STUDENTS' CORNER - 110

Let us learn some more details about inbound logistics.

What we should keep in mind is business aims at profit through effective cost cutting in all its business-related activities.  And logistics cost remains a major concern with the company.

As for inbound logistics, as we saw earlier, it is goods moving into business, into the company. Materials may come from some company location; that is, they may be sent by another integral part of the company from some local position; or, materials may come from some external sources. Either way, movements of goods cost and logistics management must so plan and execute that the cost involved in the movements of the goods is minimal and necessary. Once the goods are received, the question of storage begins with warehousing and all warehousing activities must also be so monitored that the warehousing cost for the company is also minimal.

This is what is generally known as inbound freight management which is also a vast subject.

Inbound logistics performs three major functions: production scheduling, procurement and dealing with returned products.

Scheduling refers to careful plan of the sequences of action in time frame keeping in consideration the other related future tasks. In other words, unitizing the task and allotting time for each unit. And production is getting a product built out of raw materials to suit the demand of the market.

Production scheduling also involves allocation of adequate resources for production to completion so that market demand is met fully. The focus of the scheduling is to effect a balance between resources required for production and the timely fulfillment of the needs of the customers. Lapse or fault either in availability of resources or in meeting the needs of the customers in time will adversely affect the business. It all boils down to one major fact: every activity involved in production scheduling must be uncompromisingly cost-effective.

Cost effectiveness includes two major concerns: minimizing the production time and costs. The two objectives directly have a bearing upon the bottom line which after all is the life line of any concern.

Sometime the entire schedule goes bang; that is, the logistics personnel may have to tackle random dates, random weights and random due dates and even random processing times. Dealing with such a situation is called stochastic scheduling.

In our next session, we shall deal with procurement as the second function of inbound logistics.