Logistics Orchestrating Model
The Logistics Strategy addresses the logistics objectives, customer service objectives, and a strategy map to realise the formulated objectives. The customer service objectives are important to translate the logistics objectives to the committed logistics performance per customer group. In this way a link is created between logistics and marketing.
The Logistics Control forms the heartbeat of the logistics system (Logistics Orchestrating Model), which provides the logistics planning & control at three levels, namely: Strategic (logistics parameters);
Tactical (network planning & control); and
Operational (order management, goods flow management and resource management).
There is no generally accepted definition available of the logistics control concept according to Van der Vorst (2000). Logistics control is a model of the way the organisation controls the flows of goods and information. Amongst others, important elements in here are hierarchy in decision levels, type of decision making, positions of the Customer Order Decoupling Point (see also Hoekstra and Romme (1992)) and level of coordination (Vorst, 2000). For an effective and efficient management of operations a planning & control blueprint is essential to cover the different functions and scenarios within the organisation.
The Logistics Structure is the foundation (centre) of the Logistics System, which is characterised as supply chain structure per customer group with a clear CODP positioned to segregate downstream (customer order driven) from upstream (forecast driven) planning processes. Hoestra and Romme (1993) identified three types of logistics structures, namely Direct Distribution (production to user, stock point is at producer), Outlet Distribution (production to outlet, from the outlet to the user, stock point is at producer), and Indirect Distribution (more than 1 link in between producer and user, often a wholesaler or distribution centre, stock point moves from the producer to the next link). However, supply chains are more complex and can be seen as networks, as argued by Lambert, Cooper and Pagh (1998).
A Logistics Process is a range of activities that are executed in a particular order and in a particular manner (Van Geijn, 2005).
An efficient and effective Supply Chain needs a strong Information & Communication Technology backbone. ICT facilitates supply chain integration and visibility.
The Logistics Organisation describes the people (competency) and its organisation structure (centralised or decentralised). The logistics operation is highly dependent on people and goes through different hands. This means that much effort has to be put in the creation of a quality culture within the organisation and the creation of a quality standard that builds C4 (correct, consistent, complete and clear) procedures (Geijn, 2005).
The Logistics Performance Indicators are important for the continuous improvement of the logistics operation. The logistics control manages the processes. The performance of the processes is being measured by the Logistics Performance Indicators. These performance indicators provide the so-called cockpit of the organisation to manage the logistics processes. The actual set of indicators for one company is unique and depends on product characteristics, customers & markets, logistics processes and the logistics control itself.
References
Geijn, R. van (2005), Natural Business Excellence, Align Group, Thailand
Hoekstra, S.J., Romme, J.H.J.M. (1992), Integral logistics structures: developing customer oriented goods flow, London: McGraw Hill
Hoekstra, S.J., Romme, J.H.J.M. (1993), Op weg naar integrale logistieke structuren, Kluwer, Deventer (in Dutch)
Lambert, D.M., Cooper, M.C. and Pagh, J.D. (1998), Supply Chain Management: Implementation Issues and Research Opportunities, The International Journal of Logistics Management, 9(2), 1-19
Vorst, J.G.A.J. van der (2000), Effective Food Supply Chains – Generating, modeling and evaluating supply chain scenarios, Wagening University, Ph.D. Thesis, the Netherlands, 56-57
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2009 LBB International
