supply chain managemnt
DIMENSIONS OF LOGISTICS
Macro Dimensions
I. Value-Added Role of Logistics
A. Form utility :
1. primarily the result of manufacturing or assembly operations
2. logistics provides form utility through its impact on shipment size and packaging
B. Place utility :
1. logistics provides place utility by moving goods from production surplus points to points where demand exists
2. reducing logistics costs expands market area for firm
C. Time utility :
1. logistics creates time utility by having goods and services available when demanded
2. this is accomplished through inventory management, transportation management, and strategic location of goods and services
D. Possession utility :
1. created primarily through the basic marketing activities related to the promotion of products and services
2. however, possession utility does not occur without logistics support
II. Economic Impacts of Logistics
A. Economic development and specialization :
1. transportation investment often a key to facilitating economic development
2. extent of market determined by logistics
3. as is ability to take advantage of comparative or relative advantage
B. Variety of goods : ability to provide a wide assortment of goods depends greatly on logistics capabilities
C. Prices : as already noted, logistics represents about 10% of GDP, and a much larger percentage of the value of many products and services
D. Land values : access to transportation service affects the economic potential of land
Micro Dimensions
III. Logistics Interfaces with Operations/Manufacturing
A. Length of production run :
1. traditionally, firms sought production economies by producing large volumes each time they had a production line setup or changeover
2. however, this led to very large inventory levels
3. move to “pull” systems rather than “push” systems
B. Seasonal demand : build-up of seasonal inventories to meet demand and to smooth production
C. Supply-side
Macro Dimensions
I. Value-Added Role of Logistics
A. Form utility :
1. primarily the result of manufacturing or assembly operations
2. logistics provides form utility through its impact on shipment size and packaging
B. Place utility :
1. logistics provides place utility by moving goods from production surplus points to points where demand exists
2. reducing logistics costs expands market area for firm
C. Time utility :
1. logistics creates time utility by having goods and services available when demanded
2. this is accomplished through inventory management, transportation management, and strategic location of goods and services
D. Possession utility :
1. created primarily through the basic marketing activities related to the promotion of products and services
2. however, possession utility does not occur without logistics support
II. Economic Impacts of Logistics
A. Economic development and specialization :
1. transportation investment often a key to facilitating economic development
2. extent of market determined by logistics
3. as is ability to take advantage of comparative or relative advantage
B. Variety of goods : ability to provide a wide assortment of goods depends greatly on logistics capabilities
C. Prices : as already noted, logistics represents about 10% of GDP, and a much larger percentage of the value of many products and services
D. Land values : access to transportation service affects the economic potential of land
Micro Dimensions
III. Logistics Interfaces with Operations/Manufacturing
A. Length of production run :
1. traditionally, firms sought production economies by producing large volumes each time they had a production line setup or changeover
2. however, this led to very large inventory levels
3. move to “pull” systems rather than “push” systems
B. Seasonal demand : build-up of seasonal inventories to meet demand and to smooth production
C. Supply-side