MODULAR LESSONS ON LOGISTICS MANAGEMENT

Module 1: Planning and Forecasting (5)

Introduction:
Logistics management is a critical component of any organization's success. It helps
ensure that goods and services are delivered efficiently and effectively to meet the
needs of customers or citizens. In the case of national government agencies in the
Philippines, logistics management is essential for ensuring the smooth operation of
various programs and services provided to citizens. This module will focus on planning
and forecasting in logistics management for these agencies.

Lesson:

1. Importance of Planning and Forecasting

Planning and forecasting are two critical components of logistics management. Planning
involves determining what resources are required, when they are needed, and how they
will be used. Forecasting involves predicting future demand for goods and services. Both
planning and forecasting are essential for effective logistics management because they
help organizations make informed decisions about resource allocation, inventory
management, and transportation planning.

2. Types of Planning and Forecasting Techniques

There are several types of planning and forecasting techniques that can be used in
logistics management. These include:

a. Last period technique - uses the demand for the last period as a forecast for
the next period.
Averaging technique - all past demand data are summed up and used as the
forecast of the next forecast demand.
Moving average - as we advance each period, the latest demand figure is added
to the running sums and the oldest demand subtracted.
Experimental smoothing method - estimate of demand for future period is equal
to the estimate of a permanent component of demand based on past data.

3. Applying Planning and Forecasting Techniques

To apply planning and forecasting techniques effectively, national government agencies

in the Philippines should follow these steps:

a. Identify the needs of citizens and stakeholders: National government agencies

should identify the needs and requirements of citizens and stakeholders to
determine what goods and services are required.
b. Analyze historical data and market trends: Forecasting can be used to analyze
historical data and trends to predict future demand for goods and services. c.
 Collaborate with suppliers and stakeholders: Supply chain planning involves
collaborating with suppliers and stakeholders to ensure that the entire supply
chain is working efficiently and effectively. Hence, supply officers must keep a list
of qualified suppliers.
d. Determine the most efficient modes of delivery: Transportation planning
involves determining the most efficient and cost-effective modes of transportation
for goods and services. Hence, planning must always include the modes of
delivery.

Conclusion:
In conclusion, planning and forecasting are essential components of logistics
management for national government agencies in the Philippines. By utilizing these
techniques, agencies can make informed decisions about resource allocation, inventory
management, and transportation planning to ensure that goods and services are
delivered efficiently and effectively to meet the needs of citizens and stakeholders.

Supplemental Materials:
Property and Supply Management Manual of the Commission on Audit

Activity Questions
1. Provide some key components of effective planning and forecasting in logistics
management? How do these components contribute to successful logistics
outcomes?
2. Discuss the challenges faced by your previous agency (BFP or BJMP) when it
comes to planning and forecasting for logistics management. What strategies can
be employed to overcome these challenges?
3. Create 12 consecutive months of inventory reports of a consumable good (ask the
PPSA Supply Officer for assistance on format). Use it as the basis for your
forecasting and planning. Make a request for the procurement of the goods
whose number must last for at least three months.
4. The medical office of PPSA is planning on requesting for the procurement of
medicines for the year 2024. How will the head of this unit have a foresight of his
needs for the future?
Module 2: Splitting of Purchases, Requisition, or Payment (5)

Introduction:
The procurement law in the Philippines aims to ensure transparency, accountability, and
efficiency in government procurement activities. One of the key provisions of the law is
the prohibition on the splitting of purchases, which refers to the practice of dividing a
large procurement project into smaller ones to avoid going through public bidding.
Additionally, requisitions and payment procedures must follow specific guidelines to
ensure compliance with the law.

Splitting of Purchases:
Splitting of purchases is prohibited under Republic Act No. 9184, also known as the
Government Procurement Reform Act. The law defines the splitting of contracts as "the
act of dividing a procurement contract into smaller amounts or portions, which may be
awarded to various suppliers, contractors, or consultants, with the end view of evading
the application of the procurement law and its implementing rules and regulations."

