ASSIGNMENT

WHAT IS BUSINESS LOGISTICS? HIGHLIGHT THE KEY POINT OF

LOGISTICS IN SUPPLY CHAIN MANAGEMENT

SUBMITTED BY:
MUHAMMAD AHMED
MUHAMMAD MAAZ JAMAL
ARSALAN SADIQ
HAFIZ DANIYAL AHMED
AGHA AUN ALI
SUBMITTED TO: DR. MUHAMMAD SIDDIQUE
BUSINESS LOGISTICS:

Business logistics is a business planning framework that is concerned with

material procurement, materials management and overall inventory control.
Business logistics is an activity that takes goods from source to destination
location. A business logistics system is considered to be effective if it helps to
reduce the carrying and storage costs of inventory and increase profits flow in the
organization.

It is the complete distribution control of inventory, from its procurement to its

point of consumption.
In other words, it’s the workflows and oversight of an item as it moves from initial
production and procurement to its final usage application and consumption,
typically in the hands of a consumer.
Business logistics involves multiple domains or processes. Business logistics
implementation, therefore, focuses on making these multi-step, end-to-end
inventory flows more efficient, cost-effective and convenient for its parent
organization.

Importance of Business Logistics

Business logistics includes the inbound as well the outbound movement of
inventory and supplies. It estimates the demand of the organization, the
requirements of the organization for the project in hand, it decides the sources of
procurement of material and the method of procurement of materials, it
exercises control over the physical movement of inventory between departments
and is also concerned with the process of storing the inventory at various stages
so as to achieve an optimum level of demand and supply and reduce costs. It is a
larger concept than distribution management as it includes the task of forecasting
and procurement also.
It combines physical distribution and materials management apart from dealing
with the process of procurement.
Business logistics comprises of processes like:
1. Coordination of project requirements
2. Procurement of inventory
3. Control over the physical movement of inventory, and
4. Storage of raw materials, semi-finished products and finished goods so that
optimum demand supply equilibrium is reached at minimum costs.

Organizations can choose to either handle the essentials of business logistics

entirely in-house, or outsource process domains to a third-party business logistics
partner (3PL). Depending on the nature of your inventory, the scale of your
business and the fluidity of your cash flows, a 3PL provider may be more
beneficial than keeping all business logistics in-house. Continue reading for more
on this 3PL option.
BUSINESS LOGISTICS STAKEHOLDERS

The key stakeholders of business logistics are:

1. Shippers: These are the users or customers who want to use the business
logistics services.
2. Suppliers: The companies which provide logistics services based on the goods,
services, and inventory type volume etc.
3. Transport carriers: The type of transportation which are required to transport
the goods i.e. railway, airways, roadways, waterways, pipeline etc.
4. Warehousing: These are stakeholders in the logistics cycle which provide
options to store goods in warehouses.
5. Freight forwarders: Companies which plan, schedule, operate & coordinate
movement of goods.
6. Terminal operations: These stakeholders in logistics enable operations at docks

Business Logistics Activities

Some of the main activities which are covered in logistics management are:
1. Determining location of plant, factory, warehouses etc.
2. Plan layouts & geography of distribution centers.
3. Selection of transportation mode like air, rail, road, water, pipeline etc.
4. Evaluating shipment volume & which are most cost effective routes
5. Packaging, loading, unloading, distributing goods from source to destination
location.

Importance of Logistics

We can break down the importance of logistics in supply chain management into
a set of inbound and outbound domains, including the following.
● Material sourcing: The procurement and distribution of raw materials or
smaller, individual components that eventually get fabricated into a
finished product, thus triggering product flows into the rest of the business
logistics cycle.
● Transportation: The actual distribution and movements of goods between
locations, arranging both inbound and outbound transportation as well as
shipping methods, timeframes and any assistance from transportation
3PLs.
● Order fulfillment: The management and delivery of customer orders from
their points of purchase up to final delivery at the expressed point of
consumption. Order fulfillment often introduces unique software tools into
business logistics, including software and international order fulfillment
supply chains.
● Warehousing: The storage of goods across the entire supply chain
spectrum. Warehousing most often includes the physical infrastructure and
operations involved in ready-to-order inventory storage and merchandise
returns, streamlined in a comprehensive warehouse management system.
● Demand forecasting: The practice of preemptively managing the cycles of
consumer supply and demand, timing inventory flows to better match
seasonal shifts in consumer interest and order fulfillment rates.

● Inventory management: The day-to-day oversight of physical goods and

products handled across warehouses. Inventory management shares many
responsibilities and domains with order fulfillment and material handling as
well as demand forecasting, using inventory management systems and
order processing software to perform high-level executive inventory
operations.
● Supply chain management: A similar term that widens the lens to focus on
broader business practices and additional lateral operations that streamline
product flows and generate leaner bottom lines. Supply chain management
 strategies often complement and take on the overall essentials of business
logistics, though the two aren’t synonymous.

