Chapter 2.

Fundamentals of
Logistics System
Management
2.1. Concept and Model of
Logistics Management
2.1.1. Concept of Logistics Management

Concept of Management Concept of Logistics

Management is the process of planning, organizing, leading, and Logistics is the planning, organization, coordination, and execution of
controlling the activities of the members within an organization and connecting spatial and temporal dimensions within a system. The
utilizing all other organizational resources to achieve the set objective of logistics is to meet customer demand in a timely manner,
objectives. with the right quality, and at a reasonable cost.
2.1.1. Concept of Logistics Management
Logistics Management is the process of planning,
organizing, controlling, and monitoring the activities related
to the management of the flow of goods, services, and
information from the point of origin to the final point of
consumption in order to ensure the efficiency and
effectiveness of the supply chain.

Logistics management focuses on optimizing activities such

as transportation, storage, packaging, distribution,
warehouse management, and inventory management to
achieve goals related to cost, time, and quality of service.
Purpose of Logistics Management

Optimize Transportation and Minimize Cost and Time Increase Customer Satisfaction
Storage
Effective logistics management helps Optimized logistics management
The main objective of logistics reduce transportation, storage, order meets customer expectations for
management is to be efficient and processing costs, and shorten accuracy and speed of delivery.
flexible in transporting and storing customer response time.
goods, ensuring a continuous supply
chain.
2.1.2. Logistics System
The Logistics System is a network that connects various activities and components in the supply chain. It operates as a synchronization mechanism, ensuring
tight integration between activities to optimize the flow of goods, information, and finance within the supply chain.
Basic Components and Activities of the Logistics
System
2.1.3. Functions of Logistics Management
The main functions of logistics management include:
01. Order Processing
The order processing workflow includes the following main steps:

1. Receive and confirm the customer's order, including verifying the validity of the order and customer information.
2. Transfer the order to the warehouse department to prepare the products and pack them.
3. Establish a transportation and delivery plan to deliver the order to the customer within the committed time frame.
4. Monitor and update the order status to ensure on-time delivery.
5. Quickly and effectively handle any customer change requests or complaints.

An efficient order processing workflow is key to meeting customer needs, increasing satisfaction, and retaining customers in the long run.
01. Order Processing

Order Placement
Detailed order information is sent to the Order Management System (OMS) to determine the appropriate warehouse based on the delivery address and product availability.

Pick Inventory
Employees collect the necessary product quantities from the warehouse, using barcodes or automated technology to fulfill the order.

Sorting
Products are sorted by delivery location, either manually or automatically using a sorting machine.

Packing
Products are carefully packed into appropriate shipping containers, along with address information and delivery instructions.

Shipping
The order is delivered directly to the customer or combined with other orders to optimize the efficiency of the delivery process.
02. Products and Material Handling
Products and Material Handling: Ensure that products and materials are handled properly during different stages of the supply chain, from receiving to delivery to other
departments or customers.

Product and material handling is connected to inventory management and supply control, and has a significant impact on the efficiency of logistics operations. Optimizing
the product and material handling process helps reduce costs, increase productivity, and ensure product quality.
02. Products and Material Handling
Product and Material Handling activities include:

• Receive Goods: Receive, inspect the quantity and quality of goods when they are brought into the warehouse.
• Sort & Store Goods: Arrange goods by type, characteristics, and storage requirements.
• Handle & Transfer: Ensure goods are fully prepared according to order requirements.
• Manage Damaged Products: Manage defective or damaged products, determine appropriate handling (return, repair, or
discard).
03. Inventory Control Management
Inventory control management is an important part of logistics management, involving tracking, controlling, and optimizing inventory levels in the supply
chain to avoid excess or shortage of goods.

Inventory cost is the most improtant

Inventory Control Management
Inventory Tracking Safety Stock Level
Use the warehouse management system to accurately and continuously update inventory quantities.

Demand Forecasting -> Master Plan

Analyze sales data and market trends to plan inventory levels that match future demand.