Agencies should avoid the splitting of contracts unless it is allowed by existing laws and
regulations, such as in emergency cases, as stated in Section 54.3 of the Implementing
Rules and Regulations (IRR) of RA 9184. The procurement process for any procurement
activity that exceeds Php 1,000,000 requires public bidding, and this amount serves as
the current public bidding threshold amount.

Requisition Procedures:
Requisition procedures refer to the submission of a request for goods, services, or
infrastructure projects by the procuring entity. This document should indicate the nature,
quantity, specifications, and delivery requirements of the requested items or services.
The procuring entity must ensure that the requisition is complete and accurate, and it
has been reviewed and approved by the appropriate authority.

Payment Procedures:
Payment procedures are the processes involved in disbursing funds to suppliers and
contractors as payment for products or services rendered. Payment procedures should
follow the guidelines stated in the Government Accounting Manual (GAM) and the
Commission on Audit (COA) circulars. Payment requests must be supported by
complete documentation, such as delivery receipts, inspection reports, and acceptance
certificates. Payments must also be reviewed and approved by the appropriate
authorities.

Conclusion:
The procurement law in the Philippines is essential to ensure transparency,
accountability, and efficiency in government procurement activities. Splitting of
purchases, requisition, and payment procedures must follow specific guidelines to
comply with the law. The current public bidding threshold amount of Php 1,000,000
requires that any procurement activity exceeding this amount must undergo public
bidding. By following these guidelines, the government can promote fair competition,
prevent corruption, and achieve value for money in its procurement activities.
Supplemental Materials:
Property and Supply Management Manual of the Commission on
Audit RA 9184 and its Implementing Rules and Regulations

Activity Questions:
1. Give/search some examples of splitting of contracts under government
procurement. Briefly discuss why your example is a form of splitting of property. 2.
Why do you think splitting is prohibited under the law?
3. Digest and discuss the case of the National Center for Mental Health
Management, et. al. vs. COA, G.R. No. 114864 December 6, 1996. What were
the items that were split? How did the alleged splitting happen? What was the
ruling of the Supreme Court?
Module 3: Identifying Potential Suppliers (6)
Introduction:
Procurement is an essential function in any government agency. The procurement
process involves identifying potential suppliers, evaluating their capabilities, and
selecting the best supplier to provide goods or services needed by the government
agency. In the Philippines, the procurement process is guided by Republic Act No.
9184, also known as the Government Procurement Reform Act. This lesson aims to
guide learners on how to identify potential suppliers for national government agencies in
the Philippines.

Content:

1. Understand the procurement guidelines and best practices

Learners should be familiar with the procurement guidelines and best practices
set forth by the Philippine government. These include the requirements for
eligibility, the bidding process, and the evaluation criteria for selecting suppliers.
Familiarizing oneself with these guidelines will help ensure that the selection
process is transparent and fair.

2. Identify the goods or services needed

Before looking for potential suppliers, it is crucial to identify the goods or services
that the government agency needs. This ensures that the search for potential
suppliers is targeted and efficient. It is also important to determine the quality
standards and specifications of the goods or services to be procured.

3. Search for potential suppliers

Once the goods or services needed have been identified, the next step is to
search for potential suppliers. There are various sources for finding potential
suppliers, including supplier directories, business networks, and online platforms.
It is important to evaluate potential suppliers based on their track record, financial
stability, and capability to deliver good quality goods or services. A background
check should also be made to ensure that they have a good reputation and are in
compliance with government regulations.

4. Invite potential suppliers to bid

After identifying potential suppliers, the government agency should invite them to
bid for the project. The invitation to bid should include all the necessary
information, such as the project specifications, eligibility requirements, and
evaluation criteria. It is important to give ample time for suppliers to prepare their
bids and ask any questions they may have during the pre-bid conference.

