UNIT SEVEN
LOGISTICS
Transportation and
Traffic Management
In-bound Logistics
Out-bound Logistics
At the end of this unit students will be
able to:
• Discuss the concepts of Transportation
and traffic management
• Identify In-bound logistics
• Discuss Out-bound logistics
Overview
• Logistics refers to the receipt,
production, and distribution of goods
and materials in the customer-requested
amounts to its final destination.
• the strategy that determines how your
company stores products in its
warehouse, tracks orders, and delivers
products to its customers.
The Logistics Cycle
Logistics is part of the supply chain
process that plans, implements, and
controls the effective efficient, forward
and reverse flow and storage of goods,
services, and related information between
the point of origin and the point of
consumption in order to meet customers’
requirements.
Logistics Management
• The planning, controlling, and
implementing effective movement and
storage of information, goods & services.
• Meeting customer demands from origin
to destination.
• Helps companies reduce expenses and
enhance customer service.
The logistics management process
• begins with raw material accumulation
• to the final stage
of delivering goods to the destination.
Logistics Management
• Strategically managing procurement,
movement, and storage of materials,
parts, and inventory.
• Maximizing current and future
profitability through cost-effective order
fulfilment.
Components of Logistics System
The closely linked components of the
logistics system are:
1. Logistics services
2. Information systems
3. Infrastructure/Resources
1. Logistics Services
• support the movement of materials and
products from inputs through production
to consumers, as well as associated
waste disposal and reverse flows.
• include activities undertaken in-house by
the users of the services (e.g. storage or
inventory control at a manufacturer’s
plant) and the operations of external
service providers.
Logistics services …
• comprise physical and non-physical
activities (e.g. transport, storage and
supply chain design, selection of
contractors, freightage negotiations
respectively).
• Most activities of logistics services are bi-
direction.
Types Of Logistics Service Providers & Their
Distinguishing Features
First-Party Logistics
2. Infrastructure
• comprises human resources, financial
resources, packaging materials, warehouses,
transport and communications.
• most fixed capital is for building those
infrastructures.
• concrete foundations and basements within
logistics systems
3. Information systems
• include modeling and management of
decision making, and more important
issues are tracking and tracing.
• provides essential data and consultation
in each step of the interaction among
logistics services and the target stations
Transportation and Traffic
Management
Without well-developed transportation systems,
logistics could not bring its advantages into full
play.
• A good transport system in logistics activities
could provide better logistics efficiency, reduce
operation cost & promote service quality.
• The improvement of transportation systems
needs the effort from both public and private
sectors.
• A well-operated logistics system could
increase both the competitiveness of the
government and enterprises.
• The role of transportation plays in
logistics system is more complex than
carrying goods for the proprietors.
• Its complexity can take effect only
through highly quality management.
• By means of well-handled transport system,
goods could be sent to the right place at right
time in order to satisfy customers’ demands.
• It brings efficacy, and also it builds a bridge
between producers & consumers.
Therefore, transportation is the base of efficiency
and economy in business logistics and expands
other functions of logistics system.
• In addition, a good transport system
performing in logistics activities brings benefits
not only to service quality but also to company
competitiveness.
In-bound Logistics
Inbound logistics connotes the activities
which are related to
• sourcing, acquiring, storing and
delivering the raw materials and parts
to the product or service department.
• It is part and parcel of the operations, for
a firm involved in manufacturing
business.
In simple terms, in-bound logistics is the
fundamental activity, which focuses on
buying and scheduling the in-flow of
materials, tools and final goods,
• from suppliers
• to the production unit, warehouse or
retail store.
• Inbound logistics includes all those activities,
which are substantial to make the goods
available for operational processes, at the
time of their need. It encompasses
• materials handling,
• stock control,
• inspection,
• transport...
to facilitate, the production or market
distribution.
Out-bound Logistics
As the name suggests,
• the collection, storage and distribution of the
final goods and related information flows,
from the manufacturing plant to the end user.
• covers all those activities (i.e. selecting,
organizing, transporting, etc.) which are
involved in the outflow of merchandise from
seller to the buyer.