Periodic Inventory Audits Kim kê hàng hóa

Conduct periodic inventory audits to ensure the actual inventory quantities match the system records.

Manage Excess and Shortage Inventory

Implement adjustment measures when facing excess or shortage inventory situations.
ABC Inventory Control System
The ABC inventory control system is a method of
classifying goods based on the Pareto principle (the 80/20
rule).

This method divides goods into 3 groups based on value

and quantity:

• Group A: High-value goods, low quantity

• Group B: Medium-value goods, medium quantity

• Group C: Low-value goods, high quantity

The goal of the ABC system is to focus management

resources on the high-value items (Group A), ensure tight
control, optimize inventory, and minimize waste.
Three-Bin System
Description: This is a simple inventory control system, commonly used in Objective: To ensure that products are always available to meet demand without
manufacturing environments or retail stores. interruption when the first bin is depleted.

Bin 1: Current Product in Use Bin 2: Replenishment Reserve Bin 3: Warehouse Stock
This bin contains the product currently in use, Bin 2 contains the replenishment reserve product, Bin 3 contains the product stock held in the
ensuring it is always available to meet demand. ready to be used when Bin 1 is depleted. warehouse or supply department, to replace Bin 2
when needed.
Just-in-Time (JIT) System
Concept

The JIT system is an inventory management method based on actual

demand. Raw materials or products are only produced and supplied
when there is a specific order. This system helps eliminate excess
inventory storage, reduce storage costs, and improve cash flow.

Objectives

The objective of JIT is to ensure that raw materials or products only

arrive when they are needed, helping to minimize waste and optimize
the production process.
Outsourcing System
Concept Objectives
This system involves outsourcing inventory Reduce internal management costs and risks, while
management activities to a third party. focusing on core business activities.

1 2 3

Characteristics
Companies will use the services of a logistics service
provider to manage all or part of their inventory.
Computerized Inventory Control System
The computerized inventory control system is a modern tool that uses software and digital tools to monitor, manage, and control inventory in
real-time.

ERP: enter resource prise

Increased Accuracy and Efficiency
1 Improve inventory management quality WMS: warehouse management system
TMS: Transport Management System
OTM: Oder
Provide Accurate Reports
2
On inventory levels, consumption trends, and demand forecasting

Minimize Errors
3
From manual data entry, increase productivity

Automated System
4
Records inventory transactions
Fixed Order Quantity

— — —
Description Characteristics Objectives
This system involves placing a fixed The order quantity does not change, Ensure there is always enough
quantity of goods each time the but the timing of the order may vary inventory to meet demand, while
inventory level drops to a depending on demand and optimizing ordering and storage costs.
predetermined level. consumption rate. This system is often
applied to products with a stable
consumption rate.
Fixed Period Ordering
Concept

This system involves placing orders at fixed time intervals

(e.g., weekly, monthly) without regard to the current
inventory level. The order quantity will vary depending on
the actual demand and inventory level at the time of
ordering.

Objective

The objective is to ensure scheduled periodic ordering,

minimizing the risk of stockouts or excessive inventory.

This method is easy to manage and suitable for Safety Stock:

businesses with relatively stable demand. +Chia theo so lieu: FIXED ODER
+Chia theo ngay: FIXED
04. Warehouse Management
Warehouse management is a key task in logistics management, as it is
necessary to keep goods safe and operate the warehouse on a daily
basis.

To ensure on-time delivery, it is best for the warehouse to be located

near the distributor or dealer's location. Furthermore, the company's
growth depends on how goods or products are stored.
Functions and Roles of Warehouse Management
Storage and Preservation of Goods 1
Warehouse management ensures that goods are stored properly. This
includes using appropriate equipment to preserve products.
2 Handling of Goods
Handling of goods is optimized through the use of specialized
equipment such as forklifts, conveyor belts, and robotic movers.
Warehouse Space Management 3
Efficient use of warehouse space to increase storage capacity, while
ensuring easy accessibility of goods.
4 Inventory Control
Inventory control methods like FIFO, LIFO, and FEFO help maintain
optimal stock levels.
Order Processing 5
Rapid and accurate order processing, including picking, packing, and
shipping activities.
6 Warehouse Safety and Security
Ensuring the safety of goods and personnel through compliance with
safety protocols and installation of protective equipment.
Stages in Warehouse Management
Stages in Warehouse Management
Receiving
Check the received goods to ensure the quantity, quality, and information on the documents match the actual items. Prepare a receiving report and update the inventory information in the warehouse
management system.