5. Evaluate supplier bids

Once the bidding process is closed, the government agency should evaluate the
bids based on the criteria set forth in the invitation to bid. This includes evaluating
 the supplier's technical capability, financial capacity, and track record. It is also
important to ensure that the bid price is reasonable and competitive.

6. Award the contract

After evaluating the bids, the government agency should award the contract to the
best bidder. This includes signing a contract with the chosen supplier and
specifying the terms and conditions of the project. It is important to ensure that
the contract follows the procurement guidelines and best practices set forth by
the government.

Conclusion:
Identifying potential suppliers for national government agencies in the Philippines
requires following established procurement guidelines and best practices.
Understanding these guidelines, determining what goods or services are needed,
searching for potential suppliers, inviting them to bid, evaluating their bids, and finally
awarding the contract
ensures a transparent and fair selection process.

Supplemental Materials:
Property and Supply Management Manual of the Commission on
Audit Implementing Rules and Regulations of Republic Act No. 9184

Activity Questions:
1. How can government units ensure that they are working with reliable and
trustworthy suppliers for logistics management?
2. What role does technology play in helping identify potential suppliers and manage
their supply chains for logistics management?
3. What are the minimum technical requirements required by the law from suppliers
to qualify to bid for public bidding (procurement) of the government? 4. What is tailor-
fitting? Give some examples. Why is it prohibited under procurement law?
5. Download at least 3 samples of a request for quotation with canvass form.
Scrutinize and distinguish each. Do you think they are compliant with the law and
rules? Explain.
6. What is PHILGEPS Registration? Give some examples of instances when it is not
required when procuring for the government. What is the rationale for the
exemption in your example/s?
Module 4: Efficient Inventory Management (7)

Introduction:
Inventory management is a crucial aspect of any organization, including government
agencies. Effective inventory management ensures that an agency has enough supplies
and materials to meet its operational needs while minimizing waste and unnecessary
expenses. This lesson will cover the following topics: tracking inventory levels,
monitoring expiration dates, and identifying slow-moving items.

Tracking Inventory Levels:

Tracking inventory levels involves regularly checking the number of items in stock and
comparing them to the agency's demand. This process helps prevent stockouts or
overstocks. In order to track inventory levels effectively, agencies should:

1. Set par levels - Par levels are the minimum amount of inventory needed to
keep operations running smoothly. Agencies should set par levels based on
historical usage and future demand projections.

2. Use technology - Modern inventory management systems can help automate

inventory tracking and provide real-time updates on stock levels.

3. Conduct regular physical counts - Regular physical counts ensure that the
inventory records match the actual quantity of items on hand.

Monitoring Expiration Dates:

Expired items not only incur unnecessary costs but can also jeopardize public safety.
Government agencies should implement a system to monitor expiration dates and
remove expired items from inventory promptly. To monitor expiration dates effectively,
the following steps should be taken:

1. Label items with expiration dates - All items should be labeled with their
expiration dates upon receipt.

2. Conduct regular checks - Regular checks should be conducted in areas where

expired items are most likely to be found such as storage rooms or warehouses.

3. Develop a disposal plan - A clear plan for disposing of expired items should be
developed to ensure that they are disposed of safely and responsibly.

Identifying Slow-Moving Items:

Slow-moving items tie up capital and take up valuable storage space. Identifying slow
moving items allows agencies to make informed decisions on how to optimize their
inventory. The following steps can be taken to identify slow-moving items:

1. Analyze use-rate data – Use-rate data can help identify which items are
moving slowly.
2. Set criteria - Agencies should set criteria for identifying slow-moving items
based on factors such as the number of days an item has been in inventory or
how many times it has been sold in a given period.

3. Develop a plan - A plan for managing slow-moving items should be developed,

including strategies for reducing their inventory levels or promoting them to
increase demand.

