Specificity of the logistics approach to material management - Logistics

1.3. Specificity of the logistical approach to management of material streams

The management of material flows has been carried out by mankind since ancient times. Logistics in the economic practice began to apply quite recently (and on a significant number of domestic enterprises has not yet begun to apply). The definitions of logistics do not always explicitly reflect the clearly expressed specificity of the logistics approach to the management of material flows. In this connection, let us dwell in detail on the fundamental difference between logistics and the traditional management of material flows.

Consider a chain consisting of several independent enterprises, through which a certain material flow passes successively. Traditionally, each of these enterprises is managed separately by the owner (Figure 2). The end-to-end material flow, piercing all enterprises, as a separate object of management is not allocated. Accordingly, there is no subject who would manage this flow and was responsible for its performance.

Fig. 2. Traditional approach to the management of the material flow, passing several enterprises

With a logistic approach, the control object is a through material flow (Figure 3). At the same time, the isolation of enterprises - the links of the material-conducting chain - is largely overcome with the goal of coordinated management of the through material flow. The right product starts to arrive at the right place at the right time. Promotion of the material flow throughout the chain begins to be carried out with minimal costs. At the output from the chain, the through material stream acquires planned, controlled indicators.

Fig. 3. Logistical approach to management of a material stream passing some enterprises

At the level of an individual enterprise, a chain through which a certain material flow passes successively, most often consists of different divisions of this enterprise (Figure 4). With the traditional approach, the task of improving the end-to-end material flow, as a rule, has no priority for any of these units. As a result, according to the famous saying about '' seven nannies child remains without supervision. The indicators of the material flow, as well as in the first example, have a random, difficult-to-control value and are far from optimal.

With a logistic approach, the enterprise is allocated and receives significant rights to the unit (most often the logistics service), the priority task of which is to control the through material flow, i.e. flow that comes from outside, passes the warehouses of the supply service, production shops, warehouses of finished products and then leaves to the consumer (Figure 5). As a result, the material flow indicators at the output from the enterprise become manageable.

Fig. 4. The traditional approach to the management of material flow at the level of an individual enterprise

Fig. 5. Logistic approach to the management of material flow at the level of an individual enterprise

The fundamental difference between the logistics approach to managing material flows and the traditional one is the allocation of a single control function of the material flows passing through the chain.

Logistic integration of chain links is carried out in four directions:

o planning - coordinated planning of material flows in individual links of the chain;

o technology - application of unified agreed technological solutions in the chain links;

o technique - a common policy of technical equipment and technical development of links;

o economy - coherence of economic interests of links.

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