Putaway
After the goods are received and inspected, they are moved to the appropriate storage locations within the warehouse. Use strategies like Random Storage or Fixed Location Storage to optimize space
utilization.

Inventory Control
Monitor the inventory levels, conduct periodic cycle counts, and resolve any discrepancies. Use tools like warehouse management software or barcode/RFID systems to track inventory in real-time.

Order Picking
Select the goods from the storage locations based on customer orders. Picking strategies include Discrete Picking, Batch Picking, Zone Picking, and Wave Picking.

Packing and Shipping

Pack the goods according to requirements, ensuring safe transportation. Apply labels and prepare necessary documents before delivery.

Return Management
Handle product returns, including inspecting the condition, processing paperwork, and updating inventory. Identify the reasons for returns and provide solutions like refunds, exchanges, or recycling.
Types of Warehouses

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Cty
outsourc
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kho ben
ngoai
Types of Warehouses
There are various types of warehouses, each with its own characteristics and pros and cons. Specifically:

• Public Warehouses: These are independently operated warehouses that provide storage services to multiple customers.
Companies often use public warehouses on a short-term basis.
• Private Warehouses: Owned and operated by large businesses to meet their own storage needs. This type of warehouse is
more cost-effective in the long run for companies with stable and large storage requirements.
• Contract Warehouses: Operated under an exclusive contract with a single customer. They provide a middle ground between
public and private warehouses, with customized services based on long-term agreements.
• Automated Warehouses: Utilize automation technology to minimize human intervention in storage and retrieval processes.
This increases efficiency, reduces errors, and lowers operating costs.
• Climate Controlled Warehouses: Specialized warehouses designed to store goods that require specific temperature and
humidity conditions, such as pharmaceuticals, perishable foods, and chemicals.
• Distribution Centers: Focus on efficiently receiving goods from multiple suppliers, quickly fulfilling customer orders, and
rapidly distributing products to various destinations. They play a crucial role in reducing delivery times and improving
service levels.
Warehouse Management Technology
Warehouse Management RFID and Barcode Technology Internet of Things (IoT)
System (WMS)
RFID and barcode technologies are IoT allows the use of smart sensors
WMS software plays a crucial role in useful tools for real-time tracking to monitor and manage
optimizing the efficiency of and management of goods. They environmental factors in the
warehouse operations, including help reduce errors in inventory warehouse, such as temperature,
managing inbound inventory, auditing and handling, thereby humidity, and energy consumption,
storage, order processing, and enhancing accuracy and ensuring optimal storage conditions
inventory tracking. Using a WMS transparency in warehouse for goods and energy savings.
helps minimize errors and improve management.
labor productivity.
05. Transportation and Delivery
First Mile

Producer/Origin Long-Distance Transportation

This is the starting point of the supply chain, with the Includes transportation by air, sea or road to move goods
production of goods. The key here is to ensure quality and from the place of production to a distribution center or
timely preparation of goods for transportation. directly to the border if crossing to another country.
Logistics here need to be carefully managed to maintain
the integrity of the goods and ensure they are moved
efficiently while minimizing costs.
Middle Mile
Customs/Border 1
Goods must go through customs, which is a complex
and time-consuming process. Accurate
documentation, proper tax payment, and 2 Port or Terminal Storage/Yard
compliance with import and export regulations are Goods arriving at the port or terminal may need
required. temporary storage or reloading. Effective
management is needed to minimize dwell time,
reduce costs, and avoid delays.
Domestic (B2B) Transportation 3
This includes transporting goods from the port or
terminal to a warehouse or directly to a business
customer. Route optimization and scheduling are
necessary to ensure timely delivery without
excessive transportation costs.
Warehouse, Contract Hub & Fulfillment - Warehouse, Contract Hub &
Fulfillment

