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Logistics

A view of logistics concept

The French Enterprise Logistics Association establish the logistics like an activities association with the objective of place, at the smallest price, certain quantity of a product in a place and time where a demand exist.
So the logistics involves all the transactions, that decide the products movements like: unites of production, storage's localization, supplying, physics flux management in the manufacture process, packing, storage and inventory control, products handle in freight unites and lots already for the clients, transportation companies and route design for they distribution.
The basic meaning of logistics in a company have been developed according to the elaboration of displacement concept, so if its conceive in a passive form, logistics is determinate like an obligated word in the Production-Distribution Process. In this case the logistics is exclusive guide for transport operation that decreases at last in the utility range. However, an active applying of the displacement, transform this, in a company strategy option. The displacement is a basic point in the Production- Distribution process, in this case is an expense, and autonomous cost, that in a progress form can be transformed in a generator pole of earnings over the production process.
The objectives of logistics consist in the coordination of physical distribution with materials supply, getting through the production, decreasing costs and increase quality in the service.
Three basic concepts in the system are necessaries to reach the logistics objectives, and they are:
Control the total cost
Avoid the sub optimization
Satisfy the cost compromises
The general objective of logistics System is to guarantee the service predicted solid and entrusts in a reasonable price.

Comparatives Logistics Strategies

The company is an organization crossed by a primary influx, integrated by three components: Capital, Work and Technology, and a secondary that is a result of the primary: Product. Besides the organization mechanism of control is articulated over and information influx.
The primary and secondary influxes are associated in functional directions of the corporate organization: Finances, Human Resources, Training, Technology, etc. The company activities faces: Materials management's or supplying, Production, Distribution, they are operational activities divisions over the influxes.
When an influx get through a phase, determines a group of operational activities. To the logistics concern the control of the influx. Not all the corporate organizations gives the same functional position to logistics, however all of them assume that logistics is responsible of the products influx control, that many times is called physical influx.
In the traditional companies, a functional logistics direction doesn't exist. The logistics functions are decentralized and dispersed, they are individual functions that work separately, and there's not product coordination or a product division, even a connection of a staff level. In these cases the next cases are common:
Excessive increase of inventories, that is, for the worried sales o commercialization department, that cant satisfy the demands.
Transport and storage contracts programmed in a wrong way.
Coordination absence between production and inventory of finished products

In an operational level, the development function of the logistics, in the company structure, is establishing an autonomy transportation department. Sometimes extend its activity, to the moving group like supplying, transference between factories and delivery to a depot or clients, until establish of a Physical and functional Distribution Logistics Direction. In some companies acquired the magnitude of a Physical Distribution Directive of Functional Logistics that is because it is responsible of all the necessary proceedings to carry the finished products, from the production units to the consumer or users. It controls the transportation proceedings and storage in the red of Distribution and makes sure the request and inventory management, making frequently, to integrate the functions of merchandise, participates in the productions planning and the supplying programmatic.

Transportation and Logistics System

An efficient and cheapest transportation system contributes to increase the competitive in the market, and increase the economy in the production and increase the product price.
In a little development for a transportation system , the market areas are decreasing comparatively to the ones that are around the production places. Other way, if the relatives transportation cost are less, then exist a diversity offer that allows to integrated series transportation series, its probably than different production centers compete in distant market.

The most extensive markets allow production economy scales. When the markets with a big production quantity, it can use the production means in an intensive way, generally in this situation a specialization work is followed. The easy way to integrate transportation series in fair prices allows in the work a special division, not only in a domestic way in the nationals also the internationals. The development in technique allows to disarrange the productive process in single faces, and they can displace in territories according with local competitive advantages, then they are fixed in series of logistic and transportation.

The transportation cost affect directly to the localization of production centers, storage, sale places, and available for the consumers.
The inventories requests are influence by the transportation mean more use: faster transportation systems and expensive they have to associated to a smaller stocks. It will be impossible to design integrated logistics systems Just in Time without the development in transportation.

The wrapping and packing are determinate for the transportation series, where they are introducing for distribution. The use of padderboard recycle or disposable, containers, and the use of special conditioners, it's associated with the act of the transportation means that integrate the serie.

The characteristics and quality of transportation services, modal an intermodal coordination, are the keys to determine the traffic management politics.

In the freight auto-transportation, emphasize the innovation techniques in production materials for them, and the road infrastructure, and the impact of not having rules for access in the industry.

In train the most important innovations are: aggressive merchandise focused to recover the traffic segments. The improvements in production technique of the service, the operation of mainly services design for specific clients; and the coordination with agents in others transportation means this is for a better enclose with the users.

