LOGISITCS
MANAGEMENT
LOGISITCS
MANAGEMENT
OPERATIONS MANGEMENT - ASSIGNMENT # 16
by Kent Edward Baxter 13 April 1998
A. What is the primary aim of logistics?
Give a brief explanation.
The primary aim of logistics is the responsibility for the physical
movement of all materials and products within an organization, from suppliers
through operations and then on to customers.
B. What jobs are usually considered parts or functions of logistics?
Give a brief description of each one.
Procurement or
purchasing - Responsible for buying raw materials from suppliers.
Traffic and transport - moves the raw
materials from suppliers to the organization's receiving area.
Receiving - unloading of trucks bringing in
raw materials, inspects goods for any damage, checks that the goods delivered
are the same as those ordered.
Warehousing or stores - holds materials
until they are needed, taking care of them for the time being.
Inventory control - deals with
replenishment of stocks and control of inventory levels.
Material handling - moves the materials
needed for operations during the process.
Shipping - takes finished products, checks
them, and loads them on to trucks for delivery to customers.
Distribution - delivery of finished
products to customers.
Location - decisions on how many warehouses
should be built, and where they should be located.
Communication - keeps all records for the
logistics system.
C. What are the stages in a typical purchasing cycle?
Give a brief description of each one.
•
A person in need of a material makes a request to the head of the
department. The department then checks the request against its budgets, and if
criteria is met, a purchase request is prepared and sent to procurement.
•
Procurement receives and analyzes the purchase request, checking and
verifying it, then proceeding to check current stocks and any alternate
products. A short list of possible suppliers is made, and a request for price
quotation is sent to suppliers on the list.
•
Suppliers examine the request for quotation, determine the best way it
could satisfy an order, and send an offer back to the organization, featuring
prices and conditions.
•
Procurement selects the best supplier based on its product and delivery
price, discusses and finalizes any details with the supplier, and issues a
purchase order.
•
The supplier then receives and processes
the purchase order, making or assembling the order, shipping the order to the
organization, sending an invoice.
•
Procurement does any necessary follow-up to make sure that the materials
are delivered, receiving, inspecting and accepting the items. Inventory records
are updated, the purchasing department is notified, and the supplier's invoice
for payment is approved.