INTRODUCTION TO LOGISTICS

In specialized literature to describe activities that make up logistics today there have been
using a series of concepts such as business logistics, physical distribution, management
material resources, distribution logistics, marketing logistics, internal logistics, logistics
external distribution.

1.1. CONCEPTUAL DELIMITATION

A first definition of logistics belongs to a professional association in the United States. In 1976
this considers logistics as the set of operational processes to which goods are subjected in
their route to the consumer." The limits of this definition are obvious - the content of logistics was
reduced to only one of the facets of the current concept, namely physical distribution.

After 1980, logistics received increased attention, as evidenced by the emergence

logistics departments in the organizational chart of companies, alongside the divisions of
marketing. Nevertheless, many executive managers still perceive the role of logistics in a simplistic way.
being concerned about their own activity and the proper functioning of their department and neglecting
the impact of their decisions on the profitability and added value of products and services
I signed.

In 1991, the same American association redefines the content of logistics as follows: logistics
this is the process of efficient and effective planning and control of the flow of raw materials and
goods, services and related information, from the source to their destination, with a view to
satisfying the higher needs of consumers.

This approach significantly broadens the content of logistics. Logistics is no longer

privately exclusively as a set of operational processes to which the goods are subjected
from producer to consumer (the old concept of logistics). Another major advantage of
the new concept aims at addressing the activities that comprise logistics in close connection with
their contribution to the profitability and added value of the products offered to the consumer.

Logistics involves the planning, implementation, and control of physical flow of

materials and finished products, from their points of origin to the points of
utilization, in order to meet customer requirements under conditions of efficiency and effectiveness.

Logistics represents the strategic management process of procurement, movement and

the deposits of materials, semi-finished products, and finished products (alongside the flows
information corresponding to these processes within the company and the channels of
marketing, aimed at fulfilling orders at the lowest costs for the company.

The French Association for Logistics defines goods logistics as an activity

the aim is to provide at the lowest cost a quantity of a product
at the place and time where there is a demand.

Logistics therefore represents the capacity to organize and execute the flows of
people or goods to obtain what is desired in an optimal time and space with
minimum costs.
 In conclusion, we can define logistics as the totality of organizational, management, and
strategies that coexist within companies, the flow of materials (and associated information)
from their origin, through suppliers and up to the delivery of finished products to
customers as well as after-sales service.

1.2. CHARACTERISTICS AND OBJECTIVES OF LOGISTICS

In Philip Kotler's opinion, logistics involves the planning, implementation, and control of the physical flow of materials and products.
finite, information between the source point and the consumption point, in order to meet customer needs and obtain a profit
corresponding.

In a modern concept, logistics considers not only the flow of goods from producer to customer, but also the flow
the products and materials from suppliers to manufacturers. Logistics actually involves managing the entire supply chain,
built from the flows that contribute to the formation and addition of value by the participants in this chain (starting with the supplier
ending with the final consumer or industrial user). In these conditions, the logistics activity involves the administration
the entire physical distribution system of the marketing channel, namely the activity of suppliers, procurement agents,
market operators, channel members, and customers. These activities include forecasting, procurement, production planning,
the registration of orders, inventory management, storage and organization of transport, all of which actually constitute
the components of logistics. In such a context, currently the importance and role of logistics are increasingly significant, due to at least three
considerate.

Firstly, distribution constitutes a key element in serving customers, in satisfying

the increasingly demanding requirements of these. Moreover, more and more, efficient logistics is becoming the winning element in
attracting and retaining customers. Prestigious companies, serious companies know that they can attract more and more customers, that they can retain them only in
the conditions under which physical distribution meets their demands.

b) Secondly, logistics represents an important cost element in the activity of any company. The costs of activities
logistics are becoming increasingly higher, and under these conditions, companies need to intensify their efforts to carry out logistics.
efficient, in order to perfect the efficiency of its physical distribution system, so as to visibly reduce costs, with implications
positive, both for them and for clients. In this field, there are still serious reservations, and currently, it is being used quite little.
modern decision-making tools for coordinating transport activities, for efficient inventory management, for a
effective storage and handling of goods.

