Introduction to Logistics v101

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7 Oct 2002 InterWorks Europe 1

Introduction to Logistics v101

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 issimple, 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




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 1tof empty jerricans.




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 weeksfood supply, but takes up as much space as three

weeks food supply

It takes the same amount of transport to move peoplefrom 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 peoplefor each day's food stored (with a 2m stack height).




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




Information flow in Logistics System

Initial upstream information flow to triggerstart of downstream flow

Downstream flow through pipeline

Upstream flow to control downstream flow

Donors Users




Main document flows

Waybill with goods

Copies of waybills to confirm receipt

Donors Users

Requisitions and distribution reports




Five Golden Rules for Logistics: PLANS

Plan, Plan, Plan, and publish

Largest Viable Truck

Anticipate bottlenecks and delays

Norms, standards, and procedures

Simplicity

avoid transit warehouses if possible

I t d ti t L i ti 101




Plan, Plan, Plan, and publish

Planning is the key tosuccessful logistics.

Planning allows you to:

Estimate the resources youwill need

Anticipate potentialproblems

Coordinate your plans withothers

Publishing or sharing yourplans with others helps toensure that your plans do not

conflict with those of others

I t d ti t L i ti 101




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.





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 capacityat ports, ferries, or limited distribution fleets..


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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-IN

First In First Out

Inspection

Records

Segregation

Tidy, clean, and dry

-Inventoried

Neatly and safely stacked



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g

First In First Out

Whatever arrives first in the store

should be the first to leave.

This policy is called First In FirstOut or FIFO. The advantages of

this policy are:

That the danger of stock in thewarehouse getting out of date is

minimised.

The constant turnover helps toensure 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 damagedcommodities from other goods.

Sometimes, donors may require that commodities from

different sources be segregated both in the store and inthe 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 storedcommodities, 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 thatstacks are properly built, and

the risk of stack collapses is

minimised.

Cross stacking makes stacks

stronger.

Stack heights may also belimited 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 impliedin this presentation is of a

general nature and does not

cover all situations. In somecases it may be

inappropriate to follow

whatever advice is givenhere. The author and

InterWorks Europe therefore

decline responsibility forcases where any advice

given here proves not to be

the best course of action.

This presentation wasdeveloped by InterWorks

Europe Limited. For

more information contact:

John Cosgrave

InterWorks Europe

Ballyshoneen

Berrings

Co Cork

Ireland

[email protected]: +353 21 7332134

Fax: +353 21 7332210

Introduction to Logistics v101

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