Role of Logistics in Supply Chain | Supply Chain Management

Logistics management is  known as the segment of supply chain management which task is to plan, execute and control the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to fulfill customer's requirements.

Role of logistics in supply chain management-Texpedia

Seven R's of Logistics:

  1. Right Product
  2. Right Quality
  3. Right Condition
  4. Right Place
  5. Right Time
  6. Right Customer
  7. Right Price
Logistics Function:
  1. Transportation: Many modes of transportation play a bit part in the movement of goods through supply chains: air, rail, road, water, pipeline. Picking the most efficient merger of these modes can measurably boost the value generated for customers by lowering delivery costs, improving the speed of delivery, and reducing damage to products.
  2. Warehousing: When inventory is not on the progress between locations, it may have to employ some time in a warehouse. Warehousing is known as the ventures related to obtaining, storing, and shipping materials to and from production or distribution locations. 
  3. Third- and fourth-party logistics:
    Like other stands of supply chain management, the various logistics functions can be deployed to firms that specialize in some or all of these services. Third-party logistics providers (3PLs) actually perform or run one or more logistics services. Fourth-party providers (4PLs) are logistics experts and act the bit part of general contractor by getting hold of  the entire logistics function for an organization and synchronizing the combination of divisions or subcontractors to perform the specific tasks involved. 
  4. Reverse logistics (or the reverse supply chain)
    A new scope of supply chain management is reverse logistics, or how best to drive the return, reuse, recycling, or disposal of products that make the reverse journey from the customer to the supplier. This business can be lifted at a loss, or it can actually become a profit center.
Logistics Value Proposition:
The logistics value proposition comes from a especial commitment of your firm to an individual customer or select group of customers. The value stands from your capability to find exactly how to balance logistics costs against the proper level of customer service for each of your key customers.
So you need to determine the exact recipe and proportion of ingredients in order to meet a particular customer’s logistical expectations and requirements. How will you know when you’ve got the right balance? If you keep in mind that logistics must be directed as an integrated attempt to achieve customer satisfaction at the lowest total cost, then it makes sense that service and cost minimization are the main elements in this proposition.

In the most of the cases, the cost-benefit effect of a logistical failure is directly related to the importance of the service to the customer. When a logistical failure will have a notable impact on a customer’s business, error-free logistics service should receive top priority. Such service hints that the customer order was complete, delivered on time, and consistently correct over time.

Cost Minimization:
The second component of the value proposition is cost minimization that should be simplified as the total cost of logistics in order to be exact. It have to be kept mind that the total of all logistical costs should be minimized and not be used on cost reductions in one area alone.

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