Warehouse/Contract Hub Fulfillment

These facilities play a critical role in storing and sometimes final assembly or This is the crucial step where orders are prepared for delivery to the final
packaging of goods. An effective Warehouse Management System (WMS) helps customer. It includes order picking, packaging, labeling, and sorting. Speed
track inventory levels, manage storage space, and optimize picking and and accuracy in order fulfillment are crucial to achieve customer satisfaction
packing processes. and reduce return rates.
Last Mile Delivery

Route Optimization Manage Expectations Supporting Technology

Use smart delivery scheduling Continuously update customers on Deploy technology solutions like GPS
software to calculate the shortest expected delivery times and quickly tracking and mobile apps to monitor
delivery routes, reducing handle return requests. This helps and confirm the delivery process. This
transportation time and costs. This increase customer satisfaction and helps increase transparency and
helps increase delivery speed and reduce return rates. improve responsiveness in case of
improve customer experience. issues.
06. Product Packaging
In logistics management, packaging plays a crucial role in protecting
goods throughout the transportation and storage process. It helps
simplify the handling and storage of raw materials, while ensuring
compliance with customs and import/export regulations.

Additionally, product packaging has a significant impact on marketing

activities and brand building. Impressive packaging design not only
attracts customers but also contributes to improving the user
experience and enhancing consumer satisfaction.
Product Packaging
Packaging
1 Protect the product from damage

Packaging Selection
2
Suitable for each type of product

Labeling and Symbols

3
Provide important information

Conclusion: The selection and management of product packaging is an important step in logistics management strategy,
directly affecting the efficiency and competitiveness of the business.
Logistics Management
Strategies
The basic logistics management strategies originate from Marketing
strategies. The push principle conceptualizes the provision of goods to
the market without a specific demand for those goods. This means
that the action is initiated by the manufacturer. The push principle is
the traditional strategy to supply goods to the market (MTS - Make to
Stock).

The pull principle starts at the end. This means that the logistics
process is triggered when the end-user (the consumer) requests
specific goods and thus creates demand (MTO - Make to Order).
Push Strategy and Pull Strategy
Push Strategy Pull Strategy Combining Strategies
The focus is on accelerating The focus is on increasing brand These strategies can be combined
product consumption through awareness and attracting or used separately depending on
distribution channels to reach customer attention. The goal is to market conditions, product type,
consumers. The goal is to move increase customer conversion and business objectives.
products quickly by using rates through marketing efforts to
promotional programs and create demand for the product.
incentives to encourage retailers
and wholesalers.
Push and Make-To-Stock Strategy Mechanism Diagram
Pull and Make-To-Order Strategy Mechanism Diagram
Push Strategy and Pull Strategy
Comparing Push/MTS and Pull/MTO Strategies
Push and MTS Strategy Pull and MTO Strategy

- Production management: Mass production based on - Production management: Produce products based on
forecasted market demand. specific customer orders.

- Marketing: Use advertising campaigns and promotions to - Marketing: Gather customer information and customize
drive consumption of the produced products. products to requirements.

- Logistics management: Manage large inventory levels, - Logistics management: Ensure a flexible logistics system
store and transport products to retail outlets. to deliver products immediately after production.
Push Strategy and Pull Strategy
2.2. Logistics Management Objectives and
Perspectives
1. Inventory Optimization: Effectively manage inventory levels to reduce storage costs and ensure availability of
goods when needed.
2. Cost Efficiency: Optimize costs across the entire supply chain to increase profitability.
3. Timely Delivery: Ensure goods are delivered to customers on time.
4. Risk Management: Identify and mitigate risks within the supply chain.
5. Technology Integration: Utilize technology to improve the efficiency and accuracy of the supply chain.
6. Sustainability: Ensure the supply chain is environmentally friendly and sustainable in the long term.
7. Scalability: Ensure the supply chain can scale up as demand increases.
8. Customer Satisfaction: Ensure customers are satisfied with the products and services.
9. Compliance & Regulation: Ensure compliance with international regulations and standards.
10. Competitive Advantage: Create and maintain a competitive advantage through effective logistics management.
2.2.1. Inventory Optimization
The key strategies to optimize inventory in logistics management:

• Demand Forecasting: Accurately predict product demand.

