Logistics

Management
Course Content
This course will provide students with basic knowledge and skills in Logistics management. The main content includes:

1. Basic concepts of Logistics

2. Fundamentals of Logistics system management

3. Logistics cost and efficiency management

4. Procurement management

5. Transportation and freight management

6. Warehouse management and cargo handling

7. Inventory and supply management

8. Trends in technology application in logistics management

Chapter 1. Basic
Concepts of
Logistics
1.1. Concept of Logistics

"What role does logistics play and at what stage in the supply chain?"
1.1. Concept of Logistics

Logistics plays a crucial role in the supply chain, ensuring smooth operation from raw materials to the final product. In the supply chain, logistics is present in
the stages from raw materials to the final product, including the distribution process to the customer.
 Customer
tier 2

Supplier …
Customer
tier 1 Customer
tier 1
tier 2
Supplier
tier 2 Customer
tier 3
Supplier Central Customer Customer
tier 1
… Supplier company tier 1 tier 2
…
tier 2

Customer Customer
Customer tier 2 tier 3
Supplier Supplier tier 1
tier 2 tier 1
…
Customer
tier 2
Customer
tier 1
Services Services
provider provider Services
provider
1.1. Concept of Logistics
Definition Objectives Scope
Logistics is the process of managing and The main objective of logistics is to ensure Logistics includes various activities such as
optimizing the processes related to the the right product, the right quantity, the right transportation, warehousing, packaging,
movement and storage of goods, services, or condition, at the right place, at the right time order processing, inventory management,
information from the point of origin to the and at the most reasonable cost for right and customer service.
final destination. customer.
Stages of Logistics Service Development
Stage 1: Physical Distribution (1960s - 1
1970s)
In this stage, logistics services focused on the
movement and distribution of goods efficiently, 2 Stage 2: Logistics Systems (1980s -
aiming to meet customer demand. 1990s)
This stage witnessed the development of logistics
systems with the integration of activities such as
Stage 3: Supply Chain Management 3 transportation, warehousing, inventory
(21st Century) management, and order processing.
In the new era, logistics has become a critical part
of supply chain management, connecting all the
stages from suppliers to end customers.
Phase 1: Distribution

Transportation
1
Timely and efficient transportation of goods

Distribution
2
Optimized distribution of products and goods to customers

Warehousing
3
Safe and efficient storage and preservation of goods

Packaging
4
Attractive packaging and labeling to protect goods

In the Distribution phase, the related activities such as transportation, distribution, storage, and packaging are closely coordinated to ensure the
effective and timely delivery of products and goods to customers. The purpose is to meet customer needs in the most optimal way.
Activities in Phase 1
The first phase of the logistics service focuses on physical distribution, moving products efficiently from the
manufacturer to the customer's hands. This is a period when businesses recognize that optimizing distribution is a
competitive advantage.

• Transportation: Optimize transportation modes such as road, rail, and sea to ensure goods are delivered on time
at the lowest cost.

• Storage: Manage warehouses to maintain a continuous flow of goods, reduce waiting time, and increase
efficiency.

• Inventory management: Includes activities such as receiving, inspecting, storing, packaging, and distributing
goods.

Although more scientifically organized, the logistics processes in this phase still operate in silos between different
departments.
Phase 2: Logistics System

In this phase, logistics activities such as inventory management, transportation, and order processing are integrated into a complete
logistics system. This helps optimize operations, meet customer needs in a timely and efficient manner.
Activities in Phase 2
Phase 2 marks the transition from simple distribution to an integrated logistics system. This system combines various activities to optimize the supply chain.

Warehouse Management
1 Storage, handling, and control of goods.

Transportation
2
Moving goods from origin to destination.

Inventory Management
3
Tracking, forecasting, and adjusting inventory levels.

Order Processing
4
Receiving, processing, and delivering orders to customers.

Information
5
Collecting, processing, and sharing logistics information.

These activities are connected through an information system, allowing businesses to effectively control the entire logistics process.
Stage 3: Supply Chain Management (21st
Century)

Comprehensive Supply Chain Technology & Data Global Connectivity

Connectivity Optimization
ERP, WMS, TMS, Big Data, Logistics must meet the
Logistics has become an The goal is to create a AI, and IoT play a crucial need for global
indispensable part of flexible, efficient, and role in optimizing logistics connectivity, with the
supply chain management, responsive supply chain operations and the supply movement of goods
connecting all stages from that can quickly adapt to chain. across multiple countries
suppliers to the final market changes. and regions.
customers.
Activities in Phase 3
Phase 3 is the phase of supply chain management. This is the highest stage of logistics development. In this phase,
companies not only focus on managing logistics activities within the company, but also expand the scope of
management to the entire supply chain. This means that the company needs to coordinate and manage the activities of
all partners in the supply chain, including suppliers, manufacturers, distributors, and the final customers.

