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• Module overview
• 1. Introduction to logistics
  • 1.1. The logistics concept
    • 1.1.1 A question of definition
    • 1.1.2 Technological context
  • 1.2. Evolution of modern business logistics
    • 1.2.1 Materials management or supply-side logistics
    • 1.2.2 Physical distribution or demand-side logistics
    • 1.2.3 The total logistics concept
  • 1.3 Logistics, the critical interfaces

• 2. Supply side logistics: Procurement and materials management

  • 2.1 Materials management
    • 2.1.1 Purchasing and procurement
    • 2.1.2 Production control
    • 2.1.3 Warehousing and storage
    • 2.1.4 Data and information systems
  • 2.2 Quality in logistics
    • 2.2.1 Total quality management
    • 2.2.2 Benchmarking
  • 2.3 Kanban
  • 2.4 Measurement and evaluation
  • 2.5 MRP 1 and 2

• 3. Demand side logistics: Forecasting and order processing

  • 3.1 Customer order processing
  • 3.2 Environmental scanning
    • 3.2.1 The environments
    • 3.2.2 Approaches to scanning
  • 3.3 Logistics needs forecasting
  • 3.4 Lead time components
  • 3.5 Enhancing forewarning of demand

• 4. Inventory management and control

  • 4.1 Basic concepts and rationale for inventory holding
  • 4.2 Inventory costs
    • 4.2.1 Managing inventory costs
    • 4.2.2 Push and pull control methods
  • 4.3 Types of inventory
  • 4.4 Inventory management
    • 4.4.1 Inventory management systems
    • 4.4.2 Computers and inventory management
  • 4.5 Inventory management and business success

• 5. Storage facilities, materials handling equipment and packaging

  • 5.1 The management of warehouses and distribution centres
    • 5.1.1 Storage alternatives
    • 5.1.2 Warehouse design
    • 5.1.3 Productivity associated with warehousing
    • 5.1.4 Warehouse information systems
  • 5.2 Materials handling
    • 5.2.1 Objectives of material handling
    • 5.2.2 Materials handling systems and equipment
    • 5.2.3 Materials handling productivity ratios
  • 5.3 Packaging
    • 5.3.1 The role of packaging
    • 5.3.2 Packaging materials
    • 5.3.3 Packaging design considerations

• 6. Physical distribution transportation system

  • 6.1 The role of transportation in logistics
  • 6.2 Economic and service characteristics of the modes of transport
    • 6.2.1 Rail
    • 6.2.2 Road
    • 6.2.3 Air
    • 6.2.4 Water
    • 6.2.5 Pipeline
  • 6.3 Intermodal transport services
  • 6.4 Transportation cost structures
  • 6.5 Transportation rate profiles
  • 6.6 Modal and carrier selection
  • 6.7 Management of the transport function

• 7. Change and transformation

  • 7.1 Nature of change
    • 7.1.1 The manager's role and change
    • 7.1.2 Transformation and change continuums
    • 7.1.3 Responding late in the change continuum
    • 7.1.4 Rapid change continuum cycles
    • 7.1.5 Increasing organisational responsiveness and agility
  • 7.2 Scale and pace of change
    • 7.2.1 Leading rapid change
  • 7.3 Stages of change
    • 7.3.1 The stages of change and approaches to management
    • 7.3.2 Change and the organisation's development stage
  • 7.4 Communicating change
    • 7.4.1 Guidelines for communicating change
    • 7.4.2 Communicating change to stakeholders

• 8. Building agility and responsiveness

  • 8.1 Organisational agility and the art of rapid change
  • 8.2 Agility and transformational leadership
    • 8.2.1 Transactional Leadership
    • 8.2.2 Transformational Leadership
  • 8.3 Agility and organisational responsiveness
    • 8.3.1 Principles for Constructive Change
    • 8.3.2 Agility and environmental attunement
  • 8.4 Organisational learning and enhanced agility
    • 8.4.1 Learning and organisational life cycles
    • 8.4.2 Double loop learning and the learning organisation
    • 8.4.3 The learning cycle
    • 8.4.4 Leading learning from being adaptive to generative

