Components of the Logistics Management Cycle - Assignment Example

Logistics Management Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 12th August, 2012. Logistics management The field of logistics management has undergone various changes over the years this is mainly attributed to the growth as well as the adoption of ICT system such as the GPS and GIS transport management systems. The adoption of such systems have really changed the way in which companies manages their supply chains. There are large quantities of resources that are moved in and out of any organization. For example the organization may get certain raw materials from the company’s suppliers and deliver the finished goods/ products to the consumers. Logistics execute this function. Thus logistics management is termed as the part of the supply chain management in the organization that controls, plans and implements the efficient, effectual forwarding as well as reverse storage and flow of services, goods that other related information between the origin and the point of consumption or destination in the aim of meeting the needs of the customers. In simple terms logistics management is termed as all the logistics activities that act as the operational element of the supply chain such as the procurement of commodities, management of inventory, transportation management, quantification, reporting and the collection of data. Logistics management aims at offering the best level f services to the customers, reduce the cost of operations, maintain a high level of transparency in operations and ensure that the right quantity and quality of products are made available to the customers at the right condition and at the right place (John & Langley 2002, p. 3). Effectiveness of the supply chains ensure that all the commodities are secure and they also play a great role in determining if an organization will fail or succeed. Most decision makers direct most of their attention to the improvement of the logistics management in their organizations, this is improvement in logistics brings about important and quantifiable benefits to the organization. Well functioning logistics management systems are important in that: They increase the impact of the program in the organization Enhances quality Improves cost efficiency and effectiveness Components of the logistics management cycle There exist a number of companies that makes up the logistics management cycle. This essay aims at discussing in details the components of logistics management. The components of logistics management are: servicing of customers, quality monitoring, forecasting and procurement, inventory management, logistic information and product selection all of these elements tend to be interdependent with each other and thus for one component to be efficient it needs the assistance of the other components in the cycle (Murphy & Wood 2011, p 25). Quality monitoring Quality monitoring Quality monitoring Quality monitoring The diagram above clearly shows the major components of a logistics management cycle. Fig 1: components of logistics management Servicing customers This is termed to be among the most component of the logistics management cycle. Customer service is termed as the process through which an organization offers considerable value added reimbursement to the supply chain in the most cost effective manner. Customers are termed as the client of the organization and they determine what ought to be done within the logistics cycle. It offers an interface between logistics and marketing in that it determines the service expectations from their customers as well as their response, development of the standards of customer service, infrastructure requirements and customer service requirements. Customers orders need to be processed speedily and they also need to be delivered to the customer on time and in good condition (Paché 2007, p. 315). In relation to customer service certain systems need to be introduced so as to enable the customer/consumer to get all the required information about his/her order whiles the order is in transit. The methods of transportation that is been sued by an organization plays an important role in that it ensures that there is timely and accurate delivery of information to the customers in relation to the order. Additionally, logistics management ought to have various methods in place that will assist in handling returns as well as any defective merchandise. Such issues need to be investigated and addresser so as to ensure that there is customer satisfaction and at the same time a reduction in level of return merchandise. Product selection Product selection is seen as a critical step in relation to logistics management. Its purpose is mainly based on the selection of the most effective as well as cost efficient commodities that are available in the market and that will assist the organization in the achievement of their goals. When selecting the commodities there exist a number of factors that need to be considered, they include the following; The efficacy and safety of the commodities The cost of the product and the amount of money that is available to finance the procurement of the commodity The storage requirements of the commodity to be purchased aspects that can be considered under this category are aspects such as adequate storage space and favorable conditions to maintain the quality of the product The skills possessed by the personnel who will use the commodities Usability of the commodity Shelf life if the commodity The packaging of the commodity, the commodities need to be packaged in a way that makes distribution easier. Quality monitoring This component surrounds all the other components in the cycle and it is not only concerned with the products been delivered to the customer but it also deals with the quality of the information relied to the customers as well as the day logistics decisions that are made in the organization. Quality monitoring seems to be an important part of most logistics system since they describe how the system is operating and performing and it also enables to identify certain areas within the logistics management cycle that needs to be improved. As shown in the diagram above quality monitoring is mentioned at every stage in the cycle and it in itself suggests that monitoring of quality need to be included in every step I the logistics management cycle. Through monitoring of quality in the logistics cycle the customers tend to get their services and products when they need them. Quality monitoring also ensures that all the planned logistics activities are done according to the planned schedule. Monitoring also assists a lot in ensuring that all the records are correct and all the required reports are delivered to the line manager in a time manner and lastly monitoring ensures that instances of re-supply may be identified (Logistics Magazine 2012). Through evaluation the organization is able to make informed decisions relating to the operations as well as service delivery. Evaluation also ensures that their is most efficient and effective use of the firms resources, it also ensures that the manager are aware of the extent to which