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Unit 9 Logistics

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41 views

Unit 9 Logistics

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huyennb415
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© © All Rights Reserved
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Unit 9 Logistics

1. What is Logistics
1.1 Definition
- Logistics is the overall process of managing how resources are acquired, stored, and transported
to their final destination.
- In simple terms, the goal of logistics management is to have the right amount of a resource or
input at the right time, getting it to the appropriate location in proper condition, and delivering it to
the correct internal or external customer.
- Manufacturing companies may choose to outsource the management of their logistics to
specialists or manage logistics internally if it is cost-effective to do so.
- Logistics is now used widely in the business sector, particularly by companies in the
manufacturing sectors, to refer to how resources are handled and moved along the supply chain.
Examples of logistics
- Inventory Management: Tracking the availability of items in a warehouse or store and making
sure there is enough stock for customer demand.
- Transportation Management: Planning and coordinating the movement of goods from one
location to another.
- Warehousing: Storing goods in a safe and efficient manner.
- Order Fulfillment: Picking, packing, and shipping orders in a timely manner.
- Freight Management: Negotiating rates and selecting carriers for the transportation of goods.
- Reverse Logistics: Managing the return of products for repair, replacement, or disposal.

1.2. Logistics functions


The management of logistics can involve some or all of the following business functions,
including:
- Inbound transportation: the way materials and other goods are brought into a company
Outbound transportation: the process of storing, transporting, and delivering your goods to their
end international customers
Fleet management: an essential operation for the efficient functioning of logistics operations.
Warehousing: the process of storing physical inventory for sale or distribution
Materials handling: the movement of materials and goods from one location to another
Order fulfillment: the critical task of assembling the order and shipping it off to the customer
Inventory management: the tracking of inventory from manufacturers to warehouses and from
these facilities to a point of sale.
Demand planning: a supply chain management process of forecasting, or predicting, the demand
for products to ensure they can be delivered and satisfy customers
1.3 Types of logistics
- Inbound Logistics: The process of receiving and storing goods from suppliers and vendors.

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- Outbound Logistics: The process of selecting, packing, and shipping products to customers.
- Reverse Logistics: The process of returning goods from customers and redistributing them to
other customers or back to the supplier.
- Third-Party Logistics: The outsourcing of logistics operations to a third-party provider.

1.4 The 7 R’s of logistics

Right product. Make sure your logistics services and solutions make delivery operations easier for
your business and better for your customers.
Right customer. Do your research to understand your customers and implement the best logistics
strategy to deliver shipments to them.
Right price. Set the right price for your delivery services, so you can make a profit and keep your
business running.
Right quantity. Produce and ship the right amount of product, known as your economic order
quantity (EOQ), to match demand, save money, and be more efficient.
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Right condition. Deliver your products safely and with top-notch quality until they reach your
customers.
Right time. Deliver products on time to keep your customers happy and your business thriving.
Right place. Use a great delivery system with location tracking to make sure your product ends up
in the right place.

2. Pull and Push strategies in logistics


- Push-Pull strategy is a supply chain management method based on the combination of two pull
and push strategies to optimize production, distribution and management processes. inventory
management.
- A push-pull strategy plays an important role in ensuring supply chain performance. This helps
reduce production costs, optimize inventory, improve flexibility, and respond quickly to changing
market needs.

2.1. Pull strategy


- Pull Strategy is a supply chain management method based on the actual needs of customers.
Producing and shipping goods are done based on orders from customers, which helps to reduce
inventory and costs.
Advantages:
- More flexibility in responding to customers' changing needs
- Reduce inventory and associated costs
- Increase competition in the market
Disadvantages
- Delivery time may be longer due to waiting for orders from customers
- It can be difficult to forecast production output

2.2 Push Strategy


Push Strategy is a supply chain management approach based on anticipating customer needs.
Producing and shipping goods is carried out based on this forecast, helping businesses to prepare
the required quantity of goods in advance.
Advantages:
- Ability to quickly respond to customer needs
- Help businesses forecast production output and adjust production efficiently
Disadvantages
- There is a risk of high inventories if the forecast is not accurate
- Production and warehouse management costs can be high

2.3 Steps to implement effective push and pull strategies


Market demand analysis: Collect and analyze data on market needs, trends, and competitors to
identify opportunities and threats.

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Production planning: Based on the results of demand analysis, make production plans for
products, with the goal of optimizing inventory and production costs.
Implementation of a push strategy: Produce and ship goods based on demand forecasts, helping
to quickly respond to customer needs.
Implementation of a pull strategy: Produce and shipp goods based on actual orders from
customers, helping to reduce inventory and associated costs.
Performance review and adjustment: Monitor and evaluate the effectiveness of the Push/Pull
strategy, making necessary adjustments to improve supply chain management efficiency.
Applying new technologies and methods: Learn and apply new technologies and management
methods such as warehouse management systems (WMS), supply chain management systems
(SCM), artificial intelligence (AI) ) and Machine Learning to improve the effectiveness of the
Push/Pull strategy.
2.4 Note of applying push-pull strategy
A push-pull strategy plays an important role in optimizing your supply chain management process.
However, to apply this strategy effectively, businesses need to be flexible in using strategies to
maximize efficiency.
Use a Push Strategy
- When businesses have the ability to forecast customer needs accurately and want to respond to
customer needs quickly.
- When the product has a long life cycle, there is little volatility and demand is predictable.
- When businesses want to take advantage of production scale, reduce the unit cost of the product.
Use a Pull Strategy
- When customer needs are often changing and difficult to predict.
- When a product has a short life cycle, there is a lot of volatility, and demand is difficult to predict.
- When businesses want to focus on meeting the specific needs of each customer, creating
flexibility in the production and transportation of goods.
Combining Pull and Push strategies
- When businesses want to take advantage of both Push and Pull strategies to strike a balance
between business efficiency and meeting customer needs.
- When businesses want to enhance their competitiveness, reduce risks and optimize the supply
chain management process.
- When businesses want the flexibility to adjust production and shipping based on actual data and
predict customer needs.

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