Logistics - Logistical operating arrangements
4 important questions on Logistics - Logistical operating arrangements
Which three widely utilized structures of operating logistical arrangements are there?
- Echelon - structure
- Direct
- Combined
Describe an Echelon - structure
- Echelon uses warehouses to create inventory assortments and achieve consolidation economies associated with large - volume transportation shipments.
- Echelon systems utilize break - bulk or consolidation warehouses.
Break - bulk facility: receives large - volume shipments from a variety of suppliers.
Consolidation facility: central warehouse facility to allow firms (that have plants at different geographical locations) to ship full - line assortments to customers.
Describe a direct structure
- Uses premium transport and IT to rapidly process orders and achieve delivery performance.
- Order delivery cycle reduces time delays and overcomes geographical separation from customers.
- Examples of direct shipments: plant - to - customer truckload shipments, direct store delivery, direct - to - consumer delivery (via internet).
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Describe a structure of a combined Echelon and direct logistical operation.
- Considering the type of product and type of consumers, the strategy that satisfies customer expectations at lowest attainable total cost can be created with the right amount of characteristics of echelon and direct structures.
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