The Methodology of Logistics Systems (Essay Sample)

The Methodology of Logistics Systems
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The Methodology of Logistics Systems
The paper describes principles of theoretical and methodological features of formation of the logistics system. Statistical reports of logistics business in the US in 2013 were analyzed in the paper. It has described methodological approaches to development and implementation of logistics management strategies. The study of logistics is necessary for realization of basic directions, restructuring some sectors of the national economy and state management. Disclosure of this concept has allowed to identify and describe objective conditions such as integration, informatization, and globalization of world economic processes. The paper describes some historical aspects of formation of logistics systems and meaning of this concept. Companies of the United States have been among the first who introduced logistical approaches to rational organization of their relationships with business partners.
In 1920, elements of modern logistics systems were used at Ford plants in Detroit with a complete cycle of production cars. Ironstone from the Great Lakes region was transformed into steel during one day. Workers were gathering a car from these details for several days. In 1926, Ford said: "The loss is the excess inventory of materials and products, which leads to higher prices and reduce salaries.” The current stage of development of the logistics services market in the USA is different in comparison with Europe where the logistics company is looking for ways to develop in the context of European integration.
What is “the logistics system”? Logistic system is the organizational mechanism that crosses functional boundaries of divisions of an enterprise with the help of a flexible coordination. The division is responsible for execution of the entire set of activities associated with the material flow to satisfy the demand of consumers. The manager of material flow formulates objectives and streamlines the system and its operation. The management is subordinate to the head of the enterprise as an important element of the hierarchical structure.
Logical system can be regarded as an industrial plant, territorial-production complex, or commercial enterprise. The purpose of the logistics system is to ensure availability of necessary goods in a certain amount and range. Every logistics system consists of a set of elements with functional connections and relations.
Logistic system should be flexible and capable of adapting to market changes with minimal cost. Planning of a flexible logistics system is performed on the basis of sensitivity analysis systems and market analysis. Sensitivity analysis system is aimed at determining basic parameters of the system. Market analysis is associated with assessment of the probability distribution of indicators, characterizing efficiency of the system based on the distribution of certain main factors. One can see that the logistic information system plays a crucial role in introducing the concept of logistics. It is the primary means of ensuring integration and coordination of functional subsystems into a unified enterprise logistics system ( HYPERLINK "/s/ref=dp_byline_sr_book_1?ie=UTF8&field-author=Andre+Langevin&search-alias=books&text=Andre+Langevin&sort=relevancerank" Langevin &  HYPERLINK "/s/ref=dp_byline_sr_book_2?ie=UTF8&field-author=Diane+Riopel&search-alias=books&text=Diane+Riopel&sort=relevancerank" Riopel, 2005).
It is vital to remember that information is not identical at different levels of the hierarchical structure of the company. The information system should provide necessary information to each hierarchical level for adoption of specific management decisions. However, implementation of the logistics system requires time and appropriate conditions of construction, in which the system will be efficient and reliable.
The paper discovers the concept of structure and functioning of this system. Logistic system is the organizational and economic mechanism of management of material and information flows. It includes material resources that provide movement of goods to logistics chain. Logistic system is an adaptive system with feedback, which performs certain logistical functions and operations. Typically, it consists of several subsystems and developed relationships with the environment. Logistics system can be viewed as a production company or territorial-production complex. The purpose of the logistics system is to deliver the required amount and assortment of the most prepared for consumption goods and products to certain places. Supply of raw materials and finished goods in due time has a positive effect on functioning of the entire economic system and allows to reduce inventories significantly in warehouses of enterprises. Logistics works for consumers. Functions of sales are realized in logistics with account for such following requirements as load, quality, quantity, time, cost, and destination.
Structure and operation of logistics system are based on some main factors like realization of the principle of system approach by integrating and ensuring precise interaction of all system components. Modern logistics is characterized by individualization requirements for technological and material handling of equipment at a high level of automation. Thus, it is a rejection of universality in favor of specific equipment requirements. When one creates a logistics system and designs its individual elements, one should ensure compliance with requirements of humanization processes based on creation of modern working conditions. Logistic systems operate in conditions of uncertainty. Therefore, an indispensable condition of the quality systems is the ability to adapt. High reliability and stability are fundamental principles of its functioning.
Types of Logistics Systems and Logistics Planning
Logistics is understood as a complex management of material and information flows. Therefore, definition of these limits is relevant today. In view of the systematic approach, logistics system can be formed at the level of any economic system. Obviously, logistics system is a plan that subordinates interests of enterprise divisions in accordance with objectives of logistics.
On the basis of these materials, one can assert that the primary importance for the stability of the system is accurate production planning, sales, and distribution. The priority is strategic planning rather than operational. Study of the behavior of the environment and the entire market is necessary for providing high reliability of the strategic plan and identifying a potential strategic situation. Strategic planning, according to experts, is a strong tool to fight against competitors, which uses the practice of military strategy. In the scientific forecast, scientists use historical approaches and methods of extrapolation.
In the area of logistics, it is also important to consider principles, according to which strategic planning is focused more on goals than on processes. Logistics is a unique area of creativity for strategic orientation. However, the development strategy of behavior of firms does not complete the planning process in the conditions of logistics. Strategic planning generates a chain of technical plans, identifying goals and operational actions in daily situations.
Regional specialization and rationalization are particularly relevant to SMEs with low cyclical flow of goods. According to conditions, it is advisable to create regional distribution centers to service the material flow. Logistic system can be highly effective and stable using modern technology. The technical base for optimal information management of logistics systems is multilevel ACS. Therefore, the idea of symbiosis of logistics with cybernetics is the condition of high efficiency of logistics systems.


Logistics Warehousing
Moving the material flow is impossible without concentration in certain places the required number of stocks. Warehouses are one of the most important segments of the logistics system. The objective necessity of enterprises is specially designed spaces for keeping stocks at all stages of the movement of material flow. It is due to the large number of different types of warehouses.
Logistics warehousing is the motion control of material resources in a particular territory. The object of logistics warehousing is commodity stocks and supplies in the process of storage, handling and packaging. The logistics processes in the warehouse are difficult because it requires coordination functions of supply inventory, processing and distribution of goods. Logistics in a warehouse encompasses all major functional areas. Therefore, this process is broader than the manufacturing process. Warehousing systems provides optimal placement of goods in stock and rational management. In the development of warehousing systems should take into account all the relationships and interdependencies between external and internal material flows.
Choice of two alternative types of warehouses is one of the most important issues in the field of storage. Both of them have advantages and disadvantages. What are the disadvantages of warehousing logistics? According to the compositions for own use, disadvantage is the high investment in capital construction and maintenance. Secondly, the problem is the absence of elasticity of economic processes. It is impossible to control seasonal demand. The problem is the low degree of control operations for warehouses of general use ( HYPERLINK "/s/ref=dp_byline_sr_book_1?ie=UTF8&field-author=Andre+Langevin&search-alias=books&text=Andre+Langevin&sort=relevancerank" Murphy &  HYPERLINK "/s/ref=dp_byline_sr_book_2?i...