c) Thirdly, developments in information technology decisively influence logistics activities,

fully contributing to the improvement of the physical distribution of goods. In this regard, the increasing use of
computers, electronic scanning systems at the point of sale, uniform product codes, satellite recordings,
The electronic data exchanges and electronic funds transfers have allowed companies to create advanced systems for
order processing, for inventory control, for planning and optimizing transportation and transport routes. In
under these conditions, any retailer connected to its suppliers can order and receive in the shortest time possible.
the goods they need. In turn, producers and wholesalers can have access to accurate and relevant information related to
the level and structure of the stocks in the retail network, based on their needs, thus having the possibility to respond in a timely manner
optimizing their requirements and implicitly those of the population.

d) In the fourth place, the need to improve logistics activity has also been imposed by the increase in the variety of products, the range
their assortment. If at the beginning of the last century, a store had less than 1000 brands for sale,
products, currently, in a store like Bucur Obor, Unirea, etc. there are tens or even hundreds of thousands of varieties sold
products. Under these conditions, the activities related to their commercialization (ordering, transportation, storage, handling,
inventory control etc.) raises

complex problem.

Starting from such considerations related to the characteristics and importance of logistics in the current period, we will note
the fact that its objectives are just as complex.
 Of course, the starting point in designing a logistics system remains the study of consumer service needs and,
from here, the special attention that must be given to services and customer satisfaction. This is actually the first objective of the activity of
logistics, an objective that, reformulated, would be to offer the maximum number of services at the lowest costs. Of course, this remains a
The ideal, the objective in question must be regarded only as a trend, no logistics system being able to maximize the services offered to customers.
concomitant with maximizing distribution costs. This is because maximizing services involves fast delivery, stocks
relative to a wide range of products, as well as many other services, which taken together lead to an increase in costs of
distribution. In contrast, cost minimization involves less frequent delivery, smaller stocks, etc., all of which, along with others,
providing reduced services to customers. Under these conditions, the main objective of the logistics system must be and
ensuring the planned level of services at the lowest cost.

Alongside this primary objective, a second objective of logistics focuses on reducing space and time distances.
between the supply and demand of goods, in other words, between the two extremes of the distribution channel. Although such an objective can
it is privately, as a distinct objective, however, subordinate to the first, the reduction of the distances involved leading, in fact, to the achievement,
the fulfillment of the first objective, namely ensuring the planned level of services at the lowest cost.

Finally, a third objective, also secondary to the first, is to reduce storage and distribution costs. In this case as well, it ...
It can face the previous assessments. Establishing the objectives of logistics activities is a task of primary importance.
the management of the company, this contributing, along with other actions, to the achievement of the overall objective of the company, of the objective
for which this was established.

1.3. THE ROLE OF LOGISTICS WITHIN THE COMPANY

To emphasize the role of all members of a logistics channel in creating value

the final offer provided to the consumer, a useful concept is that of the value chain. The value chain
it allows for understanding how logistics integrates with other activities carried out
by the company, as shown in Figure 1.

Figure 1. The role of logistics in gaining competitive advantage

Support elements:

.
Company infrastructure;
. Organization, people;

Profit

Primary activities:

. Internal logistics;
. Marketing:
. External logistics.

Thus, the five categories of primary activities involved in obtaining the advantage
they are competitive:
 . Internal logistics: this includes activities associated with receiving, storing and sorting the necessary inputs.
product realization, such as material handling, storage, inventory control, planning
transportation and returning goods to suppliers;

. Production support operations: this represents the activities associated with transforming inputs into
finished products, such as ensuring the necessary materials as well as processing, maintenance
equipment, testing, printing instructions on packaging etc.;

. External logistics: includes activities associated with the collection, storage, and physical distribution of the product
to consumers, such as: distribution of finished products, warehouse organization, material handling,
transport, order management, and delivery planning activities;

. Marketing and sales: includes activities related to offering the product and convincing the consumer to
acquire the product (advertising, promotion, training of sales personnel, choosing the channel of
distribution, relationships within the channel, and price setting);

. The services are meant to increase the value of the product (installation, preparation, repair, provision of parts)
of change, adjustments, etc.).