• Safety Stock: Maintain a buffer inventory to cope with fluctuations.

• ABC Analysis: Prioritize items based on importance.

• Just-In-Time (JIT) Inventory: Reduce excess inventory through timely delivery.

• Inventory Tracking System: Monitor inventory levels in real-time.

• Supplier Collaboration: Effectively communicate with suppliers.
2.2.2. Cost Efficiency
The main strategies to save costs are:

1. Route Optimization: Choose the most cost-effective transportation routes to help minimize transportation costs.
2. Consolidation: Combine multiple shipments to optimize load capacity and reduce transportation costs per unit.
3. Inventory Management: Apply lean inventory management practices like Just-In-Time to minimize transportation and storage
costs.
4. Supplier Negotiation: Negotiate favorable terms and conditions with suppliers and carriers to reduce logistics costs.
5. Automation: Implement automation technology in logistics operations in a well-organized manner to optimize operating costs.
2.2.3. Timely Delivery
Effective Route Planning 1
Optimize delivery routes to minimize transportation time by using
GPS technology and data analysis.
2 Real-Time Tracking
Monitor delivery information such as location, order status, and
estimated delivery time to ensure timely delivery.
Inventory Management 3
Maintain optimal inventory levels to avoid stockouts through
accurate demand forecasting and lean inventory management
methods. 4 Just-In-Time (JIT)
Apply Just-In-Time principles to efficiently distribute goods and
meet customer demand in a timely manner.
Effective Communication 5
Enhance collaboration and information sharing among supply
chain partners to achieve fast and on-time delivery.
6 Contingency Planning
Develop contingency plans to respond to unexpected situations
and ensure continuous delivery.
2.2.4. Risk Management
• Risk Assessment: Identify and analyze potential incidents and
risks in the supply chain to have timely response measures.

• Supplier Diversification: Use multiple different suppliers to

minimize dependence on a single supplier and avoid supply
chain disruptions.

• Transportation Contingency: Plan for alternative

transportation options, such as using multiple carriers, to
address unexpected situations.

• Insurance: Obtain comprehensive insurance policies to

mitigate the impact of risks such as natural disasters,
transportation accidents, product damage, etc.

• Employee Training: Train employees on risk management

processes to enhance their prevention and response
capabilities.
2.2.5. Technology Integration
Key strategies for integrating technology:

1. Deploy GPS and Telecommunications to track the status and

location of goods in real-time.

2. Use Inventory Management Software to effectively monitor

inventory levels.

3. Integrate Warehouse Automation to organize and operate the

warehouse efficiently.

4. Leverage Supply Chain Data Analytics to make informed

decisions.

5. IoT Devices to monitor and optimize supply chain processes.

6. Utilize AI and ML to analyze, predict and forecast demand.
2.2.6. Sustainability
Sustainability helps minimize the environmental and social impact of the supply chain, while creating long-term value for
the business.

The key strategies to apply sustainability in logistics management:

• Green transportation: Use environmentally friendly vehicles such as electric, hybrid or clean fuel vehicles.
• Energy-efficient warehouses: Implement energy-saving technologies such as LED lighting systems, effective
insulation, and solar power equipment.

• Sustainable packaging: Choose recyclable and biodegradable packaging materials like paper and other eco-
friendly alternatives instead of plastic.

• Reduce carbon emissions: Set targets to reduce carbon emissions across the entire supply chain, from
transportation to warehouse operations.

