The importance of logistics management has increased due to some contributing factors such as nationalization and globalization, in the past few decades. Interest in Logistics developed due to the following factors: Production orientation, financial development, marketing requirements and distribution problems which in result brought about the need for analyzing Logistics Systems.
Logistics Management is the planning, organizing and controlling movement of goods and services from supply areas or points to customers. There are various types of Logistics aspects in Goods and Services delivery. The key element in a logistics chain is the transportation system, which joints the separated activities. Transportation is the physical movement of Goods and Services from one place to another place.
The link-node concept is utilized as the framework upon which the text logistics aspects are built. The Node is the fixed point in the Logistics system where commodities are at rest while the Link is the transportation System that connects the nodes. Transportation Management refers to buying and controlling of transportation service by either by either a shipper or consignee. Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring benefits to a maximum.
The operation of transportation determines the efficiency of moving products. The Progress in techniques and management principles improves the moving load, delivery speed, Service quality, operation costs, the usage of facilities and energy saving. Transportation takes a crucial part in the manipulation of logistic. Reviewing the current condition, a strong system needs a clear frame of logistics and a proper transport implements and techniques to link the producing procedures.
THE ROLE OF TRASPORTATION IN LOGISTICS
The transportation area is a highly complex arena that requires highly qualified individuals to operate. The area is filled with such complexities as many modes from which to choose, a multiplicity of carriers within each mode, varied combinations of modes and carriers to serve given links, a regulatory structure that affects the carrier operations, and a system of transportation pricing that defies all laws of logic.
The knowledge of the transportation system is very important to the efficient and economical operations of the logistics function in a firm. Transportation is the basic link among a firm's plants, warehousing, and raw materials sources (nodes). Transportation mainly bridges the gap between production and consumption.
Philippines - Manufacturing Site (Point of Origin)
The shipment of sub-assemblies from the Philippines to Curtis-Island follows a root of strategic logistics. Some of the attributes that are put in consideration while using water mode is the fact that: there are low rates, the sub-assemblies are transported in containers hence if well packaged breakages are minimal. Understandably is that large amounts of goods are transported per sail. Shipping of goods and services using containers facilitates the sub-assemblies firms to occur more expenses such as damages, high customs and high value production. Shipment is primarily long distance movers of low value, high density cargoes that are easily loaded and unloaded by mechanical devices. The only disadvantage of shipment of goods is long transit time and low accessibility. The cost incurred includes the Duty of service, duty of safe delivery, and the duty to charge reasonable Rates.
The requirements that all common carriers serve the public entails the carrier's transporting all goods offered to it. This suggests that the logistics manager is assured of supply of transport since the common carrier cannot refuse to transport the sub-assemblies for the firm. The safety of goods delivery in their original state is in the hand of the shipment system. This guarantees the logistics manager of safe delivery of goods. The duty to charge reasonable rates; constrains the carrier from charging excess high rates which is entirely possible with controlled entry. The total cost of shipment of the sub-assemblies is determined by the weight of products, distance and commodity service value. For a commodity of high value, the charges will be slightly high on transportation. This means that once in the market the product has a relatively higher price as compared to those low rates ones. Distance to be covered also plays a big role in total cost of shipment. In that the greater the distance the commodity moves: the greater the cost to the carrier and the greater transportation rate. Commodity is charged by the weight per unit. Shipment also offers some exception rates according to the goods are transported. Once goods are shipped to their final destination; they are kept in a warehouse waiting for collection or further transportation. The shipment facilities offer a secure storage of goods once on arrival. Then the goods are later picked using other modes of transportation.
Some goods may require more than one mode of transportation for various reasons.