The innovations in freights airlift have revolutionized the classic knowing of transportation costs and invalidating the traditional affirmation that the plane can only transport freights with a high value and smaller weight. In recent years emphasize the availability of planes special for freight, over a wide kind of equipment with wide fuselage, particularly those that allows to change a passenger room to a space special for freight. Also the airports nocturnal operation and the automatization process of freight and unburdening in special terminals. The relations of freight agents, to pick up and distribution the products in land. The terminals gives an efficient packing and stage line service, the attractive rates of innovations apply, transformed the aerial mode in an option difficult to avoid.

More often, particularly in International commerce, the transport series have a conception intermeddle multimodal. The services extension in ISO containers and aerial containers, with innovating equipment, for specific freights, attends the intermodal- multimodal transportation. Having in base international agreements and domestic rules. Also have been advances derived of the equipment improve of dragging modal used in intermodal- multimodal, outstanding train wagons for piggy back, small wheels chassises for use in maritime companies.

Finally we have to remember that the package services in different ways are resources that interest to logistics. These service years ago only consider confronting in emergency situations, but they are more used in distribution logistics.

Inventory System

In a logistics point of view, the most important problem vinculate to inventory is its cost and it can be kept lower if the inventory volume is extremely cheap. Obviously and inventory rupture, it means that a product isn't available, whatever is the inventory system applying, has a cost desirable to avoid. So is wanted a balance between the inventory necessities and the cost of keeping them.

The inventory politics it will integrated all the measure aspects of physical distribution. The logistics management must determine the quantity and localization of every item that it will be storage. The assigned level of inventory that the firm keeps, in material supplying, as well as in the product series distribution. Its associate with the way that physical influx management is realize, the kind of contract with providers and distributor, and the admitted cost to execute the service, for production and clients. In a way the determination of the inventory level involves a decision process in a stronger system.

When a products crate is offer, is necessary to make a difference in inventory management according to the product, using different security inventory levels as well as different reposition time. In this cases the main gold rule for the management of mixing is 80% 20 % in which must be understand that the products according to the sale fulfillment, have to be assigned in sub groups. One that integrates those which sales request imply an 80% of the total, and other with the 20% remanding, the assigned can be based on the volume and contribution of the business number, or a combination of both.

The inventory systems Just in Time (JAT) have been developed for Japanese companies. At present have been adopted for modern occidental companies to obtain a considerate disminution in logistics prices, and increase utilities, they are a key when the capital price is higher and when the product has competition in the market.

The most important impacts of this system over the transportation companies are the changes in modal assignation (transport preference, new market places for aerial transportation) new requirements in quality and service and the necessity of organize service in base of consolidated burden.

Container, Wrapping and Packing

Every product has physical properties, chemical behavior and also biologic that have to be respected in every presentation to the consumer and in its introduction in logistics in distribution series, particularly in transportation and storage process.

There are three distinctive elements to protect the product.

- The container that shows the product to the consumer. Product in a container.
- The wrapping that integrates commercial lots of the container with the product.
- The packing, that allows preparing product packaged lots in units for burden, for their transportation and in fractions of them, used for storage.

The containers show the qualities of the product and its identification, through a code for make easier its invoice and storage control.

Also have to show handle specifications and possible risks, as well as the conditions for a better conservation and, in this case, date of maturity or caducity.

The wrap has to show the specifications for its handle and placement for transport, the environment conditions that have to be follow and the risk in the handle, also indicates how many containers are inside, and if its require the indications about the variety inside.

Price Logistics System

The total price analysis concept is a key in the logistic system management. It's important to know that the structure of logistic price is share with a system in which their components are realated. The logistics cost system management plan a minimization of the total cost, more than the minimization of every component, in fact, generally, a reduction of only one cost, for a structure more o less optimized, take to an increase of the total cost.

The mainly components of a logistics cost systems are the next:

Price of customer service level
Price of transportation
Price of storage management price
Price of the process of customer request
Associated price of the lots size production
Price of inventory capital
Associated price of production supplying
Price Information

International Commerce Logistics

The bilateral and multilateral agreements for make easier the commerce between nations, as well as the globalization economy process, impulse a serie of reflection about the production contest in a universal market.

The competitive contest of a product in external commerce is defined for the commercialization roads, the logistics management of the serie of international physical distribution and the right execution of transportation series, in transportation services.

International Physical Distribution is the operation series necessaries to transfer the physic product, from the exporter site to the importer site. Every operation requires a service contract, this represents an expenses difficult for a company that work in external commerce obtain all the information about the components of cost, the experience shows that only some companies, which have many years in the international commerce, can make an integral analysis of IPD

The exportations competitive are particularly sensitive to the influx of business transactions of sales conditions. It isn't frequently that the final consumers are vinculated to the exporter producer, more than directly sales, the common is found in indirect sales with the participation of intermediaries. Commercialized companies, receivers, brokers, they are the artificer necessary of the external commerce, many times are realized sales without make a previously buys to the providers potentialities. Changes in the business transactions can be transmitted in drastic changes in competitive, generally for the changes in time opportunity and place that it can be placed the product on the market.

Synthesis wrought by Oscar Rico Galeana.

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