need arises.
Another element of system logistics is technical instructions. Instructions must be developed to support the finished product effectively and efficiently. Depending on the complexity of the product being serviced, instructions can range from a one-page brochure to a multi-volume library of technical references. The content of the manual can range from a simple maintenance manual to a detailed description of procedures for installation, identification of failure and damage to insulation and their repair. Maintenance instructions must include identification of parts and appropriate use tools and testing equipment. All instructions and procedural data must be appropriate to the user's capabilities.
The main purpose of support is installation, maintenance and repair of the unit. This action can be facilitated by test and support equipment that is selected or designed to maintain the original parameters. Test and support equipment can be, and often is, more complex than the unit being serviced. The combination of selection, quantity and timely delivery of this test and support equipment is another element of system logistics.
Personnel represent the most expensive element of system logistics. This cost can, however, be minimized through careful selection and training of support personnel. The training process must be designed in accordance with manufactured products, technical documentation, equipment spare parts, testing and support equipment.
The last element that makes up the logistics of systems is funds. A package of logistics resources cannot be considered complete until the funds necessary to provide logistics support have been acquired. The funds may be of a new or modified structure. First, a survey of existing facilities is necessary. The survey results are then compared with logistics support requirements. Any shortfall between what is available and what is needed must be made up through the cost-effective use of resources.
The concept of integrated logistics support began to be applied relatively recently in enterprise activities, despite the fact that logistics itself has been used for thousands of years. The latest leap forward in logistics has been driven by the need for improved efficiency at lower costs. This was made possible by a large array of technological advancements. The application of management disciplines promises huge dividends for decades to come.
The logistics of existence affect the basic needs of life. The logistics of action includes the logistics of existence and adds subtlety to life. Operational logistics deals with the movement and storage of materials within the firm, semi-finished products through the firm, and finished products out of the firm.
Systems logistics concerns the logistics of activities and elements required in supporting the subsequent distribution of products, such as reserves and spare parts, personnel and training, technical instructions, test and support equipment and facilities.
Logistics management is the art of using logistics resources to ensure economical and efficient achievement of logistics objectives. Logistics goals can be defined as having the right quantity, the right unit, in in the right place, at the right time. Logistics management can be facilitated by a systems approach in which the firm is viewed as a system. The firm, when viewed as a system, includes an input, a transformation process, and an output. It consists of interconnected and interacting components and functions as a single whole.
Thus, the purpose logistics is to develop a logistics system that ensures the desired fulfillment of logistics goals at the lowest possible cost. Within this context, the logistics challenge is to strike a balance between efficiency and cost that optimizes enterprise objectives.
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