The sub-assemblies are then loaded into trucks for wholesale and retail storage as they wait to be sold. Charges are upon the mode selection and rates considerations. Documentation serves the logistics with a legal recourse. The legal recourse shows what product is on transit. The place where the products are to be delivered, also the payments made during transportation. The Freight Bill provides the following information; invoice submitted by the carrier requesting to be paid, freight bill paying service, internal audits and external audits. Freight claims refers to a document that notifies a carrier of wrong or defective deliveries, delays or other delivery shortcomings. Shipment consolidation may occur: aggregating customer orders across time or place or both.
LOGISTIC MANAGEMENT SYSTEM
The inventory part of logistics has created competitiveness in the product market globally. Internationally inventions have come up to close that gap of goods and services monopoly by certain firms. Some of the contributing factors include time, place, possession utility and form utility. Putting in mind that shipment of goods may even take up to several months, supply of goods and services becomes limited by time. The time frame of waiting supply increases the demand of goods and services increase among the consumers. Time Frame considerations must be given to contractual obligations especially when considering time management. These are large pieces of equipment and it will be a logistical problem getting the items from the Philippines to Queensland. There are 50 sub-assemblies to be transported in a six month time frame. The time utility and place utility must be ensured in that goods and services are available in the market when needed. The customer demand for products depends on the weather, holiday season or everyday wants and needs. For example, the demand for an umbrella increases during the rain seasons. The demand for woolen jackets increases when winter approaches. Demand for sodas and other soft drink products may remain the same throughout the year because customers can drink these products at any time.
Form utility is that value a customer sees in an end-product good. The customer attaches the sense of what he or she is worth by the value of the product. Logistics ensures that handling of goods is a successful process till it reaches the buyer. Possession utility ensures at the end of all logistics the customers get the right to own the product at the right time. Considering the four types of utility in logistics management is very important. The logistics managers are able to understand consumer wants and makes better and informed decisions respectively. It also prepares the logistic manager on how to make proper arrangement for the next shipment of goods for supply stability in the markets.
Material handling and packaging in terms of logistics creates an effective handling capacity. The main objective is to create enough space and minimize wastage of resources used in creating more space. Another objective is to reduce the number an item or product is handled. Material handling also creates an effective working area for both the crew and the owner of the goods. Packaging facilitates easy identification of goods and provision of relevant information about the goods. Packaging ensures security of the goods is observed, no confusion, and proper management. Logistics management system for shipping entails the use of containers. A container is physical equipment that can be used in transportation of small shipments and can be moved on an intermodal basis as one shipment. A container is attractive to many logistics managers simply because of reduced cost. Such saving is the results of lower transportation cost, reduced inventory costs, reduced paper-work, and reduced packaging cost. The frequency of handling the actual commodity is greatly reduced by containerization, and with reduced commodity handling comes reduced risk of loss and damages as well as greater time efficiency in the transfer among modes. More important to note is that the use of codes conceals the identity of the shipper, the consignee, and the goods so as to reduce the possibility of pilferage.
Cost control in logistics is an important aspect in the provision of information such as accounting. The purpose of accounting is to make available the information, delineated by the logistics manager, which is necessary for the analysis. The goal of logistics cost analysis is to establish a base for cost management and control through an improved understanding of cost patterns and behavior.
Organization in logistics is another aspect that is equally important to the others. The advantage of the organization is that it establishes logistics as a responsibility center, permitting management by objective.
Logistics managers must not only stay abreast of new development inn industry and ways of meeting challenges and solving problems, but they must be able to integrate these changes in the daily business operation.
Different logistical components should be analyzed to bring more development and new plans for the future. Areas such as transportation, they should work on cutting short on the dependence of foreign oil, emphasize more on fuel efficiency, choice of appropriate modes, need for government funding , and growth for cooperative transport arrangements.
They also need to change the warehousing facilities for better services. Automation, reduced paperwork, proper control and maintenance of the warehouse, and avoiding energy constraints should be changed. Billing and rating could be analyzed for better information system. Maintenance of the equipments facilitates improved information systems. The future of logistics managers looks bright in terms of their importance to their organizations and industries.