8815150-Introduction-to-Logistics-v101

7 Oct 2002 InterWorks Europe 1

Introduction to Logistics v101

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Introduction to Logistics



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Key Learning Points� Logistics is common sense and simple maths.� Logistics deals with moving what is needed when it is

needed at a reasonable cost.� There are several simple rules of thumb that you can

use� Planning, Largest Truck, Avoiding Bottlenecks,

Norms, and Simplicity are the five golden rules for logistics

� FIFO, Inspection, Records, Segregation, Tidiness, Inventory, and Neatness are the seven rules for good storage.



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Logistics?Logistics comes from the Greek word Logistikos, meaning skilled in calculating. Roman armies had administrative officers called Logista.The term Logistics originally applied to military logistics only, but now applied to all sorts of logistics.Logistics is applied common sense – the maths is simple, but logisticians have to make it look complicated to keep their jobs.



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What is Logistics?

Logistics is the process of planning, implementing, co-ordinating, and controlling the flow and storage of goods, services, and related information so as to deliver� what is needed� from where it is � to where it is needed� when it is needed� at the lowest cost



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Weight or volume

For some commodities, weight is the limiting factor, for others it is volume (the space that they take up).You can fit 10t of maize on a 10t truck, but less than 1t of empty jerricans.



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Rules of Thumb

There are basic rules of thumb for logistics planning:� People need 0.5kg of food per person per day� Family kits are equivalent to the weight of one weeks

food supply, but takes up as much space as three weeks food supply

� It takes the same amount of transport to move people from A to B as to move their food for 8 to 12 months over the same route

� You need about 1m2 of storage area per 1,000 people for each day's food stored (with a 2m stack height).



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The Logistics Chain

The Logistics Chain is the name given to the system that takes goods from the source to the destination.

� Port to Primary Warehouse� Primary Warehouse to Secondary Warehouse� Secondary Warehouse to Terminal Warehouse

A chain is only as strong as the weakest link..

Port ofentry

Enduser



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Information flow in Logistics System

Initial upstream information flow to trigger start of downstream flow

Downstream flow through pipeline

Upstream flow to control downstream flow

Donors Users



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Main document flows

Waybill with goods

Copies of waybills to confirm receipt

Donors Users

Requisitions and distribution reports



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Five Golden Rules for Logistics: PLANS

Plan, Plan, Plan, and publishLargest Viable TruckAnticipate bottlenecks and delaysNorms, standards, and proceduresSimplicity – avoid transit warehouses if possible



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Plan, Plan, Plan, and publish

Planning is the key to successful logistics. Planning allows you to:

� Estimate the resources you will need

� Anticipate potential problems

� Coordinate your plans with others

Publishing or sharing your plans with others helps to ensure that your plans do not conflict with those of others



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Largest Viable Truck..

The bigger the truck you use the lower the cost per tonne transported. However, bridges, ferries, loading, or road conditions may limit the size of truck you can use.



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Anticipate bottlenecks and delays

Bottlenecks are places in the logistics chain which restrict the flow through the chain. Example of bottlenecks may be limited handling capacity at ports, ferries, or limited distribution fleets..



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Norms, Procedures, and Standards

Standard procedures mean that:� Everyone has the advantage of lessons

learned in other operation� Staff don’t waste time reinventing the

wheel� The opportunities for fraud and theft are

reduced� Staff who are moved from one site to

another don’t need to learn a new system.

Every time you deal with a new problem, consider if it would be useful to develop a standard policy for this.



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Simplicity in the chain..

The logistics chain is the path which the food follows from the port of entry to the end user. Loading and unloading goods not only costs money, but also provides opportunities for theft or damage.



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Warehouse Rules

FIRST-INFirst In First OutInspectionRecordsSegregationTidy, clean, and dry-InventoriedNeatly and safely stacked



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First In First Out

Whatever arrives first in the store should be the first to leave. This policy is called First In First Out or FIFO. The advantages of this policy are:

� That the danger of stock in the warehouse getting out of date is minimised.

� The constant turnover helps to ensure that any problems are quickly discovered.



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Inspection

Warehoused goods need to be inspected on arrival as well as during their time in the warehouse. Inspection should be used to detect:

� Damaged containers and commodities� Spoiled commodities� Infestation� Pilferage or theft



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Records

You must record:� All receipts.� All issues.� The changing stock level in the store.

It is good practice to keep two records of movements, one in the formal store ledger and the other on the “stack cards” which record movement on each stack.



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Segregation

Commodities of different types should be segregated from each other to allow counting. It is particularly important to segregate damaged commodities from other goods.Sometimes, donors may require that commodities from different sources be segregated both in the store and in the records..



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Tidy, clean, and dry

The ideal warehouse is tidy, clean, and dry.� Tidiness means that goods are properly stored off

the floor on pallets and away from walls.� Cleanliness allows the rapid identification of damage

by rodents, insects, or birds.� Water is the enemy of almost all stored

commodities, it may corrode containers or lead to products germinating or rotting.



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Inventory (Stocktaking)

Stocktaking or taking an inventory ensures that the physical stocks match what is recorded.Stocktaking allows:

� Theft and fraud to be detected� Finding out of date commodities� Finding damaged commodities� The updating of store records



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Neatly and safely stacked

Neat stacking allows rapid counting of the goods.Safe stacking means that stacks are properly built, and the risk of stack collapses is minimised.Cross stacking makes stacks stronger.Stack heights may also be limited by the strength of the containers used..



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Key Learning Points� Logistics is common sense and simple maths.� Logistics deals with moving what is needed when it is

needed at a reasonable cost.� There are several simple rules of thumb that you can

use� Planning, Largest Truck, Avoiding Bottlenecks,

Norms, and Simplicity are the five golden rules for logistics

� FIFO, Inspection, Records, Segregation, Tidiness, Inventory, and Neatness are the seven rules for good storage.



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WarningAny advice given or implied in this presentation is of a

general nature and does not cover all situations. In some

cases it may be inappropriate to follow

whatever advice is given here. The author and

InterWorks Europe therefore decline responsibility for cases where any advice

given here proves not to be the best course of action.

This presentation was developed by InterWorks

Europe Limited. For more information contact:

John CosgraveInterWorks Europe

BallyshoneenBerringsCo CorkIreland

[email protected]: +353 21 7332134 Fax: +353 21 7332210

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