The main activities in Phase 3 include:

• Planning and managing the supply chain

• Controlling and optimizing the flow of goods

• Managing partner relationships in the supply chain
• Building a supply chain management information system
• Implementing sustainable logistics activities
The Importance of Logistics in Business
Trends in the Development of
the Logistics Service System
Green Logistics and Sustainable Development
Focusing on minimizing environmental impact through the use of electric
vehicles, route optimization, and waste reduction.

Urban Logistics
Developing efficient transportation and distribution solutions in dense urban
environments, utilizing small distribution centers and flexible delivery vehicles.

Digitalization in Logistics
Digitalization helps automate processes, enhance transparency, improve
tracking and data analysis, enabling businesses to optimize operational
efficiency and reduce costs.
1.2. Logistics Service System
The logistics service system has various different system components. The core logistics services such as order
processing, storage, and transportation are directly supported by logistics information services and additional services
necessary for the logistics process.
Components in the Logistics Service System
Components of the Logistics Service System
Information Services 1
Includes information and communication
technology systems that support supply chain
management, cargo tracking, and optimization of 2 Logistical Core Services
logistics processes. Services such as order processing, storage, and
cargo transportation, which are fundamental and
essential activities in the logistics chain.
Additional Services 3
Includes supporting services such as packaging,
delivery, insurance, customs, etc. to complete and
optimize the provision of logistics services.
Logistical Core
Services
Logistical core services such as order processing, storage, and
goods transportation are fundamental and essential activities within
the supply chain. These services provide the foundation for an
efficient logistics system to operate.
Order Processing

1 Order Data Management 2 Payment Process

Process and track order information from receipt Includes invoicing, payment collection, and
to delivery completion, ensuring accuracy and effective management of payment transactions.
transparency.

3 Shipment Tracking 4 Feedback Information Processing

Monitor the transportation and delivery process to Receive and process customer feedback, which
ensure goods reach customers on time. serves as a basis for improving service quality.
Storage
Warehouse Management
When goods are produced or imported, they need to be stored in warehouses before being distributed to customers. The Warehouse Management System (WMS) plays a crucial
role in organizing, arranging, and preserving the goods.

Space Optimization
Modern storage systems not only help save space, but also optimize the time for searching and processing goods.

Classification and Arrangement

Goods are classified and arranged according to criteria such as product type, storage time, and priority level.

Supporting Technologies
In some cases, technologies such as robots and Automated Storage/Retrieval Systems (AS/RS) are applied to enhance efficiency.

Risk Minimization
Effective storage management ensures that goods are always ready when needed and minimizes the risk of shortages or damage.
Warehouse Operations Process
Warehouse Operations Process
Receiving 1
Receive and inspect incoming goods to ensure accurate quality
and quantity.
2 Put away
Classify and arrange goods in optimal storage locations based
on their characteristics and usage frequency.
Picking 3
Search for and retrieve the correct items according to order
requirements, ensuring accuracy and efficiency.
4 Packing
Pack goods safely, attractively, and appropriately for each
product type.
Inventory 5
Monitor and update inventory status to forecast demand and
adjust replenishment plans in a timely manner.
6 Kitting
Assemble related products into complete product kits to meet
special customer requirements.
Transshipment Hubs in Logistics Services

Multiple Application Areas Efficient Distribution Storage and Management

Transshipment hubs are widely used Transshipment hubs support the Transshipment hubs help store and
in industries such as retail, distribution of goods to retail stores systematically manage inventory,
manufacturing, food, or direct delivery to customers, meeting the standards and storage
pharmaceuticals, etc. They meet the ensuring timeliness and flexibility. requirements of different types of
need for fast and efficient movement goods.
of goods.
Goods Transportation
Transportation Methods Transportation Management
There are various transportation methods, including Transportation Management Systems (TMS) help
road, rail, sea, and air. The choice of method depends track routes, optimize routes, and ensure on-time
on the distance, delivery time, and type of goods. delivery at reasonable costs.

