Describe the logistical components of the supply chain. The logistics supply chain consists of several interrelated and integrated logistical components:
(1) sourcing and procurement of raw materials and supplies,
(2) production scheduling,
(3) order processing,
(4) inventory control,
(5) warehousing and materials-handling, and
(6) transportation.
The logistics information system is the link connecting all of the logistics components of the supply chain. Information technology connects the various components and partners of the supply chain into an integrated whole. The supply chain team, in concert with the logistics information system, orchestrates the movement of goods, services, and information from the source to the consumer. Supply chain teams typically cut across organizational boundaries, embracing all parties who participate in moving product to market.
Procurement deals with the purchase of raw materials, supplies, and components according to production scheduling. Order processing monitors the flow of goods and information (order entry and order handling). Inventory control systems regulate when and how much to buy (order timing and order quantity). Warehousing provides storage of goods until needed by the customer while the materials-handling system moves inventory into, within, and out of the warehouse. Finally, the major modes of transportation are railroads, motor carriers, pipelines, waterways, and airways.
1. Assume that you are the supply chain manager for a producer of expensive, high-tech computer components. Identify the most suitable method(s) of transporting your product in terms of cost, transit time, reliability, capability, accessibility, and traceability. Now, assume you are the supply chain manager for a producer of milk. How does this change your choice of transportation?