4. Logistics Aim and Tasks

Logistic tasks depend on the elements and constrains of the logistic system. These are:

1. Optimization of materials flows (optimization of physical distribution, computer imitation, modeling, modernization of organization structures, development of logistical chains)

2. Improvement of information processes (electronic data exchange, computer application)

3. Secure optimal inventory level (implementation of the modern logistical concepts – JIT, MRP, DRP, etc)

4. Optimal infrastructure development (coordination of transportation schedule, purchasing and supply management, storage, development of information systems according to existing conditions)

5. Costs reduction technologies (methods ABC& XYZ, factor analysis, inventory optimization, controlling methods, etc.)

Logistic functions and related tasks

Transportation:

Types of transport means, decision on whether to buy or lease, development of the optimal route, etc.

Storage (warehousing):

Quantity, placement and capacity. Warehousing technology. Buying or lease. Place of transport loading/unloading. Management by own force or by external organization. Personnel effectiveness.

Inventory

Controls of availability levels. Risk reserves. Forecasting of needs. Stock lines

(assortiment).

Information systems:

Decision on types of systems to be implemented. Development of new info technologies. Decisions on how to disseminate info and to whom.

Purchasing and supply management.

Production processes. Effective allocation of resources. Green management.

5. Logistics and the Modern Economic Environment

Quick development of the logistic concepts. Logistic costs and their treatment. Accountancy and logistic costs.

Commercial services usually hide the actual amounts of logistic costs, therefore difficult to calculate the logistic results. (how to measure the idle stay of the work unit, low utilization of free warehousing space, quality losses and controls).

Reality – no strictly defined tasks and problems of production (no formalization). Therefore, the importance of imitation, computer modeling arise. Optimization models.

Importance – short turnover cycles with minimum capital investments and reduced risks (storage and inventory). (Book)

Traditional management methods become not effective, orientation – toward concepts of material flow instead of main and supplementary administration methods.

Reserves of improvement: transportation, packaging – hand work, low productivity. Also – in operational processes changes of priority.

Specialization – in production processes has been achieved, but not in logistics. Logistical services by third parties.

New business philosophy – formation of economic potential, permit future profits.

Competitiveness levels:

Depend on logistic levels – availability of goods in a proper place and time, with excellent quality and optimal payment terms.

More and more functions become logistic ones. Eg. Quality control, utilization, planning of production.

Demand rise for logistic services. High level distribution systems, inventory minimization, optimization of materials flows.