Supporting Technologies Coordination

Technologies help track and monitor transportation in Transportation requires close coordination between
real-time, minimizing the risk of lost or damaged the manufacturer, transportation service providers,
goods during transit. and customers.
Logistics
Information
Services
Logistics information services create and utilize
data about goods transported within the system.
This data includes important information such as
the shipper, receiver, type of goods, order number,
quantity, weight, and volume.

Logistics information is the key to planning,

tracking, and monitoring the provision of actual
logistics services. Logistics operations based on
data are closely related to core services such as
transportation, warehousing, and order processing.
Benefits of Implementing a Logistics Information
System

• Reduced Operational Costs

• Visibility and Tracking
• Smart Automation
• Efficient Delivery Orchestration
• Improved Delivery Tracking & Management
• Improve Customer Experience
• Lack of NDR Standardization
4-Level Model of a Logistics Information System
4-Level Model of a Logistics Information
System
The logistics information system consists of 4 main levels: Operating Level, Tactical Level, Strategic Level, and Control Level.
Each level plays an important role in managing and operating logistics activities effectively.

Operating Level includes activities such as order registration, order processing, inventory planning, warehousing and distribution,
transportation and delivery. These are the daily tasks that need to be performed to maintain a seamless and timely logistics
operation.

Tactical Level involves issues such as inventory management, facility planning, channel integration, vehicle routing and
scheduling, as well as outsourcing services. These tasks help optimize operational efficiency in the short and medium term.

Strategic Level includes capacity and capability planning, alliances and collaborations, as well as system customization to meet
long-term business objectives.

Control Level focuses on monitoring and evaluating the performance of the system, including customer service, system
productivity, cost control, and effective asset utilization.
Workflow of the Logistics Management System
Logistics Management System Workflow

Order Placement 1
Customers place orders, generating information about
products, quantities, and delivery times.
2 Planning
The logistics management system plans the order
processing, including scheduling transportation, arranging
Execution 3 goods, and allocating resources.
Activities such as receiving goods, inspecting, warehousing,
packaging, and transportation are carried out to fulfill the
order. 4 Monitoring
The system tracks the order processing, updates the status,
and provides information to the customers.
Evaluation 5
Based on KPIs such as delivery time, cost, and customer
satisfaction, the system's effectiveness is evaluated.
Additional Services in Logistics

Information Services Advertising Services Flexibility

Additional information services Additional services such as Additional services can be
such as data analysis and reporting promotions and advertising can be provided at different locations, not
can be integrated into the core provided at various points along just at the point of delivery, but
logistics process, providing the supply chain, optimizing the also at the contractor's or third-
valuable information for marketing effectiveness of customer reach. party's premises, increasing
purposes. flexibility and efficiency in the
transportation process.
1.3. Classification of
Logistics Activities
Logistics is an important field in supply chain management. There
are many ways to classify logistics activities, including by form,
process, and commodity.
Logistics Activity Classification by Service Level
First Party Logistics (1PL)
Self-organization Dedicated Resources Direct Management
The business owner organizes and carries out logistics Use the company's own vehicles, warehouses, Directly manage and operate the entire logistics process.
activities. information systems, and workforce.
Advantages and Disadvantages of the 1PL Model

Advantages
• High Proactivity: The owner of the goods can independently provide Logistics at any time.

• Tight Control: The company has tight control over the transportation process and service quality.

• Long-term Cost Reduction: For large companies, investing in Logistics infrastructure can reduce long-term costs compared to outsourcing.

Disadvantages
• High Initial Investment: Investing in infrastructure, transportation, and human resources requires a large initial investment.

• Management and Operation Capability: For companies without sufficient scale, experience, expertise, and quality of personnel, the 1PL model can
pose many difficulties, reduce efficiency, increase risks, and be quite costly.

• Limited Scope: Small companies have a limited transportation scope and cannot expand to a large or international scale like other Logistics models.

Who is it suitable for?

