Logistics Processes

The main logistics processes vary between different companies, different sectors and different industries. Typical examples are:

Order fulfillment – probably the most common that is quoted. Order fulfillment is concerned with the ability to turn a customer’s specified requirements into an actual delivered order. Thus, it embraces many of the traditional functions usually recognized as being a part of the logistics operation. Order fulfillment will involve the information elements of receiving and documenting an order through to the physical means of selecting and delivering the goods. For some ‘make-to-order’ manufacturing operations, this will also have an impact on the production process itself. Some companies maintain the divide between the order-taking component (which is information-based) and the order-delivery component (which is both information-based and physical). This is a reasonable first step in process redesign, but ultimately there should be a seamless process for the operation as a whole.

Product returns – There is a growing requirement in many businesses to provide an effective process for the return of products. This may be for returns that come back through the existing distribution network or through a new one that is specifically set up. It may also be for product returns that will be reworked or repackaged to go into stock, product returns for subsequent disposal, or packaging returns that may be reused or scrapped. In the light of developments in environmental legislation, this is a very important area for process design or redesign.

After-market or service parts logistics – For many companies the supply of a product or series of products is inextricably linked to the subsequent provision of service parts to support the continuous use of the initial products. For many logistics operations, neither the physical structure nor the associated processes for the original equipment are really capable of providing a suitable support mechanism for the spare parts as well. This is another example of the need for the development of processes specifically designed to undertake a particular task.

There are other associated processes that could also be relevant, such as:

  • supplier integration
  • quality
  • strategic management
  • maintenance
  • human resource management
  • environmental management.
Forms of Logistics Management
Issues and Challenges

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