Logistics - The work of logistics

5 important questions on Logistics - The work of logistics

Logistics belongs to the bigger context of supply chain management. How can logistics be explained?

Creating value by moving and positioning the right products (of the right quality and quantity) at the right time and place.

For a supply chain to realize the maximum strategic benefit from logistics, five interrelated functions of logistics must be sucessfully implemented. Which five functions?

  1. Order processing;
  2. Inventory;
  3. Transportation:
  4. Warehousing, material handling and packing;
  5. Facility network.


(think by yourself: why are these functions related to each other?)

What are the three fundamental factors of transportation?

  1. Cost: the payment for shipment between A and B. Looking at the total system cost, the least expensive transport method does not Always turn out to result in the lowest total cost.
  2. Speed: the time required to complete a specific movement. A critical aspect of selecting the most desirable method of transportation is to balance speed and cost of service.
  3. Consistency: refers to variations in time required to perform a specific movement over a number of shipments. With less consistency, more inventory should be held in warehouses to cover service failure. Speed and consistency combine to create quality of transportation.
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Define Warehousing, Materials Handling and Packaging

Warehousing, Materials Handling and packaging: These functionalities are all an integral part of other logistics areas. Warehouses are used for more than just storing inventory: material handling, value - added activities and reverse logistics. A variety of mechanised and automated devices exist to speed up materials handling and to diminish the risk of damage. To facility handling efficiency, products are stored in larger units called master cartons to protect the product and to facilitate the ease of handling. Warehousing, material handling and packing facilitate the speed and overall ease of product flow throughout the logistical system.

Define Facility Network design

Facility network design: the number, size and geographical relationship of facilities used to perform logistical operations. It also includes determining what and how much inventory to stock at each facility. Network design should be modified continuously because of dynamic demand and supply.

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