The 1PL model is more suitable for large companies with large transportation needs and strong financial capabilities, as they can invest in infrastructure
and manage logistics effectively. However, this model is not optimal for small businesses, due to the high initial investment and limited transportation
scope, making it difficult for them to expand or compete with external logistics services.
Second Party Logistics (2PL)
1 Provision of Individual Services 2 Not Integrated 3 Flexible
The second party provides individual logistics services The services provided are not yet integrated as a Businesses can choose the necessary services from
such as transportation, warehousing, customs system. various different providers.
procedures, etc.
Advantages and Disadvantages of the 2PL Model

Advantages Disadvantages
• Reduced initial investment: Businesses do not need to invest in • Dependence on the provider: Loss of control and risk of service
logistics infrastructure and transportation equipment. quality issues.
• Access to professional services: 2PL providers have experience • High service costs: Outsourcing costs can increase, especially
and ensure quality transportation. for large shipping volumes.
• Optimized transportation process: Providers have a wide • Limited scalability: Not suitable for large-scale or international
network, helping to reduce costs and optimize routes. logistics expansion needs.
• High flexibility: Businesses can choose different service • Lack of supply chain integration: Only addresses transportation,
providers for various transportation needs. other processes still need to be self-managed.

Who is it suitable for?

The 2PL model is a reasonable choice for businesses that want to reduce initial investments and leverage the expertise of transportation providers.
This model is particularly suitable for businesses with medium-scale transportation needs, but not optimal for large-scale logistics operations or those
requiring comprehensive supply chain management.
Third-Party Logistics (3PL)
1 Comprehensive Management 2 Diverse Services 3 Integrated Systems
Manages the execution of logistics services for each Handles import/export procedures, freight transportation, Integrates with the customer's system, resulting in higher
functional department on behalf of the business owner. combined circulation, inventory storage, and information efficiency.
processing.
Advantages and Disadvantages of the 3PL Model
Advantages Disadvantages
• Optimize logistics processes: Professional providers • Loss of direct control: Dependent on the provider for
manage all logistics activities. logistics operations.
• Cost savings: No need to invest in logistics infrastructure or • Service costs: Can be high, especially for complex services.
personnel. • Quality risks: Quality depends on the provider, which can
• High expertise: Utilize expertise and wide networks to impact service.
improve efficiency. • Complex relationship management: Requires close
• Flexible scalability: Services can be easily adjusted to coordination with the provider.
business needs. • Data security: Risks of information security when sharing
with a third party.

Who is it suitable for?

The 3PL model is a reasonable choice for businesses that want to optimize logistics processes and leverage the deep expertise of logistics
service providers. This model is particularly suitable for businesses with large or international transportation needs.
Dropshipping - A New Product Delivery Method
Expanded Product Catalog
No Need to Manage Inventory With the Dropshipping model, sellers can expand their
In the Dropshipping model, the seller does not have to product catalog without additional investment. This helps
manage, store or ship the goods themselves. Instead, the increase business opportunities and attract more
Dropshipping service provider will take care of these tasks. customers.

1 2 3

Reduced Investment Costs

Businesses do not need to spend money on purchasing
inventory, building warehouses or hiring staff. This
significantly reduces the operating costs.
Dropshipping
Dropshipping vs. Third-Party Logistics
(3PL)

Dropshipping Third-Party Logistics (3PL)

Retailers do not stock inventory. Instead, they transfer Comprehensive logistics services including
orders directly to the manufacturer or supplier, who is transportation, warehousing, order processing, etc. The
responsible for fulfillment and shipping. 3PL provider will manage the entire process on behalf
of the client.
Dropshipping vs. Third-Party Logistics (3PL)
Criteria Dropshipping Third-Party Logistics (3PL)

Inventory Management No need to store inventory, suppliers hold and Merchants own the inventory, but the
manage the inventory. warehouse and management are handled by
3PL.

Initial Costs Lower, as there is no need to invest in Higher costs due to the need to invest in
warehousing and inventory. inventory and 3PL service fees.

Process Control Lower control, as the supplier is responsible Higher control, can customize and manage
from production to delivery. the quality of the delivery service.

Delivery Speed Depends on the supplier and their location, Faster delivery speed as the goods are stored
often slower as the goods may be shipped domestically or in warehouses closer to the
from overseas. customers.

Product Quality Cannot be directly controlled, depends on the Can control the product quality before
supplier. delivery.
Dropshipping vs. Third-Party Logistics (3PL)
Criteria Dropshipping Third-Party Logistics (3PL)

Customer Experience May be inferior due to longer delivery times and Improves customer experience with faster
difficulty handling returns or warranties. delivery and easier returns management.

Scalability Easy to scale quickly without worrying about Scalable, but dependent on the 3PL's
warehousing or inventory management. warehouse capacity and capabilities.

