11-1: Identify the components of an integrated logistics management system.

 

Integrated logistics management refers to the activities used to control the movement of products and associated costs so that there is a continuous and uninterrupted flow of products. The key components of an integrated logistics management system are order fulfillment, transportation management, packaging, materials handling, warehouse management, inventory management, and the design of a network of facilities.

 

11-2: List the steps in the order fulfillment process.

Order fulfillment is the process by which a company responds to customer orders. It includes all the activities from the point of initial contact with the customer to the point of delivering that order. The order fulfillment process is a critical logistics activity because it is a key determinant of customer satisfaction and of whether customers will do business with you again.

11-3: Identify the decisions involved in transportation management.

Transportation management involves overseeing the movement of goods and raw materials and is a vital component of nearly every business and industry. Decisions in transportation management include selecting a transportation mode and a network design strategy. The most common transportation modes are air, truck, rail, water, and pipeline. Each mode has its benefits and drawbacks. Intermodal transportation is the movement of freight stored in containers using two or more modes of transportation. Transportation network design strategies involve establishing an infrastructure that facilitates scheduling and routing decisions. The goal is to optimize the satisfaction of customers at the least possible cost. Among the critical trade-offs when designing a transportation system are transportation versus inventory costs and transportation costs versus customer responsiveness.

11-4: Describe the role of packaging in the transport, distribution, storage, sale, and use of goods.

Product packaging affects a firm’s transportation and logistics strategies and requires an organization to focus on a variety of issues such as product protection, convenience, and efficiency that affect packaging. Packaging protects the product, and it can be designed to make it easier to transport and sell a product. The various physical, chemical, and microbiological characteristics, and the shape and size of the product and the severity of the distribution environment, affect packaging choices. Firms use different types of packaging to handle and ship products as safely and efficiently as possible.

11-5: Define materials handling, and discuss its critical role in a logistics system.

Materials handling is the short-distance movement, storage, control, and protection of materials within the confines of a plant or a warehousing facility. Materials handling plays a critical role in logistics because it has an impact on overall logistics costs, product protection, and physical safety of workers.

11-6: Describe the functions of a warehouse and the different types of warehouses.

Major warehouse functions include order picking, inventory management, consolidation, assembly, bulk breaking, cross-docking, packaging and labeling, and reverse logistics. Public warehouses, private warehouses, and contract warehouses are the three major types of warehouses. In addition, supply warehouses, cross-docking warehouses, and distribution centers are storage facilities used to store incoming goods temporarily both at the point of origin and between the origin and consumption points.

11-7: Explain why good inventory management is important to logistics management.

Good inventory management gives a firm the ability to locate and pick items quickly that are stored within a warehouse for subsequent loading and outbound shipment. Part of inventory management is striking the optimum balance between the costs of carrying inventory in storage against maintaining a sufficient amount of stock to meet the demands of customers.

11-8: Discuss the importance of facilities network design in a logistics system.

In the context of an integrated logistics system, a facilities network design refers to the strategic placement of warehouses, distribution centers, service centers, and manufacturing plants throughout the supply chain. The optimum numbers and types of facilities, their locations, and the nature of their operations are decisions that have to be made as part of the facilities network design process.

11-9: Discuss the unique challenges of managing global logistics.

When designing a global logistics framework, managers need to take into account standard logistical challenges, as well as political, economic, cultural, and distance factors. They also must complete international documentation for each shipment.

11-10: Define logistics outsourcing, and explain why companies outsource their logistics function.

Logistics outsourcing consists of employing third-party (3PL) logistics experts who perform some or all of the necessary logistics functions of warehousing, outbound logistics, export packing, carrier negotiation, and freight consolidation. In recent years, other layers of contract logistics have become widely used, including 4PL and 5PL providers. Many companies outsource some or all of their logistics functions so as to reduce their logistics costs and focus on their core businesses. In addition, accelerated growth in global trade has spurred logistics outsourcing as the global 3PL providers are often better equipped to handle in-country activities and serve as freight forwarders, export trading companies, and customs house brokers, among other logistics duties.

11-11: Describe the unique logistical needs and challenges in the service sector.

The traditional logistical activities of transportation, distribution, and warehousing of physical goods also occur in services. Yet, as a result of the time-critical nature of service businesses, their logistical needs must be met quickly. Innovative transportation, warehousing, packaging, and labeling systems combined with tracking technology, such as RFID, are used by many service businesses to ensure products and services are delivered on time. Because of the unique logistical complexities, many service companies turn to 3PL providers to manage their logistics functions.

11-12: Explain how sustainability issues are affecting the decisions made in logistics.

Sustainability has shaped the decisions managers make about the logistics functions of their firms with regard to the packaging, transportation, storage, and waste generated by their operations. Companies can implement many operational strategies to improve sustainability in logistics activities, including focusing on smarter and greener packaging, consolidating facilities, employing better mixtures of transportation modes, and managing capacity.

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