1.4. THE ROLE OF LOGISTICS WITHIN THE COMPANY

In the context of the overall performance of the business, logistics activities must be viewed
in a systematic, integrative conception. The excellence of each functional logistics domain is
relevant only viewed from the perspective of the role it plays in the overall efficiency of
the company's logistics. The concept of integrated logistics is depicted in Figure 2.

Figure 2. Integrated logistics

Material flow Suppliers

Provisioning The support

Distribution
Logistics physics
The informational flow Clients

Logistics ensures the connection of a business with its customers and suppliers. Logistics is
seen as the interaction of two flows, the information flow and the raw materials flow,
materials, subassemblies, and finished products - final or industrial products.

1.4.1. Material flow

Logistics operations begin with the procurement of raw materials and end with
with the physical distribution of the final product to the consumer.

After the raw materials and materials are purchased, logistics adds value to them.
during their processing and distribution. Under optimal conditions, the raw materials, the materials,
The subassemblies and finished products gain value at each stage of the transformation.
their role in the final product and later in their distribution to the consumer. In other words, a
the subassembly will have a higher value once incorporated into a product or a product will be
more valuable than the sum of its parts. Also, at the moment of entry into
Consumed, a product will have a greater value than when it leaves the factory gates. For a
As a producer, there will be thousands of operations, each of which will contribute to the increase.
value of the final product. For a large retailer, logistics can start with purchasing
of products and can be finalized with their distribution to the final consumer. For
Logistics begins with the procurement of medications and the necessary equipment and is
conclude with post-operative assistance. Regardless of the size of the business or the field of
Logistics activity is essential in superior satisfaction of consumer needs.

1.4.2. Internal logistics

Internal logistics is referred to in some specialist works as "Procurement" or simply

simply "Purchase" or "Supply". However, these concepts do not encompass all operations.
specific internal logistics. Besides the actual purchase, internal logistics also concerns
activities associated with receiving, storing and sorting the inputs necessary for the production of the product, how
it will be the handling of materials, storage, inventory control, transportation planning and
return of goods to suppliers. In most cases, the internal logistics of a manufacturer
it is similar to the physical distribution of the supplier they are calling on - only that in the case of
The supplier's logistics operations target 'products' while in the case of the manufacturer it targets 'materials'.

1.4.3. Production support operations

The responsibilities of logistics concerning production do not focus on technical aspects but rather
degrade the response to the questions:

. What raw materials and materials are needed?

. When should the supply be carried out?
. Where will the raw materials be purchased from?
. What will they be transported with?

. Where will they be stored?

. Where will the production take place?

Logistics is therefore responsible for planning the above-mentioned aspects of

production and procurement of the materials necessary for production, at the right time and with costs
smallest.

1.4.4. Physical distribution

It is also known as external logistics.

Physical distribution concerns the movement of products from producer to consumer.

economic grouped along this route give the content of a distribution channel. All
physical distribution systems have a common characteristic: they connect producers and retailers,
the wholesalers, the other types of intermediaries, and consumers in marketing channels whose
the task is to deliver the product in the desired quantities and in the desired variety, achieving
the concordance of the request with the offer both in terms of time and space and sort.

1.4.5. Information flow

 The objective of the logistics information system is to identify the needs of different
functional and operational domains of logistics. The information constitutes support
the fundamentals of decisions.

In the various functional areas of logistics, the movement of materials involves needs.
different in terms of certain aspects, such as order size, availability of materials or
the urgency of a certain operation. The objective of the logistics information system is the harmonization
to all these specific needs. In other words, carrying out each logistic process, whether it is
it is about functions or operations, involving specific informational needs, being of
the competence of the logistics information system to obtain this information in a timely manner.

Within the information flow, two component flows can be identified: a flow
The informational functional is an operational one. If the operational flow provides data that
facilitates the integration of operational performance of logistics, the functional flow provides
essential dates for fulfilling logistics functions.

[1] from which the distinction between the content of the two notions in this work arises: the concept of 'materials' is used to
identify raw materials and materials regardless of their level of processing. The concept of 'product' is used
to designate the finite goods intended for sale.