Returns More complex, as the seller needs to work with Easier, as the 3PL can assist with processing
the supplier to handle returns. returns and warranties.

Profitability Lower profit margins due to high competition Potentially higher profit margins as the seller
and the need to share profits with the supplier. controls the entire supply chain.

Suitable for Small businesses, startups, or those who don't Larger businesses that want to optimize their
want to invest heavily in warehousing and logistics processes but still maintain control
logistics management. over inventory and customer service.
Fourth Party Logistics (4PL)
Comprehensive Integration Design and Operation Holistic Management

As an integrator: consolidating, connecting the resources, Design, build, and operate a complete Logistics chain. Responsible for managing the flow of logistics, providing
potential, and scientific and technical facilities of its own with solutions, planning, logistics consulting, and transportation
other organizations. management. Manage the entire logistics process.
Advantages and Disadvantages of the 4PL Model

Advantages Disadvantages
• Comprehensive management: Integrates the entire supply • Loss of direct control: Completely dependent on the provider.
chain, helping to optimize logistics. • High costs: Service costs may be high due to complexity.
• Resource savings: Businesses can focus on core activities • Quality risks: Service quality depends on the provider.
without having to manage logistics.
• Dependence on a single partner: High risk if there are issues
• High expertise: Ensures efficiency with the provider's with the provider.
advanced expertise and technology.
• Difficulty in partner selection: Need to choose a suitable and
• Flexible scalability: Easy to adjust the scale of logistics reliable provider.
according to needs.

Who is it suitable for?

The 4PL model is a reasonable choice for businesses that want to outsource the entire logistics process and leverage the comprehensive
management of the service provider. This model is particularly suitable for businesses that need to manage a complex supply chain and seek
integrated resources from multiple sources, but not suitable for businesses that want to maintain direct and detailed control over each logistics
activity.
Fifth Party Logistics (5PL)
1 New Model 2 Advanced Technology 3 Comprehensive Management
5PL is an advanced logistics service model. It focuses on Using information technology and data, 5PL efficiently 5PL providers have the capability to comprehensively
optimizing the entire supply chain, from raw material manages logistics operations, optimizing transportation manage the supply chain, including selecting other
procurement to delivery to the end customer. cycles, warehousing, and order processing. logistics service providers, such as transportation,
warehousing, order processing, etc.
Advantages and Disadvantages of the 5PL Model

Advantages Disadvantages
• Integrates the entire supply chain: Comprehensive management of • Technology dependence: Requires a complex technology system and
multiple resources and suppliers, leading to optimization across the large data management capabilities.
entire chain. • High costs: The sophisticated and technology-integrated services can
• Cost optimization: Uses advanced technology and data analysis to lead to higher costs.
optimize logistics processes and reduce costs. • Loss of control: Businesses are completely dependent on the 5PL
• Scalability: Suitable for large-scale, complex, or multinational provider to manage the supply chain.
transportation needs. • Security risks: Sharing data with multiple third parties can increase the
• High level of automation: Applies advanced technologies like artificial risk of information leaks.
intelligence and process automation to improve efficiency. • Requires appropriate scale: Not suitable for small businesses with
• Multi-supplier management: Ability to coordinate and manage multiple simple logistics needs.
different logistics suppliers within a single system.

Who is it suitable for?

The 5PL model is a reasonable choice for businesses that want to automate the entire supply chain and integrate digital logistics solutions through service
providers. This model is particularly suitable for large-scale e-commerce businesses that need to manage global supply chains with strong technological support.
However, it is not suitable for businesses that want to manually control each logistics step or are not ready to invest in advanced technology solutions.
6PL - A New Stride in Supply Chain Management
AI-Driven Management Advanced Automation
AI plays a central role in 6PL, supporting decision-making. By analyzing real-time data, Automation in 6PL goes beyond automating routine tasks. It is integrated into the
AI predicts demand, detects disruptions, and optimizes the supply chain. decision-making process, such as automatically triggering production when inventory
reaches a threshold.

Seamless Integration Predictive and Prescriptive Analytics

6PL connects and communicates with all components in the supply chain, from raw 6PL provides forecasts and prescriptive solutions, such as predicting market trends
material sourcing to final delivery. and recommending inventory adjustments.

