IMPORTANCE OF LOGISTICS SYSTEM

Importance of Logistics System

Importance of Logistics System

1. Explain how effective inventory management benefits an organization?

Inventory management is one of the determining factors in the supply chain for retailer and consumer as well. Once prices are set, the ability to maximize profits in the business for the various participants in the chain is done with the help of adjustments in operating costs. It then becomes necessary to efficiently manage the quantity and variety of products i.e. Inventory Management is one of the keys to business success. An efficient inventory management generates cost savings for the whole chain and allows each of the players in the business to maximize its benefits. The professionalization of the business is reducing inventory, costs, and timing of development, delivery, and increased service. Therefore, this is how inventory management benefits an organization.

2. Discuss how quality efforts affect logistics systems?

Today, companies must decide the best way to store their products and items in their own warehouse. The proper inventory system and moving of the products and services to the customers at the right time must be done. In order to satisfy this condition, the company must give preference to the time, place, amount and other things as well. In this sense, some companies consider logistics and inventory management very useful. The mode of transportation must be utilized in a proper manner to maintain a good delivery system. Most of the companies are making best use of their logistics system. Today, there are many different definitions of logistics in many parts of the world. (Goodman, 2005)

3. Identify the challenges associated with incorporating quality principles in the logistics system?

The logistics does not only address the problem of distribution of output (bringing products from manufacturer to consumer) but also the problem of input distribution (taking the materials from suppliers to the factory). Its function is to optimize freight, make sure the products are transported in a good way to calculate time-outs and unloading, storage management and control. The ultimate goal of logistics is to reduce inventory levels and optimize the performance of the entire supply chain. It is not only employed as a competitive strategy to reduce costs but most importantly, it is used to give excellent customer service at reasonable costs. It is important that companies must consider the area of logistics as an integral part of their plans due to issues such as:

Customer service ...