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Lecture Logistics theory - Lecture 3: Logistics systems

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A logistics system is made up of a set of facilities linked by transportation services. Facilities are sites where materials are processed, e.g. manufactured, stored, sorted, sold or consumed. They include manufacturing and assembly centres, warehouses, distribution centres (DCs), transshipment points, transportation terminals, retail outlets, mail sorting centres, garbage incinerators, dump sites, etc. Lecture Logistics theory - Lecture 3 will provide knowledge of logistics systems. | LOGISTICS SYSTEMS Logistics Systems A logistics system is made up of a set of facilities linked by transportation services. Facilities are sites where materials are processed, e.g. manufactured, stored, sorted, sold or consumed. They include manufacturing and assembly centres, warehouses, distribution centres (DCs), transshipment points, transportation terminals, retail outlets, mail sorting centres, garbage incinerators, dump sites, etc. Logistics Systems – cont’d Transportation services move materials between facilities using vehicles and equipment such as trucks, tractors, trailers, crew, pallets, containers, cars and trains. How Logistics Systems Work Logistics systems are made up of three main activities: Order processing Inventory management Freight transportation Order processing Order processing is strictly related to information flows in the logistics system and includes a number of operations: Customers request products by filling out an order form. Orders are transmitted . | LOGISTICS SYSTEMS Logistics Systems A logistics system is made up of a set of facilities linked by transportation services. Facilities are sites where materials are processed, e.g. manufactured, stored, sorted, sold or consumed. They include manufacturing and assembly centres, warehouses, distribution centres (DCs), transshipment points, transportation terminals, retail outlets, mail sorting centres, garbage incinerators, dump sites, etc. Logistics Systems – cont’d Transportation services move materials between facilities using vehicles and equipment such as trucks, tractors, trailers, crew, pallets, containers, cars and trains. How Logistics Systems Work Logistics systems are made up of three main activities: Order processing Inventory management Freight transportation Order processing Order processing is strictly related to information flows in the logistics system and includes a number of operations: Customers request products by filling out an order form. Orders are transmitted and checked. Availability of the requested items and customer’s credit status are then verified. Items are retrieved from the stock (or produced), packed and delivered along with their shipping documentation. Finally, customers have to be kept informed about the status of their orders. Inventory Management Inventories are stockpiles of goods waiting to be manufactured, transported or sold. Typical examples are • Components and semi-finished products (work-in-process) waiting to be manufactured or assembled in a plant; • Merchandise (raw material, components, and finished products) transported through the supply chain (in-transit inventory); • Finished products stocked in a DC prior to being sold; • Finished products stored by end-users (consumers or industrial users) to satisfy future needs. Why Hold Inventory?? Improving service level: Having a stock of finished goods in warehouses close to customers yields shorter lead times. Reducing overall logistics cost: Freight transportation is .

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