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importance of value chain management
the role and importance of the supply chain
The Importance of Supply Chain Management is very important and effective to all companies
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The term logistics is originally from the military, which consist by the supply of necessary items for national defence. Till 1960s this term was started to be used in the business and management area, it mainly was used to describe the physical distribution. During the development of the management science and technology, during 1970s to 1980s, logistics had more functions, includes the inbound and outbound logistic which separately support manufacturing, with materials management and marketing with physical distribution (Coyle, Langley, Novack). In the 1990s, logistics had been defined as a process which includes the controlling of goods, and information from start point to end customer requirement. It also includes inbound, outbound, internal …show more content…
According to the research of Rhonda, Dennis and Robert (2001), on common understanding in the related area, logistics is a process to plan and control goods or services resources from the start point of the resource to the final consumer in order to meet their requirement; and the process is considered to include inbound, out bound, internal and external movements and reserve movement of the raw materials and finished products.
In conclusions, logistics management is the control of the material flow in practises, which using planning, implementing to make the flow and storage of goods and services from start to end of the chain efficient and effective, in order to meet the consumer requirement Rhonda, Dennis and Robert (2001) .
Logistics productivity
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This decline is possibly related to the deregulation of transportation in early 1980s and the development of inventory level management. Coyle et al. (2012) mentions that from 1985 to 2006, nominal GDP and the value of all business inventories both had an increase of 212.3% and 119.2%. Saving cost on inventory management could add value to inventory itself, so the productivity improvement of logistic could bring growth to the economy by add value to the products. Purchasing profit leverage effect can also support this point of view, because the decrease on purchasing cost will directly go into the net
...tbound Logistics: The outbound logistics include the movement of the finished goods from the manufacture to the retail stores or a warehousing facility for later use.
As you can see today, in factories, production of goods takes place at a large scale; besides this, all over the world a large number of retail chains have been opening. Management of all the logistics was done manually initially but later on this started to become increasingly difficult to handle. It was due...
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
-Stores are very much dependent on logistics to provide ease of shopping, cost cutting and generating better financial choices for the customer
Unlike forward logistics, reverse logistics is planning, implementing and controlling effective and cost effective flow of materials from consumption point to its origin or source in order to bring back value or for effective disposal. This implies that reverse logistics basically entails events that are crucial to regain, transport, and dispose products. In this case, products are transferred backward from the customer and incorporate the flow of information linked to credit and tracking procedures. This means that a complete supply chain management system entails both forward and reverse logistics inventory management. Despite the difference from the conventional, forward or outbound logistics, reverse logistics is much wider and incorporates a series of assets, which have huge impacts on a company’s bottom line (Greve & Davis,
Outbound Logistics includes the activities that store and distribute products to buyers (e.g. warehousing, delivery vehicle operations, order processing, etc.).
logistics? According to the definition on the internet, it is "the detailed coordination of a complex operation involving many people, facilities, or supplies". According to Marine Corps Doctrinal Publication (MCDP) 4, "Logistics", it defines it as "the science of planning and carrying out the movement and maintenance of forces. Logistics provides the resources of combat power, positions those resources on the battlefield, and sustains them throughout the execution of operations”. Within Marine Corps Doctrinal Publication (MCDP) 1-0, Marine Corps Operations, Appendix "B" portion of this book it provides the warfighting functions that
When an organization decides on what distribution channel to use, it creates the final link in the supply chain. A supply chain is the complete order of suppliers that contribute to creating the product or service and distributing it to business users and consumers. This process of organizing the flow of goods, services, and information among members of the supply chain is called logistics. Physical distribution is a major focus in logistics management.
Logistics is the designing and managing of a system in order to control the flow of material throughout a corporation. This is a very important part of an international company because of geographical barriers. Logistics of an international company includes movement of raw materials, coordinating flows into and out of different countries, choices of transportation, cost of the transportation, packaging the product for shipment, storing the product, and managing the entire process. The concept of logistics is fairly new in the business world. The theoretical development was not used until 1966. Since then, many business practices have evolved and logistics currently costs between 10 and 25 percent of the total cost of an international purchase.
In logistic industry, they have been through lots of challenge in worldwide market. As the containerization of the global economy scopes, a phase of development and explanation, ports find themselves inserted in ever changing commercial environment where logistics is the forefront. Thus, this industry reaches a phase of maturity and rationalization due to the process of logistic on land.
Zanjirani F., Rezapour, S. & Kardar, L. (2011) Logistics operations and management concepts and models, 1st ed. London ; Elsevier.
Supply Chain Management goes back as far as 1898 where the word “logistics” appeared in an article (History of Logistics and Supply Chain Management ). Education in supply chain management started in 1919 as a degree in traffic and transportation. In 1963, the Council of Logistics Management (CLM) was started. At that time, the name of the CLM was the National Council of Physical Distribution Management. In 1982, the term, “Supply Chain Management” was coined by Allen and Hamilton Inc. and Keith Oliver of Booz. Third Party Logistics (3PL) and the first supply chain analysis happened in 1985. In 1996, 69 companies founded the Supply Chain Council. Logistics became a profession in 2000. In 2010, Supply Chain became known as a profession (History of Logistics and Supply Chain Management ). Today, supply chain management is an ever growing career.
A simple definition of logistics would be a type of management toward your resources, raw materials, products and goods on the way of allocation such as obtained or acquired, get stored in the inventory or warehouse then transfer to transport out to the hand of the final consumer or customer at a particular location from warehouse and inventories. The cost that happened along the process also known as the logistics expenditure or cost of logistics process and basically the logistics cost will affect the production cost and operational cost as well as this following research purpose and objective is to discover the relationship between logistics activities and the production cost that whether the logistics activities will affect the production
Logistics has been defined as that type of business planning that focuses its operations in material management, flow of information and capital and efficient service delivery in an organization. Some of the important components involved in the process of logistics include complex information, control systems, and effective communication channels that will make the whole process simple and efficient. A warehouse is also an important part of the logistics system as it plays several roles that are important to both the traders and the target market. Thus, this paper will define a warehouse, its roles in the logistics system, the different types of warehouses and why businesses may prefer one warehouse to the other. Finally, the
Logistics is an aspect of military for the management of the flow of goods between the point of origin and the point of consumption with the aim of meeting some requirements, of customers or corporations. The resources that are managed in logistics may include abstract and physical items. Abstract items like time, information, particles, and energy. Physical items like food, materials, animals, equipment and liquids. Logistics of any physical item generally involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and often security. The main aim in logistics is the transport and delivery of goods by truck, train, plane or ship. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The common motivation in logistics is the minimization of the use of resources for import and export. The