Logistics and Distribution Management
Introduction
How much goods are sold cross borders (globally) mid sixties invention of the
container that’s why it boomed, key elements to a have world wide trade
Sales and marketing and finance they decided the strategy and made the calls in
the old days but know due to covid as well, that the operational, executing jobs
(logistics and supply chain) are very important. If you’re product does not arrive
at the end customer there is no product there is no cash, so now IT and
operations are becoming very important. You move from purely operational,
executing thinking too much more strategic thinking.
Why do it? What’s the need?
Some definitions & Recap
Transport
Transport refers to the movement of people or goods from one place to another
Logistics
Logistics refers to the transportation and storage of materials, parts and products
in a supply chain. Logistics includes inbound and outbound processes to and
from warehouses, as well as internal and external materials handling and
,transport operations. It also includes the execution of services and the transfer of
information between the various stages of a supply chain.
Distribution
= The process of transporting products from a manufacturer, storing them, and
selling them to different stores and customers
Why using logistics?
7R objective, as it is often viewed as a good summary for the main objective of
logistics. Logistics should provide:
The Right goods (i.e. as ordered)
In the Right quantity
With the Right quality
At the Right time
At the Right place
At the Right cost
At the Right sustainable impact/footprint
Supply chain (integrated logistics)
A supply chain encompasses all activities (operations) needed to convert raw
materials into final products, from sourcing through component manufacturing
and final assembly to distribution to end- markets, and including all necessary
materials handling and storage (in short, logistics) activities. More and more, it
also includes the handling of return flows of products and possible re-use of
materials and components, in which case we speak of closed loop supply chains.
Almost always, these activities are not executed by only one industry but instead
encompass a number of companies and organizations jointly operating in a chain
or network, referred to as end-to-end supply chains
Distribution: The outgoing of products, delivering it to the end-customer
Main flows/blocks in a logistics chains:
Inbound logistics
Warehousing / Value added logistics
Outbound / distribution logistics
, Returns & Closed Loop Logistics
(Pooling)
Pooling= return flow of the pallets (for example in retail stores all goods are on
pallets) and the stores are renting this from a company specialized in pallets (per
pallet it’s 15 euros) avg 32 pallets in a truck (so the empty pallet value is 500
euro) so you need to organize this return flow
Roll cage: 200-250 euro and you can put 60 in a truck so you speak about a high
value so pool management is very important and you can’t underestimate this
return flow
Many legislation regarding waste management, reverse management, recycling,
re-use, remanufacturing (you need to be able to prove the volume inside the box
that is 50% more otherwise you are transporting to much air, so it’s affecting the
whole logistic flow
Legislation in Europe for technology: You are already paying for the return
logistics to bring the product back to the manufacturer to bring the product back
to his raw materials
The sales and commercial part is very visible, you know what it cost and where
did you get it from but all the rest is not visible you are not able to answer the
question where did your product being build
, Product is a mix of the sales and the whole logistics behind it ,the dark side, the
not visible one
What should it do?
The product of Logistics
Product related aspects to influence Logistics & supply chains
Type of product
Mix of characteristics & customer expectations
Specs of the product (Fresh, Ambient, etc.)
Characteristics
Packaging
Price
Due to customer expectations the type of product has different expectations and
have a whole different logistics and distribution chain (for example a car: Ferrari
vs dacia) totally different expectations but same type of product
Consumer products: Products used or consumed by the end-consumer
CONVENIENCE PRODUCTS
Repeated bought products (limited price comparison)
SHOPPING PRODUCTS
Comparison on price and quality
SPECIALITY PRODUCTS
Bought in limited numbers during lifetime
Takes effort
Industrial Products
Products used for production of other products and services
RAW MATERIALS/ SPARE PARTS
Part of the end product
Bulk & pallet transport
Food is convenience (daily basis)
Shopping is not on a daily basis but several times in a year (clothes)
Specialty is a car (not on a yearly basis)
Lead time will increase over different type of products (pizza 30 min, car months)
You need to be very speedy on products where the profit margin is very low
(convenience)
And where the profit margins are a lot higher you have more time to produce it
Introduction
How much goods are sold cross borders (globally) mid sixties invention of the
container that’s why it boomed, key elements to a have world wide trade
Sales and marketing and finance they decided the strategy and made the calls in
the old days but know due to covid as well, that the operational, executing jobs
(logistics and supply chain) are very important. If you’re product does not arrive
at the end customer there is no product there is no cash, so now IT and
operations are becoming very important. You move from purely operational,
executing thinking too much more strategic thinking.
