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HPS 2406: Logistics Management Notes

Institution: University

Course: Bachelor of Supply Chain Management

Posted By: csolutions24

Document Type: PDF

Number of Pages: 44

Price: KES 1200

Views: 112     Downloads: 0


According to the Council of Logistics Management (CLM) “Logistics is the process of planning,
implementing and controlling the efficient and effective flow of goods, services and related
information from point of origin to point of consumption in order to meet customer
1. Rapid Response: Rapid response is concerned with a firm’s ability to satisfy customer’s
requirement in a timely manner. Instead of stocking the goods and supplying on
demand, orders are executed on shipment-to-shipment basis. Here IT helps to postpone
the logistical operations to the latest possible time and then execute rapid delivery as
when needed by customer.
2. Minimum Variance: Variance is any unexpected event that disrupts system. Logistical
operations are disrupted by events like delays in order receipt, disruption in
manufacturing, goods damaged at customer’s location and delivery to an incorrect
location etc. Traditional solution to deal with variance was to keep safety stock or use
high cost transportation. Such practices were expensive and risky and thus have been
replaced by information technology to achieve positive logistics control.
3. Minimum Inventory: The objective of minimum inventory involves asset commitment
and inventory turnover. Asset commitment is the financial value of inventory developed
throughout the logical system and inventory turnover is the rate of inventory usage over
time. The objective is to reduce the inventory without sacrificing customer satisfaction.
4. Movement Consolidation: One of the most significant logistical costs is transportation.
Transportation cost depends on type of product, size of shipment and distance.
Movement consolidation means grouping small shipments together in order to reduce
transportation cost.
5. Quality Improvement: Logistics is a prime part of developing and maintaining
continuous TQM improvement. If the quality of product fails, logistics will have to ship
the product out of customer’s premises and repeat the logistical function again. This
adds to cost and customer dissatisfaction.
6. Life-Cycle Support: Life cycle support is also called cradle-to-cradle logistical support. It
means going beyond reverse logistics and recycling to include the possibility of after sale
services, product recalls and product disposal. This means that firms must consider how
to make a product and its package (cradle) and the how to remake and reuse them (to
cradle). E.g. Cold drink industries use their glass bottle again and again whereas the cans
are reused in making pf paper dishes.

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