LOGISTICS AND SUPPLY CHAIN
PRINCIPLES OF BUSINESS
OBJECTIVES
At the end of this lesson students should be able to:
Explain the term logistics and supply chain
operations
Describe the links in the chain of distribution
https://www.youtube.com/watch?v=1PHwq1-f62k
Question
Is their anything you need right now?
What is the process/steps to get it?
Logistics & Supply Chain
Logistics is the process of
storage and transportation
through a number of elements
for products to reach the place
where they are needed.
Supply chain operations is the
way that a business gets its
resources, for example the
sources that supply a clothes
manufacturer with the material
to make the clothes it produces
and sell.
Components of logistics
Forward and Warehousing
reverse flow
Insurance Information
flow
Components of Logistics
Forward and reverse flow
The movement of goods can be a two-way process in that goods are not
only delivered to customers, but customers may also return some
products- reversing the process. For example, faulty or unsuitable goods
may be returned to the original seller for a number of reasons:
1. Unsuitable goods in original condition will be returned, and go back
into the distribution chain
2. Some goods will be returned for repair, perhaps having originally been
satisfactory
3. Some goods that were received damaged or have become damaged in
use will be returned to be trashed and reimbursement claimed.
Warehousing
A warehouse is a commercial building where goods are
temporarily stored or re-routed to other businesses.
They also carry out inbound functions that prepare items for
storage, for example packing and labelling and even some
minor production work such as assembling component parts.
The outbound functions are the shipping of goods to the final
destination.
Insurance
There are many risks involved in the chain of distribution.
For example, loss of power supply to a warehouse with
specialist storage rooms (such as, cool or freezer storage)
will result in considerable financial loss.
There are also risks of stealing or damage to goods in transit.
Insurance plays an important part in the chain of distribution
in providing compensation should such events occur.
Information flow
During the different channels that goods can flow through,
there is a flow of information between the sender (the
consignor) and receiver of the goods (the consignee).
Also, between the sender and those engaged during the
course of the journey where the people with responsibility
for the onwards movement or storage of the goods or
materials might change.
Activities In Supply Chain Operations
Movement and Processing of raw Storage of work in Delivering the
Transformation of
storage of natural materials into progress and
natural resources
resources finished goods finished goods finished goods
•A manufacturer •Component parts •This involves
•Transporting and
storing raw purchased raw stored until
• A manufacturer materials to process needed for the
materials such as
taking produce
mined ore for into finished goods. assembling into transportation
from farmers Where the
and processing
manufacturers to
production outcome
final product and of the finished
them in some
create into, say,
is not completely finished products goods from
metal, when they for onwards
way, such as need raw materials
finished but stored the point of
canning them for further work movement along
to supplied to the later it is referred to the chain of
origin to point
production process as work in progress supply. of destination
Distribution Chain
The distribution chain refers to all the channels of businesses that goods (or services)
pass through until they reach the final customer.
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1. Producers – their job is to grow or mine raw materials (primary production) to supply to
manufacturers who change the raw materials into an end product
2. Wholesalers – buy in bulk from the producer or manufacturer and sell in smaller
quantities to retailers (breaking bulk)
3. Retailers – buy from producers or wholesalers and sell in convenient quantities to the
final buyer
4. Consumer – the final purchasers of the product
Variations In Distribution Channels
1.
Primary production of goods is concerned with the
a) Distribution of goods
b) Manufacture of goods
c) Provision of raw material
d) Provision of goods to meet essential needs
1.
Primary production of goods is concerned with the
a) Distribution of goods
b) Manufacture of goods
c) Provision of raw material
d) Provision of goods to meet essential needs
2.
Which of the following is NOT a part of the
distribution chain.
a) Manufacture
b) Wholesaler
c) Contractor
d) Retailer
2.
Which of the following is NOT a part of the
distribution chain.
a) Manufacture
b) Wholesaler
c) Contractor
d) Retailer
3.
A supply chain is BEST defined as the
a) Storage of work-in-progress and finished goods.
b) Processing of raw material and finished goods.
c) Delivery of finished products from the point of
origin to the to the point of destination.
d) System of organisation and resources involved in
moving products from suppliers to customers.
3.
A supply chain is BEST defined as the
a) Storage of work-in-progress and finished goods.
b) Processing of raw material and finished goods.
c) Delivery of finished products from the point of
origin to the to the point of destination.
d) System of organisation and resources involved in
moving products from suppliers to customers.
