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GLOBAL LOGISTIC
MANAGEMENT
LECTURE 9: ORGANISING FOR EFFECTIVE
LOGISTICS

Agenda
1
2
3
4

Definition of Organisation
Traditional Logistics Management
Optimal Organizational Forms
Organizational Strategies used by
Manufacturers
5 Components of Corporate and Logistics
Mission Statements
6 Ways of Improving Logistics
Organizational Effectiveness
7 Logistics Management Evaluation
Measures
8 Summary

1 Definition of Organisation
An organisation is a social
arrangement which pursues collective
goals, controls its own performance,
and has a boundary separating it from
its environment.
Organizational structure is a mainly
hierarchical concept of subordination of
entities that collaborate and contribute
to serve one common aim.

2 Traditional Logistics Management
C E O
V P

M a r k e t in g

•Sales service
Responsibilities •Channels of
distribution
•Product
returns and
warranties

V P

P r o d u c t io n

•Manufacturing
•Purchasing/
procurement
•Traffic
•Warehousing

V P

F in a n c ia l

•Information systems
•Budgeting
•Inventory
•Data processing

Objectives
Large inventories
Small and
frequent
production runs
Decentralized
warehousing
Large product
assortment

Low inventories
Larger and infrequent
production runs
Plant
warehousing
Fewer products

Centralized
warehousing

2 Traditional Logistics Management
C E O
V P

M a r k e t in g

•Sales service
Responsibilities •Channels of
distribution
•Product
returns and
warranties
Objectives

Rapid order
processing
Generous
returned goods
policies
Fast transportation
Expedited shipments

V P

P r o d u c t io n

•Manufacturing
•Purchasing/
procurement
•Traffic
•Warehousing

V P

F in a n c ia l

•Information systems
•Budgeting
•Inventory
•Data processing
Inexpensive
order processing
More rigid returned
goods policies
Low cost
transportation

Control Exercised By Logistics
Executives Over Selected Logistics
Functions
Percent of Reporting Companies
Activities
Transportation
Warehousing
Inventory control
Order processing
Packaging
Purchasing and
procurement

1966

1976

1985

1990

1999

89%
90%

94%

97%

98%

70

93

95

97

88

55

83

81

79

74

43

76

67

61

55

8

70

37

48

39

15

58

44

51

41

3 Optimal Organizational
Forms

Hollow

corporation

◦ A small organization of managers and “idea
people” who hire external companies to
perform various types of activities, including
manufacturing, logistics, distribution, billing,
sales, and marketing.
Virtual

corporation

◦ A number of companies come ...
GLOBAL LOGISTIC
GLOBAL LOGISTIC
MANAGEMENT
MANAGEMENT
LECTURE 9: ORGANISING FOR EFFECTIVE
LOGISTICS
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