Logistic management is the part of supply chain management that plans, implements, and controls the efficient, effective, forward and reverse flow of goods, services, and related information to meet the needs of customers between the point of origin and the final point of consumption.
Highways, roads, bridges, airports, ports (mass transit), water supply, water resources, solid waste treatment, waste water management, and electric power generation and transmission are all examples of infrastructure. Telecommunications and hazardous waste management are also included. Infrastructure development is critical in analyzing the growth process; hence, proper and suitable infrastructure allows economic activity at a cheaper cost. Infrastructure and logistics’ go hand in hand. States and institutions that make a provision for investment in infrastructure do improve the flow of goods and services between their customers and suppliers. Logistics therefore describes ways in which low cost, timely efficient operation works out.
Logistic is therefore the coordination of complex operation that aid the movement of supplies to the final consumer. This can be viewed at the point of production to the retail centre. It is people centered since it depend s on the presence of physical structures that are vital to the operations. The logistics of physical items (food, material, liquids, animals, equipment, abstract items that may include time and information) does the integration of information flow, production, handling of material, inventory, transportation, warehousing and security.
Logistic activities and fields
There are 2 forms of processes in logistic: inbound logistic which is the primary process concentrating on the purchasing and arranging the inbound movement of materials, parts and the finished products from the suppliers to the distribution chain. Out bound logistics is the process that deals with the storage and movement of the final product from the production line to the final consumer.
The major fields of logistics are as follows: procurement, distribution, after sale service, disposal logistic, green logistic, reverse logistic, global logistic, domestic logistic, concierge logistic, RAM logistic, asset control logistic, POS emergency logistic, production logistic, construction logistic, capital project logistics and digital logistic.
Procurement logistic are activities that may include market research, planning, supplier management and ordering. Minimizing the procurement cost while maximizing security within the supply process is key and not losing focus on the autonomy of the organization.
Distribution logistic whose main objective is to deliver the final product to the consumer. This may include the processing of orders, warehousing and transportation
Disposal logistic whose main function is to reduce logistic cost while enhancing services that are related to the disposal of waste that is produced during the operation of the business.
Reverse logistics are all operations that relate to the reuse of product and materials. This may include the management of surpluses and goods that are returned to vendors by the buyers. It is the process of moving goods from the final destination with the sole purpose of capturing value or proper disposal.
Green logistics are all the attempts that are made with a view of measuring and minimizing the ecological impact of logistic activities.
RAM logistic which is also referred to as logistic engineering and it combines both the business logistic and military logistic for its involved with highly complicated technological systems where reliability, availability and maintainability are key.
Asset control logistic which are also known as humanitarian logistics. This are specific time critical modes of transport used to move goods swiftly in case of an emergency. This can result from a production delay, telecommunication failure. Emergency logistic services are typically sourced from specialist provider
Logistic Automation
This is the application of computer software and automated machinery in order to improve the efficiency of logistic operation. Machinery can be used to identify product s through the Bar Code or RFID technologies. Bar codes information is stored as a sequence of black and white bars and may differ in width, and when scanned is translated into a digital sequence, then converted into a decimal number or other data. This can be transmitted through a radio frequency? (RFID tag) which contains a memory chip and an antennae that transmits signal to a reader.
Site: A mall specifically Walmart
In relation to this the site identified is a shopping mall and to be specific Walmart Inc.
Sam Walton opened the first Walmart discount city store in Rogers, Arkansas in 1962.Walmart went public in 1970 and established its headquarters and distribution center in Bentonville, Arkansas. At the time sales topped 44 million dollar and had a work force of 1500 employees spread in 38 stores.
The reason for Walmart’s success comes from a strategy that focused on laser like precision on the radical re invention of distribution and transportation logistics. Distribution and transportation is very successful where senior managers take this component of the organization as a competitive advantage and not a necessary evil or just an afterthought. This has been achieved through capital investment. In Walmart spending money on distribution has continually demonstrated that it lowers cost.
Distribution technology
Walmart has a private satellite network. This has given the company a significant logistical advantage over its rivals. It allows Walmart to communicate instantly with the head quarter and track inventory and sales changes in real times.
Once you purchase an item at Walmart, the headquarters take notice and the system modulates the stock replenishment orders which is based on the purchases and those of other customers across its entire sales network. This has resulted in the development of a vaunted “big data” sales forecasting models. This helps to predict what to stock and in what quantities and also to react quickly to take advantage of sales spurts
Remixing strategy for fast selling items
Walmart has moved toward a fast/slow distribution strategy (remixing strategy).Fast selling items area stocked at a distribution center closer to the store while slower moving items are stocked far away. This reduces over the road transport miles which translates to a cleaner environment, a Walmart corporate strategic goal. It goes further to reduce chance of a customer finding a product out of stock
Walmart port of entry Import distribution centers
Walmart has import distribution facilities at 5 major us ports: Chicago; Norfork ,Virginia, Savannah, Georgia, Houston and California ;long beach. The containers from the inbound ships are offloaded to the adjacent Walmart import distribution center and the redistributed to the regional general merchandise distribution centers (GMDC).Centre point distribution centers; Products sourced from domestic suppliers that are less than track load (LTL) are delivered in center distribution centers which reduces inbound travel miles.
