1. Logistics Management
LSM 730
Lecture 4
Dr. Khurrum S. Mughal

2. Scope of the Supply Chain for Most Firms
Physical distribution
Physical supply
(Materials management)
Business logistics
Sources of
supply
Plants/
operations
Customers •
Transportation
Inventory maintenance
Order processing
Acquisition
Protective packaging
Warehousing
Materials handling
Information maintenance
Product scheduling
Focus firm’s internal supply chain
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3. Key Activities/Processes
Primary
Setting Customer service goals
Transportation
Inventory Management
Order Processing and Information Flows
Secondary, or supporting
Warehousing
Materials Handling
Acquisition (Purchasing)
Protective Packaging
Product Scheduling
Information Maintenance

4. Key Activities/Processes
Primary
Setting Customer service goals (work with marketing)
Identify customer needs and wants for logistics customer service
Determine customer response to service
Set customer service level – directly related to costs
Transportation (primary cost absorbing activity which adds place value)
Mode and transport service selection
Freight consolidation
Carrier Routing
Vehicle Scheduling
Equipment Selection
Claims Processing
Rate Auditing

5. Key Activities/Processes
Primary
Inventory Management (adds time value to the products, bridges the gaps between supply and demand)
Raw Materials and finished goods stocking policies
Short term sales forecasting
Product mix at stocking points
Number, size and location of stocking points
Just-in-time (low levels), push (forecasting based) and pull (order based) strategies
Order Processing and Information Flows (Activity that triggers the whole process)
Sales order – inventory interface procedures
Order information transmittal methods
Ordering Rules

6. Key Activities/Processes
Secondary, or supporting
Warehousing
Space Determination
Stock layout and dock design
Warehouse configuration
Stock placement
Materials Handling
Equipment selection
Equipment replacement policies
Order-picking procedures
Stock storage and retrieval

7. Key Activities/Processes
Secondary, or supporting
Acquisition (Purchasing)
Supply source selection
Purchase timing
Purchase quantities
Protective Packaging
Handling
Storage
Protection from Loss and Damage