a certain project has achieved the desired impact and lastly evaluation assists in knowing the extent to which a project is on the right track and all the corrections that needs to be done. Several logistics management activities that need to be monitored and evaluated include: Right goods: Based on the required quantity Based on the customers requirement Right quantity Enough for the customer Right condition Desired quality Stored according to the specifications Right place Can be easily accessed by the customer Stored according to the specifications Right Time Available when needed Right Cost Affordability by both the client and program Modes of movement/pricing Right Customer The one caring about commodity security Forecasting and procurement Forecasting and procurement are closely related functions in regard to the supply chain functions. Forecasting is concerned with the estimation of the customer’s future consumption and it is seen as the first stage in the supply chain. Procurement planning is termed as the estimation of the required commodity while procurement on the other hand is more concerned with the identification of all the suitable resources of the supply and the acquisition of goods based on the procurement plans that have been put in place in the most economic manner and within the established standards in the organization. Organization needs for forecast accurately for future consumption (Tseng & Yue 2005, p. 1660). Inventory management This is another major component of logistic management. Inventory management is termed as the process of receiving, issuing, storing, ordering as well as distribution of the products to various locations. This process has certain components that are classified under it and they include the determination of order quantities, storage, issuing of commodities, receiving of commodities and records. In determining the amount of order to be ordered there is a need to establish what is currently available and this is usually done through physical inventory. It involves the counting of total number of commodities that are available by their type as well as the expiry date. Inventory management will assist a lot in the identification of any problems that may be there between actual supplies and what is recorded, the inventory also assist in detecting any supplies that are in the store and may be expired or are about to expire and it also assist a lot in knowing the amount of each commodity that the organization have (James & Lambert 2008, p. 77). At this stage the firm needs to takes certain measures so as to ensure that they do not have excess commodities are at times they lack some of the necessary commodities. The measures they ought to put in consideration are: The average consumption rate Months of supply on hand Minimum and maximum levels of stock The amount of quantity to be ordered Also when receiving commodities certain things have to be done and they include: Ensuring that issues tally with the indent Dispatched products are verified The receiving officer in the company checks the batch number as well as the expiry dates Commodities are arranged in different shelves or places in the store Updating of records Signing of issue vouchers and filing them Another aspect that falls under this category is the storage of received commodities. Commodities are usually stored so as to: Protect them from theft and damage Ease the accessibility when needed Ease the planning and monitoring Ensuring that there will be uninterrupted supplies When storing commodities in the store there are certain principle that need to be adhered to so as to make their work easier these principles includes but are not limited to: Fast moving commodities ought to placed in easily accessible places Commodities of the same type need to be stored in the same area All the expired commodities and the unusable ones need to be kept in a segregated place No commodity should be placed on the floor The other aspect under this category is the issuing of the commodities and record keeping. Different kinds of commodities will have different minimum as well as maximum MOS levels. A review of the issue voucher needs to be carried out so as to ensure the correctness of issues/ receipt voucher, correctness in the filling of the issue, correctness in the determination of the issue quantity and correctness of the referenced material (Hensher n.d., p.434)The last aspect in the inventory management is the keeping n of the record. Record needs to be kept so as to keep track of the firm’s activities. Some of the most common records that are kept are the; logistics record, consumption record and the stock keeping record. Logistic information This seems to be the centre of the logistics management cycle. Logistics information is seen as the engine that foster the whole logistic cycle. Organizations need to have accurate data utilization at the service delivery point level. They will also need to have adequate and correct information about the stock at hand at every storage facility that they own and they also need to be aware of any losses that may have occurred throughout the logistic system, all this will lead to the smooth running of the supply chain (Ho 1997, p. 79). For the process to run smoothly there needs to be a group of individuals tasked with the duty of responding to the information of all the commodities that are needed and money is also needed to make the process run smoothly. Conclusion The above discussion and the diagram state the main components of the logistics management cycle. The core components of the logistics management cycle as identified are the customer service, inventory management, quality monitoring, product selection, forecasting and procurement and logistics information. All the components work together in the achievement of the goals of effective and efficient logistic management in an organization and none of them can work without the help of the other. It is evident that quality monitoring is not left out at any stage in the cycle thus making it an important concept that all logistics managers need to look at. Thus manager ought to ensure that all the components in the cycle are working properly. References Ho, J 1997, ‘What can contemporary systems thinking offer to logistics management as a management discipline’, European Journal of Purchasing and Supply Management, Vol. 3, No. 2, 77-81. Hensher (eds.), Handbook of Logistics and Supply-Chain Management. Elsevier Science Ltd., UK, 431-439. James, S & Lambert D 2008, Strategic logistics management, McGraw Hill, New York. John J & Langley J 2002, Management of business logistics: A supply chain perspective, South Western College Publishing, New York. Logistics Magazine 2012, Logistics and Materials Handling, viewed 12th August 2012, http://www.logisticsmagazine.com.au/home Murphy, Jr, P. & Wood, D 2011, Contemporary Logistics, Prentice Hall, New Jersey. Paché, G 2007,’Slowness logistics: Towards a new time orientation?’, Time & Society September vol 16. Pp. 311-332. Tseng, Y & Yue, WL 2005, ‘The Role of Transportation in Logistics Chain’, Proceedings of the Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1657 – 1672. Read More