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Lecture 2 Introduction to Logistics & Strategies
Definition
Logisticsis themanagementof the flow of things between the
point of origin and the point of consumption in order to meet
requirements of customers or corporations. (Wikipedia, 2016)
Logistics management is 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 point
of consumption in order to meet customers requirements.
(Council of Supply Chain Management Professionals, 2016b)
Logistics is defined as the time-related positioning of
resources. It is also described as the five rights. Essentially,
it is the process of ensuring that goods or a service is: in the
right place, at the right time, in the right quantity, at the
right quality, at the right price (Chartered Institute of
Logistics and Transport (UK), 2016)
Logistics functions
To win tomorrows
competitive
battles, you must
grasp the nature
of these value
dimensions and
build the systems
to create and
deliver them.
Cost leadership. The cost leader is the company that can offer the product at the cheapest price.
In most industries, price can be driven down by economies of scale, by the control of suppliers and
channels, and by experience that allows a company to do things more efficiently. In most
industries, large companies dominate the manufacture of products in huge volume and sell them
more cheaply than their smaller rivals.
Differentiation. If a company cant sell its products for the cheapest price, an alternative is to
offer better or more desirable products. Customers are often willing to pay a premium for a better
product, and this allows companies specializing in producing a better product to compete with
those selling a cheaper but less desirable product. Companies usually make better products by using
more expensive materials, relying on superior craftsmanship, creating a unique design, or tailoring
the design of the product in various ways.
Niche specialization. Niche specialists focus on specific buyers, specific segments of the market,
or buyers in particular geographical markets and often offer only a subset of the products typically
sold in the industry. In effect, they represent anextreme version of differentiation, and they can
charge a premium for their products, since the products have special features beneficial to the
consumers in the niche.
Touch Points
Acquisition touch points, which are consistent with the economic concept of
value-in-exchange, occur as customers learn about and make purchase
decisions.
Lean
Agile
Responsive
Robust
Resilient