Prepared by Assc. Professor Datin Dr. Norhayati Bt Hj.

Sharriff
 Be able to understand :
 1. The basic concept of integrated logistics
management.
 2. The systems approach in integrated logistics.
 3. Globalization and integration.
 Note:
 Class activity – Discussion in groups.
1. To support the need to develop in integrated operations.
2. Concept of total logistics
- basis to integrated logistics
- recent developments in logistics and distribution systems

Definition of Total Logistics Concept :

- It is interrelationship between different elements or subsystem in logistics

e.g. delivery transport and storage need to be considered as a supply chain

 Two major reason for ILS

 1. Realization of the importance and cost of each elements in logistics system.

 2. Progress made in the field of information technology, which enabled the
type of detailed analysis of logistics flow to be undertaken by the logistics
manager which was previously impossible.
 DPP is a technique of allocating all of the appropriate
costs and allowance to a given product.
 DPP technique can identify the costs of specific
products to individual customers and so provide
invaluable information for effective marketing
strategies
 MRP/DRP systems have been developed as
sophisticated, computerized planning tools that aim to
make the necessary materials or inventory available
when needed.

 MRP – an inventory control technique for determining

dependent demand for manufacturing supply
 MRP II – Improving productivity through the detailed
planning and control of production resources.
 DRP – application of MRP II techniques to the
management of inventory and material flow for
effective warehousing and transportation modes.
 The overall concept of JIT is to provide a
production system that eliminates all activities that
neither add value to the final product nor allow for
the continuous flow of materials.
 JIT are vitally linked to distribution and logistics,
including for :

 1. Production of goods that the customer

wants/demand.
 2. The production of goods when customer wants
them
 3. The production of perfect quality goods
 4. The elimination of waste (labour, inventory,
movement, space, etc) in production.
 Responsive action by the managers due to increasing number of companies
operating in the global market place.
 Multinational companies are extending their operations across wide
geography area (globally)
to support on a local or regional basis and outsourcing, manufacturing, storage
and distribution are practiced.
 Such company is truly global, where its structure and policy that represents a
global business.

 Typical factors of such business will include:

 1. Global branding
 2. Global sourcing
 3. Global production
 4. Centralization of inventories
 5. Centralization of information
 Such company should have ability for global requirement such as electrical
standards for electrical goods, language on packaging or left-/right-hand
driver alternatives in the automotive industries.
 To serve global market, logistics networks become far more expensive
and more complex.
 The major logistics implications of globalization are :
 1. Extended supply lead times
 2. Extended and unreliable transit times
 3. Multiple break bulk and consolidation options
 4. Multiple freight mode and cost options
 5. Production postponement with local added value
 Implication of globalization
 E.g. In jus-in-time global operated companies there is a tendency to
see order lead times increased and inventory levels rise because of the
distances involved and the complexity of logistics. But according to
just-in-time philosophy there is a desire to reduce lead times and to
eliminate unnecessary stock and waste within their operations.


 Discussion in group.