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Positioning of resources at the right time, in the right place, at the right cost, and at the right quality Function responsible for all aspects of the movement and storage of goods (from original suppliers to final customers) 

Combination of goods and services  → Goods and services create value for customer together

Warranties, after-sales service, repairs, finance service, logistics, instructions for use  If competing products are similar, the advantage is obtained through additional service 

Can logistics be treated as a part of the product? 

Planning, implementing, and controlling the flow of goods, services, and related information  → Part of supply chain management  → Efficient and effective forward and reverse flow / storage

Objectives of system Employees involved in logistics activity (amount, skills, location of employees in the organizational structure) Information supporting logistics decisions Equipment (required according to the needs of company’s activity) Processes (related to flows of goods and information) Environment (suppliers, customers, bank, insurance company) 

Prerequisite of integration of cooperation in supply chain

Activity of the supplier beyond which extend beyond enterprise Goal: Provide the recipient with the right quantity and quality according to commercial / production demandTask: Provide recipient with required raw materials, manufactured materials, semi-finished products, spare parts, finished goods (in commercial operations), and other goods to enable recipient’s activity 

Product policy: Choice between manufacturing independently or purchasing products (make or buy), types / quantities of supplied goods used and dates of their purchase during the planning period Policy of contracting: Accepted purchase prices (including quantity or value discounts), commitment of cooperating parties concerning packaging, transport, and storage of goods Communication policy: Decisions regarding the scope of information available to suppliers about supply plans, expectations, and other conditions Purchasing policy: Determination of optimal number of suppliers (minimizing risk of dependence on single / narrow group of suppliers, while ensuring adequate bargaining power for each supplier), and selection of suppliers with the best geographical location 

Main factors influencing decision in supply logistics

Link between supply logistics and logistics of distribution in companies manufacturing or assembling products Tasks: Supply of raw materials, manufactured materials, semi-finished products and purchased parts, flow of goods between subsequent processing stages, and transfer of finished products to sales warehouses 

Type of production: Choice between mass production, production of series or manufacturing of individual/dedicated products Location of production process, individual phases and distribution of machines used in manufacturing: Location of warehouses is important for creating buffer stocks ensuring continuity of operations Assumptions concerning supply of materials: Choice between orders based on demand (determined based on production plan) or based on consumption (ensuring delivery when the minimum stock is reached)

Main factors influencing decision in logistics of production

Related to recipient market → This phase of flow (goods with information) already concerns final products → May apply to semi-finished products, elements for further assembly, etc. Tasks: Supply customer with finished goods directly from production, from sales warehouses or from other regional shipping centres Distribution logistics is closely related to marketing activity

Policy of product: Range of products offered, product development, related conditions of manufacturing, moving, storage and (post) warranty service Policy of delivery: Attached to price level (range of logistics costs, depending on distribution of obligations related to delivery of products), and discounts (quantitative and valuable) Communication policy: Distribution decisions, influenced by assumptions about advertising, promotion and direct sales (also assumptions of public relations)

Main factors influencing decision in distribution logistics

Waste and recyclable materials as side effect from production and distribution processes (including shipment and storage) Returns may result from product defects, surpluses (slow-moving goods), delivery of improper goods to the recipient Products, that may be recyclable / liquidate, and waste Recipients can be suppliers of products, but above all such recipients are companies specializing in the utilization / processing of waste and recyclable materials 

Returning goods are equally important as other phases of the flow of goods Implementation of sustainable development principles → Related to social, environmental and economic aspects of activity Return of goods from recipients can be source of competitive advantage (due to the limited possibilities to improve operations in other logistics subsystems) Combines responsibility for delivery of products with responsibility for collection of returned goods, reusable packaging from recipients Ensure the shortest possible deadline for the return of goods and the execution of buyer’s orders for products offered

Main factors influencing decision in reverse logistics

Market of logistics service is well developed Different scope of service offered by providers → Simple tasks like transportation, storage or complex logistics service, including forwarding

1 Essence of Logistic

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Jacqueline

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