Inventory

Stock holding is central t Key issues include:

how much inventory should be held
where should it be held
Source: Gattorna, J.L. (1990) , Handbook of Logistics and Distribution Management , 4th ed., page 5.
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School of Logistics,Southwest Jiaotong University
Facilities are required to hold stock. Questions are:


how many facilities do we need where do we locate them how large should they be should they be mechanised or automated and to what degree
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School of Logistics,Southwest Jiaotong University
Logistics Mission
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Operating in a Turbulent Environment
Inventory directly impacts an organization’s customer service and its working capital
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Facilities

Deregulation has loosened controls in a number of areas, both locally and internationally Product changes are occurring more frequently and there are more products on offer Technology is evolving at an increasingly pace
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The Interface of Logistics

Production 1
Marketing 2

Logistics 3 Finance
It is difficult to visualize accomplishing any marketing, manufacturing, or international commerce without logistics. When consumers purchase goods- at a retail store, over the telephone, or via the internet – thy expect product delivery will be performed as promised. In fact, their expectation is for timely, error-free logistics every time they order.
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Communication

Modern communications and computer technology can provide us with inventory visibility back to our suppliers and forward to our retail customers’ outlets. In this way information can be substituted for inventory

Unitization and containerization have revolutionized the way in which products are stored and transported
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School of Logistics,Southwest Jiaotong University



Customers are becoming far more demanding
of their suppliers
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School of Logistics,Southwest Jiaotong University
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On Coping with Turbulent Time
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What is logistics?

In reality, people buy products for a range of factors apart from their tangible qualities logistics is about ensuring that the factors which influence customers’ choice are delivered cost effectively and in accordance with customers’ expectations
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Unitization

Unitization refers to the packages in which products are originally packed and the means by which those packages are assembled into unit loads
This flow starts when a customer decides to place an order and ends when the order is delivered to the customer and the customer has paid for the products received

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Logistics Defined
“the process of strategically managing the acquisition, movement and storage of materials, parts and finished inventory (and related information flows) through an organization and its marketing channels to fulfill orders most cost effectively”



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Inventory Facilities Communications Unitization Transport Materials Management Production Scheduling
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The Scope of Logistics
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Logistics Elements
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Material Management
It is not possible to consistently manufacture products to an appropriate standard without effective coordination and control of a manufacturer’s purchasing function and the inbound movement of raw materials, components and packaging materials
“The one certainty about the times ahead is
that they will be turbulent times, and in turbulent times the first task of management is to make sure of the institution’s capacity for survival, to make sure of its capacity to survive a blow, to adapt to sudden change, and to avail itself of new opportunities”