Logistics Management:-

Why is logistics important for business success? There are numerous benefits to
improving your organization’s business logistics strategies and maximizing its
product flows.
1. Enhances Visibility:
Business logistics managers have the duty of reviewing distribution and
transportation controls in a new, strategic lens. Distribution domains can often
get pushed to the side, particularly when organizations overcompensate on the
front-end design, testing and production of its goods. While these are vital
processes and essential to solidifying brand market share, businesses must still
face the reality that if they can’t get those superiorly tested and designed
products or services to customers in a timely, efficient and cost-effective way,
they won’t stay in business for long.
2. Reduces Overhead Costs:
Savvy business logistics strategies help trim the fat on many previously
overlooked carrying and storage expenses. Through domains like inventory
management and demand forecasting, organizations can tailor far more strategic
inbound and outbound shipping schedules, shipping methods, routes and more,
which in turn allows money to be saved or allocated elsewhere. Key overhead
costs reduced through business logistics efforts include:
● Storage and inventory holding calculations
● Purchasing expenses
● Per-unit production costs
● Fixed-asset expenses, such as warehouses, vehicles, etc.
● Total supply chain expenditures
All the while, business logistics improve:
● Cash flows
● Order fulfillment rates
● Delivery times
● Net profits

3. Better Manages Physical Resources

Resource distribution and management is a defining variable in your
organization’s competitive edge. The more cost-effective you can move and store
your raw materials and completed products alike, the more profit you put back in
your pocket. Leveraging your organization’s physical resources — from storage
warehousing and equipment to other fixed-assets like delivery vehicles — ensures
you’re using product flow resources to the best of your abilities.

4. Improves Your Customers’ Experience

Consumers cite a few essentials when it comes to ordering products that ship
directly to them: ease of browsing, safe payment methods, positive product
reviews and the overall quality of a good or service upon arrival. They also
frequently say how crucial it is to have a swift and straightforward experience
receiving their ordered goods or services — they want their orders arriving
promptly and on time, plus expect clear communication from your organization
the moment they place that order to the second they sign off on its package.
When your organization fails to meet these delivery expectations, customer
satisfaction can hemorrhage. It’s the role of business logistics to ensure that
doesn’t happen.

HIGHLIGHT THE KEY POINTS OF LOGISTICS IN SUPPLY CHAIN MANAGEMENT

Supply chain management (SCM) is one of the main ways to optimize the budget
of enterprises producing goods and/or services. At the same time, a great role in
the supply chains is played by logistics - the management of physical,
informational, and human flows in order to optimize them and avoid unnecessary
waste of resources.
If we systematize all areas of logistics that need to be developed for the rational

management of production resources, we can single out the following functions:

● Warehouse design and management. This role of logistics in supply chain

management covers several tasks at once: from the design of storage
facilities to the requirements for storage of products and ending with the
introduction of various automation solutions (for example, for machinery
intended for transporting goods within warehouses);
● The formation of packages: Packaging, tracking and accounting - all of
these tasks allow for end-to-end control of goods on the way to the
customer/distributor;
● Transportation of products. This includes work with cargo carriers and
vehicles listed in the company's fleet: planning their routes, calculating fuel
costs, etc.;
● Working with customs: When an enterprise plans international delivery of
goods, it is very important that during their transportation the goods fully
comply with customs requirements and contain all the necessary
documentation:
● Working with intermediaries. Intermediaries in logistics are all third-party,
non-company resources that are directly involved in the implementation of
supply chains. In turn, finding intermediaries with the most acceptable ratio
of quality to cost of services, as well as establishing long-term, reliable
relations with them are also included in the list of tasks for efficient logistics
management;
● Working with written off and returned goods: There is also such a thing as
“reverse logistics”, which establishes the rules and routes for transporting
the returned/discarded goods, as well as ways to dispose of them.
Given the above list of tasks that logistics performs in supply chain management,
we can single out a number of advantages provided by its correct
implementation:
● Minimization of enterprise expenses: - The main role of logistics in supply
chain management is primarily to increase the overall value of each
 delivery, which is identified by customer satisfaction. This means that the
reduction and optimization of labor resources must be tied in with keeping
up a certain level of quality customer service. This problem is solved both
by reducing the total labor resources (primarily by eliminating unnecessary
chain links), and by introducing automation solutions.

● Improving the quality of service: - With regard to the quality of service, it is

largely influenced by the speed of delivery of the goods to the end-user, as
well as its transportation in proper conditions (for example, many products
today are supplied with RFID tags so that both the manufacturer and the
end customer could track whether all storage conditions are being
observed during the transportation of the goods) and within the allowed
time limits (this refers primarily to perishable goods)

● Minimization of the need for intermediary services: - Intermediary

services (transportation, storage, marketing, recycling, etc.) take up the
lion's share of the cost of the implementation of supply chains. Experienced
logisticians plan routes so as to minimize the need for involving third-party
services for efficient logistics management.

● Supporting goods with the necessary documentation: - Insurance and

support of documentation are two fundamental tasks of logistics, solving
which helps to eliminate any problems associated with legal restrictions in
the storage, transportation, and marketing of goods;
● Timely response to changing market demands: - Advanced logistics
scenarios also help to quickly adapt to changing market requirements and,
thereby, maintain top positions against the backdrop of competitors and
remain in demand for the target audience.