Distribution Requirement Planning (DRP) is a more sophisticated approach that considers multiple distribution stages and the characteristics of each stage. It is a logical extension of Material Requirements Planning (MRP), although there is one fundamental difference between the two. MRP is determined by a production schedule that is defined and controlled by the enterprise. On the other hand, DRP is guided by customer demand, which is not controllable by the enterprise. So, while MRP generally operates in a dependent demand situation, DRP operates in an independent environment where uncertain customer demand determines inventory requirements. The manufacturing requirements planning component coordinates the scheduling and integration of materials into finished goods. MRP controls inventory until manufacturing or assembly is complete. DRP then takes coordination responsibility once finished goods are received in the plant warehouse. The fundamental DRP planning is the schedule, which coordinates requirements across the planning horizon. There is a schedule Continue reading
Logistics Management
Location Analysis in Logistics Management
Plant and distribution center location is a common problem faced by logistics managers. Increased production economics of scale and reduced transportation cost have focused attention on distribution centers. In recent years, location analysis has been further extended to include logistics channel design as a result of global sourcing and marketing decisions. Global operations increase logistics channel decision complexity, design alternatives and related logistics cost. Location Decisions Location decision stage of location analysis in logistics management, focus on selecting the number and location of distribution centers. Typical management questions:- How many distribution centers should the firm use and where should they be located? What customers or market areas should be serviced from each distribution center? Which product lines should be produced or stopped at each plant or distribution center? What logistics channels should be used to source material and serve international markets? What combination of public and private distribution facilities should Continue reading
How Logistics Productivity Improvement Affects the Economy as a Whole as well as the Position of Individual Consumer?
Generally logistics refers to the inbound and outbound flow and storage of goods , services, and information within and between organisations. The Council of Supply Chain Management Professionals (CSCMP), which is the pre-eminent professional organisation for academics and practitioners in the logistics field, formed in 1963, defined logistics management as ” that part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods ,services, and related information between the point of origin and the the point of consumption in order to meet customers requirements “. Logistics Productivity Improvement and the Economy Logistics has become an enormously important component of the gross domestic product (GDP) of industrialized nations and thus affects the rate of inflation, interest rates, productivity, energy costs and its availability and other aspects of the economy as well. Ever changing business environment due to globalization, lead time reductions, Continue reading
Modes of Transportation in Logistics
Transportation infrastructure in logistics consists of the rights-of-ways, vehicles, and carrier organizations that offer transportation services on a for-hire or internal basis. The nature of the infrastructure also determines a variety of legal and economic characteristics for each mode or multi-modal system. A mode identifies the basic transportation method or form. Rail Network Since olden times, railroads have handled the largest number of ton-miles. As a result of the early establishment of a comprehensive rail network connecting almost all the cities and towns, railways dominated the intercity freight tonnage till World War II and in some cases of Europe, Asia and Africa they even connected the countries. This early superiority enabled railways to transport large shipments very economically. The capability to efficiently transport large tonnage over long distances is the main reason railroads continue to handle significant intercity tonnage and revenue. Railroad operations incur high fixed costs because of expensive Continue reading
Logistics Planning Process
To match the changing environment in the logistics due to the changes in the markets, competitors, suppliers and technology, there is a need for a systematic planning and design methodology to formally include the relevant consideration and effectively evaluate the alternatives. Read More: The Concept of Logistics Planning The logistics relational and operating environment is constantly changing. Even for the established industries, a firm’s markets, demands, costs and service requirements change rapidly in response to the customer and competitive behavior. Just as no ideal logistical system is suitable for all enterprises the method for identifying and evaluating alternative logistics strategies can vary extensively. However there is a general process applicable to most logistics design and analysis situations. The logistics planning process can be segmented into three phases: problem definition and planning, data collection and analysis, and recommendations and implementation.The following discussion describes each phase and illustrates the types of issues Continue reading
Export Packing List
The export packing list, which may be shown on the commercial invoice or separately, should contain item by item, the contents of cases or containers or of a shipment’s cases, with each item listed separately and with its weight and description set forth in such a manner as to permit a check of the contents by the customs on arrival at the port of destination as well as by the importer. The export packing list must be made in accordance with the instructions of the customer. Great care should be exercised to make certain that the contents of the packages are exactly as indicated in the export packing list. Any variation from what is shown in the export packing list, commercial invoice, or consular invoice may, and usually does, render the consignee liable to heavy fines. In short, in the matter of packing for overseas markets, the exporter should take Continue reading