In this step, we unpack the concept of logistics by looking at the 7 Rs. © Coventry University. CC BY-NC 4.0 In this step, we look at the 7 Rs of logistics. So, what are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as:
This definition is useful because it explains the function of logistics, getting things moved about in a synchronised fashion to meet a specific criteria such as timeliness, condition and the correct place! Another definition that also reflects the Rs of logistics is:
Many of the Rs of logistics are about planning, implementing and controlling movement to meet some form of customer requirement – in effect, highlighting the customer service aspect of logistics.
ReferencesThe Chartered Institute of Logistics & Transport UK (2019) Glossary of terms and dictionaries. [online] available from https://ciltuk.org.uk/Knowledge/Knowledge-Bank/Resources/Other-Resources/Useful-glossaries [6 August 2019] Council of Logistics Management (1991) © Coventry University. CC BY-NC 4.0 This article is from the free online Principles of Global Logistics ManagementCreated by Our purpose is to transform access to education.We offer a diverse selection of courses from leading universities and cultural institutions from around the world. These are delivered one step at a time, and are accessible on mobile, tablet and desktop, so you can fit learning around your life. We believe learning should
be an enjoyable, social experience, so our courses offer the opportunity to discuss what you’re learning with others as you go, helping you make fresh discoveries and form new ideas. Learn more about how FutureLearn is transforming access to education What is a supply chain strategy?A supply chain strategy explains how a company will bring goods into the business and get them out to customers as effectively as possible. Considering every phase in the supply chain, such as sourcing goods, logistics and delivery, the strategy optimizes operations to reduce costs and maximize profits. Supply chain strategies have come into the spotlight as volatile demand and complicated global markets have made supply chains more complex. It’s become vital for companies to have robust supply chain processes to overcome any supply chain disruption. Unfortunately, off-the-shelf supply chain strategies don’t exist. You need to tailor your strategy to your company, industry, and business goals. This article will discuss some areas that you should review to develop your strategy. Why do you need a supply chain strategy?A good supply chain strategy is about fulfilling demand, driving customer value, improving responsiveness, facilitating financial success and building a good network. The primary goals of efficient supply chain management should be faster delivery, higher efficiency and accelerated cash flow. A robust supply chain management strategy can also reduce risk and lower the impact of disruption in the supply chain. Processes and systems to help respond to issues will aid with faster recovery and enable you to build or maintain your competitive advantage. What is the focus of your supply chain strategy?There are two ways to develop your supply chain strategy.
Creating a supply chain strategyThere are three phases to creating a supply chain strategy:
Supply chain strategy designOptimizing your supply chain design starts with understanding your current supply chain. Where is it working well? Where is it causing you problems? Each part of the supply chain is connected, meaning a problem in one area can compromise the entire global network. If possible, use real-time data and big data insights to delve deep into each area of your supply chain. This will provide maximum analysis and understanding of your current setup and support sales and operations planning. Highlighting areas for improvement allows you to fix them. For example, having more accurate demand forecasting, warehouse automation, diversifying your supplier network or bringing new technologies on board to give you real-time data. Your strategies should have backup plans, with backup plans for your backup plans! Supply chain strategy planningFour components of supply chain planning:
Supply chain strategy executionSupply chain management (SCM) is how you execute your supply chain strategy. It involves coordinating suppliers, logistics, warehouses and orders across the global supply chain to ensure you can meet customer demand. Effective supply chain management can prevent damage to a company’s reputation and ensure it can meet business objectives and sustain a competitive advantage. To maintain or improve effectiveness, you must continually review your supply chain management execution to highlight any inefficiencies or gaps. You should keep on top of trends in supply and demand and any seasonal fluctuations.Understanding supply chain trends and new technology will also help you identify areas of improvement in your supply chain strategy and inventory management processes. Using software to execute your supply chain strategyAn effective supply chain strategy depends on the right technology and software to support its implementation. Appropriate software will help you save time and become more efficient. It can also help mitigate supply chain risks, which can help protect already tight profits. Examples of supporting software include:
Depending on company goals, more advanced systems, such as automated guided vehicles, robots, drones, and artificial intelligence, can also support supply chain strategies. If you’d like to discuss your supply chain strategy and how EazyStock can support inventory management, please speak to one of our team to arrange a demo. What is the right item in the right quantity at the right time?Simply put, logistics is “having the right item – in the right quantity – at the right time – at the right place – for the right price – in the right condition – to the right customer.”
What is meant by right quantity?The “Right Quantity”:
Obtaining goods in sufficient quantity to meet demand and maintain service levels while minimising excess stock holding (which incurs costs and risks), by: Demand forecasting.
What is a supply strategy?A supply chain strategy explains how a company will bring goods into the business and get them out to customers as effectively as possible. Considering every phase in the supply chain, such as sourcing goods, logistics and delivery, the strategy optimizes operations to reduce costs and maximize profits.
What is the term for the situation in which a company does not have enough inventory available to fill in order?Stockout costs FAQs
A shortage refers to a general shortage of goods, where a stock out refers to a specific item unavailable in inventory. A stockout can occur when there was lack of ordering, lack of capital to order, customer demand, or items on backorder.
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