Conclusion:
Effective inventory management is essential for government agencies to operate
efficiently and minimize unnecessary costs. By regularly tracking inventory levels,
monitoring expiration dates, and identifying slow-moving items, agencies in the
Philippines can optimize their inventory and ensure that they have the supplies and
materials they need to fulfill their missions.

Supplemental Materials:
Property and Supply Management Manual of the Commission on Audit

Activity Questions:
1. Check the most current General Appropriations Act specifically under the General
Provisions. What is the current limitation on storage and procurement of common
supplies of government offices? Discuss your basis. How is this important in
procurement planning?
2. Provide some key factors to consider for efficient inventory management? 3. How
can technology be utilized to enhance inventory management practices in
government logistics operations?
Module 5: Proper Warehousing and Storage Practices (7)

Introduction:
Warehouses and storage facilities are essential components of many national
government agencies in the Philippines. They serve as holding spaces for various
goods, equipment, and supplies that are vital to the agency's operations. As such, it is
crucial to ensure that these facilities are secure, well-maintained, and have proper
temperature and humidity control. In this lesson, we will discuss the best practices for
warehousing and storage in national government agencies to help you maintain the
quality of your stored products.

1: Security Measures
One of the most important considerations for warehousing and storage in national
government agencies is security. Here are some best practices to keep your
warehouse or storage facility secure:

- Install fencing around the perimeter of the facility to keep unauthorized

individuals from entering.
- Implement access controls such as key cards, biometric authentication,
or security personnel to limit access to authorized personnel only.
- Install CCTV cameras to monitor activity within the facility and deter
potential theft or damage.
- Conduct regular security assessments and audits to identify
vulnerabilities and implement necessary improvements.

2: Maintenance Practices
Keeping your warehouse or storage facility well-maintained is also essential to
ensure the longevity of your stored products. Here are some best practices for
maintaining your facility:

- Regularly inspect the building structure, roof, walls, and flooring for any
signs of wear and tear or damage.
 - Ensure that your facility is free from pests such as rodents, insects, or
birds that can cause damage to stored products.
- Keep the facility clean and organized to prevent clutter and accidents. -
Maintain your equipment such as forklifts, pallet jacks, and conveyor belts
to avoid breakdowns that can disrupt operations.

3: Temperature and Humidity Control

Temperature and humidity control are crucial for certain types of products, such
as pharmaceuticals, food items, and electronics. Here are some best practices
for maintaining proper temperature and humidity levels in your warehouse or
storage facility:

- Install HVAC systems to regulate the temperature and humidity within the
facility.
- Conduct regular checks on the temperature and humidity levels to ensure
they are within the recommended range.
- Use monitoring devices such as data loggers to track temperature and
humidity levels and identify any inconsistencies.
- Implement a contingency plan in case of power outages or other
disruptions that can affect temperature and humidity control.

Conclusion:
Proper warehousing and storage practices are critical for national government agencies
in the Philippines. By implementing security measures, maintenance practices, and
temperature and humidity control, you can ensure the quality and integrity of your stored
products. Remember to conduct regular assessments and audits to identify areas for
improvement and implement necessary changes to maintain optimal conditions for your
stored products.

Supplemental Materials:
Property and Supply Management Manual of the Commission on Audit

Activity Questions
1. What are the common challenges that your previous agency (BFP/BJMP) faced
in managing warehouses and how can these be addressed?
2. Give/Search some Philippine laws or rules on proper warehousing and storage.
Enumerate some of their basic requirements. Discuss briefly.
3. Among those that you found, which prescribed rule/s do you think is ideal for
your agency to adopt? Why?
Module 6: Risk Management (7)

Introduction:
Logistics management is a crucial aspect of any business, and it involves the planning,
coordination, and execution of the movement of goods and services from the point of
origin to the point of consumption. Risk management, on the other hand, entails
minimizing or mitigating potential risks that may arise during the logistics process.
In the Philippines, National Government Agencies are responsible for regulating logistics
operations and ensuring compliance with laws, standards, and regulations. These
agencies play a critical role in managing risks associated with logistics operations by
providing guidance, monitoring, and enforcement measures.