• Renewable energy: Integrate solar, wind or other clean energy sources to power logistics infrastructure.
Logistics Scaling Strategies
• Flexible infrastructure: Construct warehouses and transportation networks that can adapt to changing and growing
demands.

• Supplier partnerships: Collaborate closely with capable logistics service providers to scale production and supply.
• Resource planning: Use accurate demand forecasting to efficiently allocate resources like personnel, equipment,
and capital.

• Cross-training: Train versatile employees who can fulfill various tasks and roles as needed.
2.2.7. Scalability
Scalability helps businesses adapt to changes in the market and
customer demands.

Key strategies for scalability include:

• Flexible infrastructure: Building warehouses and

transportation networks that can adapt to changing and

• increasing demands.
Partnerships with suppliers: Closely collaborating with capable
logistics service providers to scale production and supply.

• Resource planning: Using accurate demand forecasting to

efficiently allocate resources like personnel, equipment, and
capital.

• Cross-training: Training versatile employees who can take on

different tasks and roles as needed.
2.2.8. Customer Satisfaction
Customer satisfaction helps businesses maintain good relationships with
customers, increase loyalty, and drive revenue.

The key strategies to realize customer satisfaction include:

1. Fulfill orders accurately: Ensure the right quantity and products

are delivered to customers.
2. Communicate transparently: Provide updated information on
order status and delivery timeline.
3. Manage returns effectively: Quickly and easily process customer
return requests.
4. Ensure product quality: Protect and deliver products to
customers in good condition.
5. Proactively resolve issues: Quickly address customer requests
and complaints.
2.2.9. Compliance & Regulation
Compliance and regulation ensure logistics activities adhere to international and local regulations, while maintaining the company's reputation
and responsibility.

The key strategies to meet compliance and regulation include:

• Document Accuracy: Ensure all shipping documents are accurate and complete.
• Audit Procedures: Conduct regular audits and check for compliance.
• Training Program: Train employees on compliance best practices.
• Record Keeping: Maintain comprehensive records for audit purposes.
• Continuous Updates: Stay up-to-date on international and local regulations.
2.2.10. Competitive Advantage
Competitive advantage helps a business stand out in the competitive
market and attract customers.

The main strategies to gain a competitive advantage include:

Continuous Improvement: Regularly evaluate and enhance logistics
processes, keeping the system flexible and efficient.

1. Sustainable Initiatives: Implement eco-friendly practices such

as optimizing transportation routes and recycling packaging to
gain market advantage.
2. Customer-Centric: Prioritize customer satisfaction through
timely delivery and transparent communication, creating a
great customer experience.
3. Data Analysis: Leverage detailed data insights to make
informed decisions and improve logistics efficiency.
2.3. Basic Logistics Operations
Process
The basic logistics operations process is a series of closely linked
activities aimed at optimizing the movement of goods from the source
of supply to the final point of consumption.

This process includes steps such as order intake, order processing,

goods inspection, packaging, transportation, delivery, inventory
management, returns handling, and customer service.
2.3.1. Classification of Logistics
Processes
The basic operating processes of logistics can be classified into three
main types: basic processes, standard processes, and competitive
processes.

• Basic processes: processes that are not necessarily recognized as

essential for the business but are still prerequisites.

• Standard processes: processes that are considered important to

customers and must at least meet acceptable standards to begin
competing reasonably in a particular market.

• Competitive processes: processes that have a direct impact on

competitiveness. Performing these processes well will provide a
competitive advantage and ensure that the company operates
actively and successfully through its logistics activities.
2.3.2. Evaluation and
Development of Logistics
Processes
Evaluating what is needed in these three areas and then determining
what is still missing will help identify the processes that need to be
developed further. These are the processes that need to be
implemented to ensure that the company will achieve or maintain a
suitable competitive position.

