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Logistical performance cyclesLogistical activities in logistical value chain Types - procurement, manufacturing support,

physical distribution Link all facilities in a value chain up and down

by information and product movementInput sensitive (customer order) & dynamic

Sensitiveness determines efficiency of operating system

logistical performance cycles link all participating firms and organizations in the value

chain

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Logistical Information Importance of information

Facilitation of decision makingInformation eliminates/reduces uncertainties Information links logistical activities into an

integrated process Information functionality

Functions of information are• Integration of logistical activities•Triggering the flow of materials

• Performance measurement•Logistical decision making

• Logistical strategy development

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Four levels of information functionality (functions) are

transaction, management control, decision analysis and strategic planning systems

Transaction levelThe most basic level of information activities Activities triggered by a customer order like

order entry, inventory assignment, order selection, shipping & invoicing

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Information about all these transactions answers customer queries

Rest of the functionality levels are on the base of transaction level

Management control level Logistical performance measurement and

reportingFeedback about customer service level and

resource utilization for evaluation and necessary action

Decision levelHelps managers identify logistical strategic

alternatives

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Strategic planning level Developing refining logistical strategyPrinciples of logistical information

Principles are availability, accuracy, timeliness, exception based LIS, flexibility, appropriate format

Availability Rapid availability is vital for responding to customer needs and management decisions

Quick access to information even in decentralized system from anywhere

Accuracy LIS Vs reality. Eg. inventory levels as per LIS Vs.

physical stock levels

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Timeliness Time gap between event taking place and

information appearing in LISAn item moving from WIP status to finished

goods status has major significanceIf LIS is not updated timely information leads to

wrong decisions

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FlexibilityAbility to handle diverse informational needs of

organization and customersAppropriate format

Right structure and sequenceEase in decisions like locating the inventory for

order processing or inventory planningLogistical information system functionalityLogistical information system integrates the

logistical operating system to provide the organization competitive edge

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Order managementOrder entry, editing the order for acceptability, checking inventory availability, confirming up

delivery dates, confirmation of customers requirements

Primary interface between customer service representative and logistical operating system

Order processingAllocation of inventory on real time or in batch

modeBack order creation

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Conflict resolution to match customer requirement

Order selection [to direct distribution to draw the inventory from a specific DC]

Distribution operationDirecting all activities in a distribution center to meet customer order requirement. This includes receiving, handling, storing, order selecting etc.

Transportation and shipping Plan execute and manage all transportation activities like shipment planning, scheduling, shipment consolidation, shipment notification, document generation and carrier management

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LIS for transportation and shipping involves shipper, consignee and carrier

ProcurementPurchase order preparation, modification and

releaseTrack and coordinate shipping and receiving

activities for consolidationException-based LIS

Highlighting problems and opportunities for management action

Handling exceptions, making manager free for judgmental decision making

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How a logistical information system is designed?

How many access points?How various access points are connected? LAN?

Satellite? Internet?Outputs-what do we want?

SoftwareHardware

Inputs-orders? Queries?Status files-information in real time