Logistics and operations management - Essay Example

Download file to see previous pages... The fundamental elements of logistics are the inventory management, capacity management and scheduling of deliveries, such that the consumers will have the desired products in their rightful quantities at the time they need to have them (Brandimarte & Zotteri, 2007:47).
Therefore, on the event that the three fundamental components do not work in sync, chances are high that there will be inconveniencies caused to the intended consumers of the commodities, while at the same time there will be losses incurred by the suppliers of the consumption commodities. The whole chain of the logistic process starting with inventory management, through to capacity management and then to the delivery of the products to consumers must be systematically interconnected. The three components must remain in balance, since the success of one component determines the success of the subsequent process and ultimately the overall success of the logistical supply chain (Zavoral, 2010:5). Thus, on the event that the three components are not in balance, detrimental effects will occur both on the supplier and the consumers in terms of high costs, quality issues and market loss.
High cost of commodities is a major consequence that might result out of an imbalance in the fundamental logistic components. Both oversupply and undersupply of commodities comes with associated costs (Christopher, 2010:36). Inventory management, as the first stage of logistics, is involved in the planning of inventory such that the there is balancing of the costs of maintaining additional inventory with the risks of not having the commodities when the consumers need them (Wu, 2008:16). Therefore, the inventory maintained by a logistical system must be capable of meeting the known and the unanticipated demands of the consumers, while ensuring that the costs involved are minimized to the lowest level possible. This can only be possible if the capacity management ...Download file to see next pagesRead More