Before I joined the Logistics Management class, I had a very vague idea into what logistics was all about. I essentially thought of logistics in the sense of international shipping services, which I have come to understand was not farfetched. However, since joining the class, I have learnt what logistics entails and how to handle various logistical concerns in a company. Logistics in a broad view is a detailed organization and eventual implementation of a complex operation. In a business sense, logistics can be simply defined as the flow of goods and or services from a point of origin to a point of consumption. Logistics is in charge of managing resources required to achieve the “flow of things”. Some of the resources managed can include physical items such as equipment, food, material. Other resources include abstract resources such as time or information.
Looking back at the Gamers Helping Gamers business idea scenario based on what I understand now from a logistical perspective, I would first align the logistical management requirement for a business. Logistical management is described as part of the supply chain management process. Logistical management handles the planning, implementation and also provide control for effective forward and reverse flow of goods. The Reset business, plans to buy old games from gamers who have upgrade their games and no longer require the older versions. In logistical planning, the first area that should be handled is the procurement logistics.
Procurement logistics will help cover the process of selecting suppliers (gamers with old version games and equipment) and negotiate the most cost effective and reasonable contracts for the delivery of the old games. This process will involve working with the marketing department to conduct a market research and doing a requirement planning for buying the old games and supplier management. After that is complete a production logistics is addressed.
Production logistics will involve the processes required from the point of origin (gamers selling old games) to the delivery to warehouse and eventual distribution of the old games to secondary markets. Production logistics will include organizing the company concept and layout planning on how to cover demand and supply factors and how to control the market forces. The production logistics will deal with ensuring enough production (the old games) is available to cover anticipated market discovered in the marketing research. From this stage, we move to the distribution logistics.
Distribution logistics will deal with distribution/ delivery of the purchased games. This process will involve order processing, warehousing the orders and finally distributing the orders through shipment logistics/ transportation. The gamers helping gamers business should at this point consider which distribution mechanism works best and if there is need to include a sub-contractor, distribution logistic handle the distribution aspects.
Finally, a disposal logistics should be considered for the reverse logistics purposes. Some of the games may be found to be completely defective and unusual. Therefore, Reset should consider how to retrieve the games from the customers and components that are reusable integrated with others from disposable games and a new model refurbished. This will help the company save on production cost while enhancing company’s effectiveness.
If the company feels inadequate in handling any of the logistical requirement discussed above the company can decide to hire a third-party logistics company to handle the logistical aspect while Reset Concentrates with the business part of the company like marketing.
For this advice, I used the various logistics management fields to categorize the business needs and placed each business requirement in a specific logistical field then analyzed it from the logistical field perspective and determined how best to handle the requirements logistically. Doing this analysis based on the different logistics field helps place greater emphasis at the effectiveness of the business idea rather than a generalization of the logistical requirements. This approach is the best because every aspect of the supply chain management is accurately handled and sane decisions can be taken from the analysis rather than hypothetical analysis of market expectations.
In the first week, I would have looked at the scenario purely from a transportation point of view. However, I have analyzed the scenario from a full logistical perspective in terms of the supply chain operations. In the first week, the ideas that I would have given to my friends in terms of logistics would not have factored in a lot of what I have covered in terms of efficiency and control. The first week argument would not show the depth of logistics requirements in the new company and the company’s logistical challenges would not have been completely covered from the point of origin. That is, from buying of the old games to warehousing and sourcing markets a for distribution of the games. Something very important covered now is the disposal logistics. In the first week, I could not have given any input on reverse logistics or disposal logistics. As explained in the solution above disposal logistics is a very important part of a company logistical planning. It helps come up with grading criteria for grading all games they acquire from the gamers and plan for how to receive back any game sold that is defective. This grading can also provide a supply solution that some parts can be reintegrated from different games categorized as defective and develop a refurbished game.
Some of the questions that still linger on about logistics management include:
How important is it for a company to use an internal logistics management system versus outsourcing logistics services? Outsourcing has become a major business phenomenon in this century ;how would it fit in the logistics department?
How will logistics requirement change in the future and what impacts will it have on startup business like Reset? Another area of confusion is in terms of how to run just-in-time operation without being lean or vice versa? Another question is in terms of push and pull is supply chain and logistics interchangeable? And finally, how do you differentiate supply chain and Logistics in transport distribution?