• 9. Foster innovation and creativity

  • 9.1 Innovation and agility
  • 9.2 Levels of innovation and their impact
    • 9.2.1 Innovation
    • 9.2.2 Improvement
    • 9.2.3 Re-engineering
    • 9.2.4 Reinventing
    • 9.2.5 Re-engineering
  • 9.3 Re-engineering and business process re-engineering
    • 9.3.1 Reengineering and quality improvement
    • 9.3.2 Identifying when to re-engineer processes
    • 9.3.3 To innovate slowly or reengineer?
  • 9.4 The need for speed
  • 9.5 Organise work to facilitate innovative practices and organisational agility
    • 9.5.1 Innovative and agile organisation
  • 9.6 Enhancing diversity and creativity of thinking in teams and work practices
    • 9.6.1 Convergent and divergent thinking
    • 9.6.2 Left- and right- brain activities
    • 9.6.3 How to generate new ideas?
  • 9.7 Creativity and solutions search in teams
    • 9.7.1 Brainstorming
    • 9.7.2 Synectics
    • 9.7.3 Forcing Techniques
    • 9.7.4 Nominal Technique
  • 9.8 Review the use of innovation in work and team practices.
    • 9.8.1 Assess the ability of the team to achieve goals
    • 9.8.2 Review the success of team leadership

3.2.1 The environments

The various environments, and their influences on operations, that the logistics manager should be aware of include:

• the global, or macro, environment
• the competitive, or market, environment
• the firm, or micro, environment.

The global environment. The global environment is the one that sets the tone for the wider operations of the industry. In recent times, the events of September 11, 2001 have had a major impact on the global economy. This influences the commercial activities of various organisations. Associated with that has been the military and other activity in different parts of the world, with knock-on effects on local enterprises.

Activity 3.1

In the space below, list factors that can impact on the global commercial environment.

In Reading 3.1, you will read about the importance of environmental scanning for organisational success of small manufacturing businesses. The same philosophy applies in other contexts.

Reading 3.1

Beal, R (January 2000), 'Competing effectively: Environmental scanning, competitive strategy, and organisational performance in small manufacturing firms', Journal of Small Business Management , pp. 27 - 47.

In Australia , Ansett Airlines went bankrupt in October 2001. Coupled with the effect of September 11 events, this had a major impact on different industries. In Tasmania , tourism and seafood production suffered particularly seriously. The double uncertainty of safety and lack of air service kept many overseas holidaymakers away. The impact on the hospitality and supporting logistics providers was severe. Many firms, such as those that provided services and products to the airline as well as downstream industries, ceased operations and/or went bankrupt. Others laid off staff in large numbers and lost vast amounts of corporate knowledge.

In other parts of the world, insurance premiums on cargoes to certain parts of the world have been raised in response to perceived security of operations. In addition, oil and commodity prices have varied in response to market sentiments. All these and similar factors have a major influence on the competitive environment within which firms operate.

The next reading emphasises the role of environmental scanning again, this time in the context of the health care industry.

Reading 3.2

Kumar, K, Subramanian, R and Strandholm, K (2001), 'Competitive strategy, environmental scanning and performance: A context specific analysis of their relationship', IJCM, vol 11, no 1, pp. 1 - 33.

The competitive environment. The competitive environment responds to the global environment as well as to events occurring within the industry. The container shipping industry, for example, is seeing the advent of ever larger ships in increasing numbers. The supply of such ships has far exceeded demand and has seriously impacted on rates. For the users of this industry, the situation is to their advantage because rates are very low. For the industry itself, the situation is unfavourable because earnings are not sufficient to allow reasonable profits and sound reinvestment in maintaining the service. Some of the minor firms are going bankrupt. At the other end of the spectrum, large firms are heading towards collaboration in a bid to reduce costs and stay in business. The situation that results is a trend towards an oligopoly, which is not in the long term interests of the users.

In a general environment of high costs and uncertain global market conditions, it is fair to say that most companies are looking to reduce their costs as much as possible. There are two trends that emerge from this - specialisation and out-sourcing of operations . There are inherent risks and strengths in each. On the one hand, firms carry out activities that they are good at and outsource others to experts. This brings costs under some control. On the other hand, specialisation reduces the market that a firm attracts and reduces the customer base.

Activity 3.2

In the space below, list the key factors that can impact on a supermarket as a result of increased specialisation in all its suppliers.

I hope you considered the effects of specialisation in the various sectors for this activity, for example, farming, food processing, cosmetics, children's products, and so forth, including transport.

The nature of the company. The final environment is the firm itself. The logistics manager must be aware of its abilities and constraints. These are crucial for planning and executing the numerous functions and processes that a firm carries out.

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