Management Theory Review

Ballou explained that in the framework of manufacturing it appears from this is that the logistician can be involved with the movement of goods to and from his firm. However the responsibility extends to the movement of goods and components through the creation process as well. But the logistical might not deal with detailed production processes, machine scheduling, quality control etc. in the creation process. Also the manufacturing logistics definition excludes maintenance which is a part of military services’ logistics.

The mission of logistics in a small business company is to get the right goods or services to the right place, at the right time, and in the required condition, while making the best contribution to the firm. Value in logistics is a mixture of time, place, and cost. Logistics is approximately creating value – value for customers, value for suppliers and value for the firm’s stakeholders. Both creation and marketing have recognized the need for logistical activities.

Therefore the distribution of goods is recognized as an important activity in marketing. Ballou estimates, McClain and Thomas, who mentioned that function’s management has the responsibility for the delivery and production of physical goods and services. Hence delivery of goods at destinations required by the customer or the sales department is regarded as an integral part of the procedures management function. But Ballou argued that both marketing and production have more important core activities to execute and hence logistic activities may not get sufficient attention. According to him, marketing may get the job of fabricating possession value and production may get the job of fabricating form value.

A distinct logistics section would get worried with providing time and place value. Ballou regarded the interface problems that arise as more departments are manufactured and hence strains the need for coordination. The logistics function has to earn the highest possible return on investment over time as far as internal objective is concerned.

But to do this internal goal, it must first achieve exterior objectives. It has to earn revenue and reduce costs. Therefore a logistics system has to be designed and controlled considering its effect on income contribution that comes through the grade of customer support provided and the cost of logistics facilities, system, and operation.

Costs of logistics function include capital costs are operating costs. Wages, open, public warehousing (rented warehouses or warehouse space) expenditures, public transport expenses, financial expenditures related to inventory investment, other administrative expenditures are examples of operating costs. Capital costs are onetime costs, own warehouse, own trucks types of capital costs.

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Time value of money may be looked at and the objective can be indicated in net present value (NPV) terms or inner rate of return (IRR) terms. The study of logistics can focus on the management process and the skills needed to perform the activities involved. Management process can be briefly referred to as planning, organizing, and controlling.

The three important area regions of logistics are facilities location, inventory levels and mix, and transportation facilities. Logistics function can be involved with providing service levels to customers and handling costs appropriately for the company. All decision making requires information. The study of logistics includes practices and principles related to the above-mentioned issues.

Some of the issues are discussed at length in specialized texts related to the people’s areas and a logistician must look at them now in the context of logistics. The definitive guide to supply chain philosophy, strategy AND the practicalities of logistics and distribution. The Handbook of Logistics and Distribution Management is a step-by-step guide to setting up and managing supply chains to include maximum value to the organizations they serve. Filled with worked good examples and real-world data The Handbook of Logistics and Distribution Management offers complete coverage on all the main element areas of distribution, logistics, and supply-chain planning and management with clear and straightforward explanations.