No company can easily develop a process that can address every

unexpected situation that may arise. Therefore, it would be very useful
to understand some of the main methods to distinguish between the
different factors that underlie most logistics activities.
2.3.3. Other Differentiating
Factors in the Logistics
Process
The differentiating factors in the logistics process can be classified
according to various criteria, including market segment, customer
type, product group, customer service requirements, order type, and
channel type.

For example, the market segment can be divided by industry, such as

engineering, automotive, chemicals, etc. The types of customers may
differ, such as between industrial and consumer, or international,
national, and local.
2.3.4. Logistics Process
Design
Designing the logistics process is an important process to optimize
logistics operations, ensuring high efficiency and effectiveness.

This process includes steps to identify the key processes, diagram the
key elements, map the detailed flow, identify opportunities for
improvement, measure the opportunities and identify the key points,
and determine feasible solutions and implementation costs.
2.3.4. Designing the Logistics
Process (Continued)
Designing the logistics process is an ongoing process that requires
flexibility and the ability to adapt to changes in the market and
customer needs. Updating and optimizing the logistics process is
necessary to maintain high efficiency and effectiveness.

Additionally, the design of the logistics process must consider factors

such as cost, time, quality, safety, and the environment. The goal is to
create an efficient, cost-effective logistics process that meets
customer needs.
Temperature-Controlled Freight Transportation
Temperature-Controlled Freight Transportation

Temperature-Controlled Freight Transportation Goods Storage

Temperature-controlled freight transportation is an important part Goods are stored in cold warehouses or refrigerated trucks to
of logistics management. This type of transportation ensures that maintain the appropriate temperature. This helps ensure the
temperature-sensitive goods are stored in appropriate conditions quality and freshness of the goods, especially for food,
throughout the transportation process. pharmaceuticals, and other perishable products.
2.4. Organization and Management of Logistics
Logistics organization usually includes structural components and process components.
2.4.1. Organizational Structure of a Logistics Company
Administrative Process
Includes tasks such as planning, organizing, processing, and controlling. Ensures logistics activities are carried
out efficiently and in an organized manner.

Operations Process
Focuses on value-adding activities, such as transportation, warehousing, and order processing. The goal is to
maximize profitability from these activities.

Effective Integration
The close coordination between administrative and operational processes is key to achieving optimal logistics
performance.
2.4.2. The Relationship Between
Logistics and Other Departments in
an Organization
The relationship between logistics and other departments in an organization can
be classified based on function, based on process, or based on objectives.

• Based on function, logistics can be seen as a supporting department for

other departments, such as production, marketing, sales, etc.
• Based on process, logistics can be seen as part of the supply chain,
connecting with other departments to create value for customers.
• Based on objectives, logistics can be seen as an independent department,
with its own specific objectives, but still needing to coordinate with other
departments to achieve the organization's overall goals.
2.4.2. Relationship between logistics and departments
within an organization
Based on function
2.4.2. Relationship between logistics and departments
within an organization
Based on the organizational structure of departments
2.4.2. Relationship between logistics and departments within an
organization
Based on the matrix structure of the organization
2.4.3. Responsibilities of the Logistics Manager
The duties of a logistics manager vary depending on the company, scale, and their needs. However, in general, logistics
managers perform many similar core functions within a business.

• Manage inventory levels, delivery times, and delivery costs.

• Utilize logistics software and IT systems to streamline operations.

• Coordinate and control the order fulfillment cycle and ensure they are in the right place at the right time.
• Evaluate the quality of previous deliveries and assess how they can be improved.

• Manage resources within the supply chain, evaluate their efficiency, and provide solutions if needed.
• Negotiate with suppliers, retailers, manufacturers, and consumers.
• Supervise, manage, and train the team members.
Chapter 2 Summary
Chapter 2 provided a basic foundation on Logistics System Management.
The content includes the concept, model, objectives, and operating process of Logistics.

Understand the role of Logistics in business operations.

Grasp the basic concepts, including: Supply Chain, Inventory Management, Transportation, and Packaging.

Connect Logistics concepts to real-world operations.

Analyze the relationship between departments in an organization, and the responsibilities of Logistics
managers.