Customer centered logistics starts with the marketplace and works backward to

Customer centered logistics starts with the

This preview shows page 5 - 6 out of 6 pages.

the right product to the right customer in the right place at the right time. Customer-centered logistics – starts with the marketplace and works backward to the factory or even to sources of supply. Outbound distribution – moving products from the factory to resellers and ultimately to customers Inbound distribution – moving products and materials from suppliers to the factory Reverse distribution – moving broken, unwanted or excess products returned by customers or resellers. Companies today are placing greater emphasis on logistics for several reasons: - companies can gain powerful competitive advantage by using improved logistics to give customers better service or lower prices. - Improved logistics can yield tremendous cost savings. - The explosion in product variety has created a need for improved logistics management. The goal of marketing logistics should be to provide a targeted level of customer service at the least cost. The objective is to maximize profits, not sales. Major Logistics Functions Warehousing o A company must decide on how many and what types of warehouses it needs and where they will be located o Distribution centres – designed to move goods rather than just store them. They are large and highly automated warehouses designed to receive goods from various plans and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible. Inventory Management o Just-in-time logistics systems – producers and retailers carry only small inventories of part or merchandise, often enough for only a few day sof operations. Transportation o 5 Modes:
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Truck – short haul/high value merchandise Rail – large amounts of bulk products over long distances Water – bulky, low value, non-perishable products over long distance Pipeline – used by owners to ship their own products Air – high rates, but fast delivery to distant markets Internet – digital products Logistics Information Management o Electronic Data Interchange (EDI) Integrated Logistics Management o This concept recognizes that providing better customer service and trimming distribution costs require teamwork, both inside the company and among all of the marketing channel organizations. Third-party logistics (3PL) providers are used for several reasons: Because getting product to market is their main focus, these providers can often do it more efficiently and at lower cost Outsourcing logistics frees a company to focus more intensely on its core business Integrated logistics companies understand increasingly complex logistics environments
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