Here are some steps to manage risks associated with logistics operations involving
National Government Agencies in the Philippines:

1. Identify Risks: The first step in managing risks is to identify potential risks
associated with logistics operations. These risks may include theft, damage to
goods, delays, and regulatory compliance issues.

2. Evaluate Risks: Once you have identified potential risks, evaluate their
likelihood and impact on your logistics operations. You can use risk assessment
tools to analyze these risks and determine the level of severity.

3. Develop a Risk Management Plan: Based on the results of the risk evaluation,
develop a risk management plan that outlines strategies for minimizing or
mitigating potential risks. This plan should be detailed, specific, and tailored to
your logistics operations. Hence, it must specifically prevent or at least mitigate
the risk.

4. Implement Controls: Once you have developed your risk management plan,
implement controls to mitigate or minimize potential risks. These controls may
include security measures, quality control checks, and compliance monitoring.

5. Monitor and Review: Regularly monitor and review your risk management plan
to ensure its effectiveness. Evaluate its performance, identify areas for
improvement, and update the plan accordingly to keep up with changing
regulations and requirements.

6. Engage with National Government Agencies: Stay informed about rules,

standards, and regulations set forth by National Government Agencies in the
Philippines. Ensure that your logistics operations comply with these regulations to
minimize the risk of penalties or legal action.

Conclusion:
Managing risks associated with logistics operations involving National Government
Agencies in the Philippines requires a comprehensive and systematic approach. By
following these steps, you can reduce the likelihood and impact of potential risks,
ensuring a seamless and efficient logistics process.

Supplemental Materials:
Property and Supply Management Manual of the Commission on Audit

Activity Questions:
1. What are the common risks that your previous agency (BFP or BJMP) faced in
 logistics management and how can these risks be mitigated? Briefly explain each. 2.
Pick one risk from your list. Create a simple risk management plan for the chosen
risk.
3. What are the potential implications of inadequate risk management in logistics
management in your previous agency and what steps can be taken to address
these implications?
Module 7: Performance Monitoring (8)

Introduction:
Logistics management systems play a vital role in ensuring the efficient flow of goods
and services within national government agencies. To ensure that these systems are
performing optimally, it is essential to track key performance indicators (KPIs), such as
delivery time, inventory turnover, and cost-effectiveness. This lesson aims to provide an
overview of performance monitoring in logistics management systems for national
government agencies in the Philippines.

Key Performance Indicators (KPIs):

1. Delivery Time: The time between placing an order and receiving the goods is an
essential KPI for logistics management systems. It measures the efficiency of the
system in ensuring that goods are delivered within the estimated time frame. 2.
Inventory Turnover: This KPI measures how quickly inventory is sold or used up during
a specific period. A high inventory turnover rate indicates that the logistics management
system is efficiently managing inventory levels, reducing the likelihood of overstocking or
understocking.
3. Cost-Effectiveness: This KPI measures the overall cost of the logistics management
system relative to its benefits. It includes factors such as transportation costs, storage
costs, and labor costs. A cost-effective system ensures optimal resource utilization and
reduces unnecessary expenses.

Performance Monitoring Techniques:

To monitor the KPIs mentioned above, the following techniques can be used:

1. Data Analysis: Collecting and analyzing data on delivery times, inventory turnover,
and cost-effectiveness can help identify areas where the logistics management system
needs improvement. This can be done through software systems that track and analyze
data automatically.

2. Performance Dashboards: Performance dashboards provide a visual representation

of logistics management system performance. They allow stakeholders to track KPIs in
real time and make informed decisions based on the data presented.

3. Surveys and Feedback: Stakeholders can provide feedback on the logistics

management system's performance through surveys and feedback mechanisms. These
can help identify areas where improvement is needed and provide insights into the user
experience.