Walmart’s procurement
Walmart emphasizes the need to reduce purchasing cost and offer the best price to the customer. This is achieved through directly procuring from the manufacturers and passing all intermediaries. A purchase deal is finalized when research shows that the products being sourced aren’t available at a different supply chain at a lower price. A significant amount of time is invested in meeting vendors and understanding their cost structure through a transparent process thus ensuring that the retailer is certain that manufacturers are aiming at cutting down costs. Computer systems (EDI) are connected to those of the suppliers. This enables the suppliers to download purchase orders along with the store sales information in relation to the products that they supply.
Walmart has a fast and responsive transport system and have committed and dedicated drivers who are focused on customer service.
Inventory management
Walmart has invested heavily on information technology and communication system. This enhances the tracking of sales and merchandise inventories. Stores manage their own stock, reducing pack sizes across many product categories and giving timely price mark downs.
Employees in the store have the “magic wand” This is a hand held computer which is linked to the in store terminals through a radio frequency. These assists in keeping track of the inventory in the store, deliveries and also the backup merchandise that is stocked at the distribution centers.
The point of sales (POS) system was used in order management and store replenishment of goods. This makes it possible to monitor and track the sales and merchandise stock levels on the store shelves. A retail link system is in place. This is an IT system that quickly locates and replenishes goods at the store. The retail link is connected to Walmart EDI network with an extranet that is accessible to Walmart suppliers
Collaborative planning forecasting and replenishment (CPFR) is in place. Walmart works with the suppliers on a real time basis using the internet to jointly determine product wise demand forecasting.
RFID technology (Radio frequency identification) is now replacing the bar code technology. This will have the effect of reducing its supply chain management costs and enhance efficiency. Through this technology, employees will no longer have to physically scan the bar codes entering the store hence have the ripple effect of saving on labor cost and time thus reducing the instances of stock-outs at the store.
Conclusion
The gravitational pull of globalization which can be summed up as new trading partners, cheaper supply sources and cheaper emerging markets is forcing organizations to come together through forming alliances and online commerce systems that will efficiently and effectively deliver their products to the consumer while also providing a worldwide view of operations. Traditional organizations are developi9ng new ideas for keeping track of orders, react to changes in real time while handling the transportation of materials. The objective is to link the sales production and delivery process electronically allowing the flow of information across different regions. This will enhance in decision making, reduce costs and facilitate information sharing
Extranets is an inexpensive way of utilizing the global nature of the internet while ecommerce based collaboration will indicate how orders will be fulfilled in the next century. Internet is facilitating doing business in the remote area of the world and the advantage that large multinational companies used to enjoy especially on the movement of goods is being challenged.
Logistic system must integrate a solution that is automated in dealing with customers in the field of managing documents and ordering. It is also necessary to monitor inventory, track shipments and have proper way of handling payments.
Dynamic decision opportunities (DDO’s) are the logistics wholly grail. A collaborative e-commerce system with visibility into the supply chain can be used to make recommendations on revised inventory movement and operational changes.
In the future, strategic decisions will be based on up to date, real time, logistical events. This will be shared along the value chain through the internet. More and more companies will be commoditized and their commercial success will be based on branding efficiency and the economical response to the consumers changing trends.
A number of conclusions can be drawn right from observing the product flow management. Focus is mainly directed towards supply chain management which focuses on realizing opportunities from the integrated management of product flow process done between functions and channel; members. The idea of lowering costs through the inclusion of a system in decision making is in itself not new.
Logistic is a subset of supply chain management, though its scope is been limited to the boundaries of the function within a firm focusing on activity administration. Logistics supersedes physical distribution. Purchases and production are now being considered within the scope of supply chain management. Even though the supply chain management (SCM) is promoting integration, coordination, collaboration and relationship building in the supply channel, SCM is currently taking a small degree.
Managers should begin to document the benefits of SCM and properly measure them, this will be through techniques and tools needed to achieve the benefits being well refined. Collaboration and coordination should be the key to achieving the benefits of the supply chain. Logistic and SCM will continue growing in importance and relevance as organizations continue to pursue outsourcing, expanding their operations internationally.
A revenue generation strategy in regard to the supply chain will be equally important just as the cost reduction strategy. Supply chain strategies will be viewed as a means of generating revenues just the same way marketing strategy, advertising, product mix and pricing is viewed. Information sharing is likely to continue with advancing technology and maybe referred to as coordination’s, compromise and cooperation.
There is a high probability that operations, purchasing and logistics will merge in organizations and be under the supply chain banner. Since the scope of supply chain management is broad it will impact on the organization within a business model.
Why logistic management
As a part of the supply chain management, its plans, implements and controls the flow and storage of goods and services in order to meet customers’ needs. It has a direct influence on a company’s bottom line. Meeting customer demand and providing superior service, creating visibility, advanced transportation management systems(TMS) do analyze the historical data and tracking of real time movement of goods into and out of business. Proper logistic management will increase the bottom line. Improved customer service will improve a company’s reputation thus generating more income.
References
Yam, K.L, John Wiley & Sons (2009) Encyclopedia of Packaging technology.
Cozzolino Alesssandra, (2012) Humanitarian Logistics and Supply Chain Management, In Humanitarian Logistics, Springer Berlin Heidelberg
Mallik, Susan. (2010)
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Waters D., Logistics, Palgrave Macmillan? (2013): An introduction to supply chain management
Hayes, Thomas C. Company News; (2015) Wal-Mart Net Jumps by the New York Times
Frank, T.A. (April1, 2006).A brief History of Wal-Mart
Mitchell, Stacy (November 7, 2012) Wal Mart’s Greenwash: Why the Retail Giant is still unsustainable.
