LOGISTICS SUPPLY CHAIN

LOGISTICS SUPPLY CHAIN

1. IS THE REASON FOR THE FLOW OF THE SUPPLY CHAIN

   • GENERATED THE FIRMS REVENUES
     • COMPETITIVE ADVANTAGE CAN BE CREATED

2. PHYSICAL/INTANGIBLE

   • PRODUCTS
     • CONSUMER
       • Convenience products, Shopping products, Specialty products.
     • INDUSTRIAL
     • LIFE CYCLE
     • PARETO LAW/ 80-20 RULE
       • bulk of the sales is generated from relatively few products in the product line. Pareto's law: 80 percent of a firm's sales are generated by 20
     • PRODUCT CHARACTERISTICS
       • The most important characteristics of the product that influence logistics strategy are: weight, volume, value, perishability, flammability, substitutability.
       • Products that are dense, that is, have a high weight-bulk ratio (e.g. printed materials, and canned foods), show good utilisation of transportation equipment and storage facilities, with the costs of both tending to be low. For products with low density (e.g., inflated beach balls, lamp shades), the bulk capacity of transportation equipment is fully utilised before the weight-carrying limit is reached. Also, the handling and space costs tend to be high relative to the product's sales price. As the product density increases, both storage and transportation costs decline as a percentage of the sales price and price may also be reduced by lower storage and transportation costs.
         • DENSE
         • LOW DENSITY
       • PRODUCT PACKAGING
         • FACILITATE STORAGE & HANDLING
         • PROMOTE UITILZATION OF TRANSPORT EQUIIPMENT
         • PROVIDE PROTECTION
         • CHANGE PRODUCT DENSITY
         • FACILITATE THE USE OF PRODUCT
         • PROVIDE RE-USE OF PRODUCT

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