Conclusion:
Performance monitoring of logistics management systems is essential for national
government agencies in the Philippines to ensure the efficient flow of goods and
services. Tracking KPIs such as delivery time, inventory turnover, and cost-
effectiveness, and using techniques such as data analysis, performance dashboards,
and surveys/feedback
mechanisms, can help identify areas requiring improvement and facilitate better
decision making based on accurate and up-to-date information.

Supplemental Materials:
Property and Supply Management Manual of the Commission on Audit

Activity Questions:
1. Give/Search Philippine laws or rules that provide some standards on logistics
management. Discuss briefly.
2. Using those laws, rules, or standards, provide some prescriptions on key
performance indicators that your agency may use in order to measure the
effectiveness of its logistics management practices.
Module 8: Disposal of Movable and Unserviceable Properties (8)

Introduction
In this module, we will discuss the proper procedures for the disposal of movable and
unserviceable properties owned by government units in the Philippines. Government
units are expected to dispose of these properties effectively and efficiently to avoid
wastage and misuse of public resources.

Definition of Terms
- Movable Properties - These are assets that can be easily moved from one location to
another such as vehicles, equipment, furniture, and fixtures.
- Unserviceable Properties - These are movable properties that have become obsolete,
unusable, or no longer necessary for the government unit's operations.

Types of Disposal Methods

1. Public Bidding/Auction - This method involves the sale of the government unit's
movable properties to the highest bidder. A public auction may be conducted through
physical bidding or online bidding.

2. Negotiated Sale - This method allows the government unit to sell its movable
properties directly to interested buyers without going through an auction process. It is
typically used for high-value items or when there is a limited number of interested
buyers.

3. Donation - This method allows the government unit to donate its movable properties
to qualified individuals or organizations, provided that it is not prohibited by law.

Requirements and Processes for Disposal

1. Identification of Movable and Unserviceable Properties - The government unit must
conduct an inventory of its movable properties and identify which ones are
unserviceable or no longer needed for its operations.

2. Declaration of Property as Unserviceable - The government unit must declare the

identified movable properties as unserviceable through a resolution or executive order.

3. Appraisal of Property - The unserviceable properties must be appraised to determine

their fair market value. This is necessary for determining the starting bid price during a
public auction or the selling price for a negotiated sale.

4. Approval of Disposal - The government unit must secure approval from the
appropriate authority before proceeding with the disposal process.

5. Conduct of Public Auction or Negotiated Sale - If the government unit decides to

proceed with a public auction or negotiated sale, it must follow the procedures set forth
by law and issue a notice of sale to interested buyers.
6. Donation Process - If the government unit decides to donate its movable properties, it
must ensure that the donee is qualified to receive such donation and that the donation is
made in accordance with existing laws and regulations.

Conclusion:
The proper disposal of movable and unserviceable properties owned by government
units is crucial to prevent the wastage of public resources. Government units must
follow the appropriate procedures and methods when disposing of these properties to
ensure transparency and accountability. By doing so, they can maximize the value of
these assets and contribute to the overall efficiency of their operations.

Supplemental Materials:
1. Property and Supply Management Manual of the Commission on Audit
2. Section 79 of P.D. No. 1445
3. E.O. No. 309, s. 1996
4. N.B.C. No. 425, dated January 28, 1992

Activity Questions:
1. Find the various prescribed modes of appraising disposable properties.
Enumerate them.
2. How do you get the junk value of a property? Find the junk value appraisal
method. Provide an example of a computation.
3. Is a single bidder’s submission of a bid envelope in public bidding (disposal via
sale) sufficient for the bidding to be successful? What is your basis? Explain your
answer.
4. How is public bidding in procurement similar and/or different from public bidding in
the disposal of movable properties?
5. Find a posting for the disposal of government property. Download the publication
and its attached forms, and scrutinize its contents based on the requirements of
the law and rules.