Why do it? What’s the need?
Some definitions & Recap
Transport
Transport refers to the movement of people or goods from one place to another
Logistics
Logistics refers to the transportation and storage of materials, parts and products
in a supply chain. Logistics includes inbound and outbound processes to and
from warehouses, as well as internal and external materials handling and
,transport operations. It also includes the execution of services and the transfer of
information between the various stages of a supply chain.
Distribution
= The process of transporting products from a manufacturer, storing them, and
selling them to different stores and customers
Why using logistics?
7R objective, as it is often viewed as a good summary for the main objective of
logistics. Logistics should provide:
The Right goods (i.e. as ordered)
In the Right quantity
With the Right quality
At the Right time
At the Right place
At the Right cost
At the Right sustainable impact/footprint
Supply chain (integrated logistics)
A supply chain encompasses all activities (operations) needed to convert raw
materials into final products, from sourcing through component manufacturing
and final assembly to distribution to end- markets, and including all necessary
materials handling and storage (in short, logistics) activities. More and more, it
also includes the handling of return flows of products and possible re-use of
materials and components, in which case we speak of closed loop supply chains.
Almost always, these activities are not executed by only one industry but instead
encompass a number of companies and organizations jointly operating in a chain
or network, referred to as end-to-end supply chains
Distribution: The outgoing of products, delivering it to the end-customer
Main flows/blocks in a logistics chains:
Inbound logistics
Warehousing / Value added logistics
Outbound / distribution logistics
, Returns & Closed Loop Logistics
(Pooling)
Pooling= return flow of the pallets (for example in retail stores all goods are on
pallets) and the stores are renting this from a company specialized in pallets (per
pallet it’s 15 euros) avg 32 pallets in a truck (so the empty pallet value is 500
euro) so you need to organize this return flow
Roll cage: 200-250 euro and you can put 60 in a truck so you speak about a high
value so pool management is very important and you can’t underestimate this
return flow
Many legislation regarding waste management, reverse management, recycling,
re-use, remanufacturing (you need to be able to prove the volume inside the box
that is 50% more otherwise you are transporting to much air, so it’s affecting the
whole logistic flow
Legislation in Europe for technology: You are already paying for the return
logistics to bring the product back to the manufacturer to bring the product back
to his raw materials
The sales and commercial part is very visible, you know what it cost and where
did you get it from but all the rest is not visible you are not able to answer the
question where did your product being build
, Product is a mix of the sales and the whole logistics behind it ,the dark side, the
not visible one
What should it do?
The product of Logistics
Product related aspects to influence Logistics & supply chains
Type of product
Mix of characteristics & customer expectations
Specs of the product (Fresh, Ambient, etc.)
Characteristics
Packaging
Price
Due to customer expectations the type of product has different expectations and
have a whole different logistics and distribution chain (for example a car: Ferrari
vs dacia) totally different expectations but same type of product
Consumer products: Products used or consumed by the end-consumer
CONVENIENCE PRODUCTS
Repeated bought products (limited price comparison)
SHOPPING PRODUCTS
Comparison on price and quality
SPECIALITY PRODUCTS
Bought in limited numbers during lifetime
Takes effort
Industrial Products
Products used for production of other products and services
RAW MATERIALS/ SPARE PARTS
Part of the end product
Bulk & pallet transport
Food is convenience (daily basis)
Shopping is not on a daily basis but several times in a year (clothes)
Specialty is a car (not on a yearly basis)
Lead time will increase over different type of products (pizza 30 min, car months)
You need to be very speedy on products where the profit margin is very low
(convenience)
And where the profit margins are a lot higher you have more time to produce it