Customizable and Flexible Solutions Sustainable and Responsible

6PL has the capability to be customized and scaled, allowing businesses to adapt the 6PL emphasizes sustainability and environmental responsibility, such as optimizing
model to their specific needs. delivery routes and minimizing fuel consumption.
Types of Logistics by Process
Inbound Logistics Reverse Logistics
The process of transporting, storing, and controlling raw The process of recovering, recycling, or disposing of used
materials from suppliers to the business. The goal is to products. The aim is to optimize value and/or ensure safe
ensure a ready supply to meet production needs. and environmentally responsible handling.

1 2 3

Outbound Logistics
The process of transporting, storing, and controlling finished
products from the business to the customer. The purpose is
to meet customer needs in a timely and efficient manner.
Inbound Logistics

Inbound Supply Time Management Cost Optimization

The process of procuring, transporting, and storing Closely managing and controlling the location and Managing and optimizing the costs associated with
input resources and raw materials to meet timing of inbound material deliveries to ensure a the inbound logistics process, such as
production needs. This includes finding, negotiating ready and timely supply for the production process. transportation, storage, inventory control, etc. The
with, and managing suppliers. goal is to minimize costs across the supply chain.
Inbound Logistics Process
• Step 1: Purchasing and Sourcing: the company identifies, evaluates suppliers, negotiates prices, and purchases
raw materials.

• Step 2: Recording and Receipts: the company records the purchase order and receives the receipt after payment.
• Step 3: Notification: when transporting raw materials, the supplier will electronically declare the tracking
information of the shipment for the company.

• Step 4: Load Arrival: move the received goods to the yard/warehouse or the designated recipient according to the
company's instructions.

• Step 5: Receiving: employees unload the goods, scan the barcodes, and inventory the goods to ensure they
match the purchase order. After that, the goods will be transferred to the production warehouse at the factory or
the production facility to continue the production activities.

• Step 6: Reverse Logistics: the team receives and transports the returns from customers due to defective goods,
issues in the delivery process, repairs, etc.
Outbound Logistics
Objectives Ensure products are delivered to customers quickly, in the right quantities, and at the right time to effectively meet their needs.

Location Management Track and manage the location of products during transportation, ensuring products are delivered to the correct customer address.

Time Management Develop detailed transportation plans, forecast demand and delivery times to ensure products are delivered within the customer's required
timeframe.

Cost Management Optimize transportation, storage, and delivery costs to minimize distribution expenses and meet the company's profit objectives.
Outbound Logistics Process
• Step 1: Customer Order: customers place orders through the company's sales channels.
• Step 2: Order Processing: the company confirms the order, receives the requested quantity, and checks if the
inventory has enough to fulfill the order.

• Step 3: Order Confirmation and Replenishment: at this stage, the reserved inventory will be transferred to the
main storage, replacing the products the customer has purchased. This process may trigger the production of
more goods or the procurement of raw materials from suppliers to maintain a stable inventory level.

• Step 4: Picking: warehouse staff select the goods from the reserve inventory to complete the order.
• Step 5: Packing, Staging & Loading: staff pack, label, and document the order according to internal and customer
requirements. They then proceed to load the goods onto the trucks.

• Step 6: Shipping & Documenting: the order leaves the warehouse and is transported to distributors or partners.
The company's system will record the shipment and send detailed information to the customer for tracking.

• Step 7: Last Mile Delivery: the order is transported from the distributor to the end consumer.
Inbound Logistics vs. Outbound Logistics

Criteria Inbound Logistics Outbound Logistics

Trend Input Output

Focus Supply Demand

Role Receiving Delivery

Process The process of searching, procuring, and transporting raw The process of planning the distribution of goods from the
materials to the factory for processing and production. manufacturer to the final consumer.

Relationship Between suppliers and manufacturers Between distributors, retailers, and end customers

Workflow Handling of incoming raw materials (inward movement) Inventory management, order processing, and delivery to
end customers (outward movement)

Key Activities Procurement, storage, and transportation of raw materials Packaging and distribution of goods to the final consumer.
to the production site.

Optimization Optimize Just-in-time (JIT), which means the right product Optimize costs, meaning selecting the most cost-effective
- the right quantity - the right place - at the right time. transportation methods, ensuring goods are not damaged
during transit, and meeting delivery time frames.

Strategic Planning Provide the necessary raw materials for the factory to Meet customer demand, support the sales process to
produce the products. increase profitability.
Reverse Logistics
1 Reclamation 2 Reuse 3 Recycling
Reclaiming by-products, waste materials, Processing and reusing used products. Recycling recyclable materials to
and elements that impact the minimize environmental impact.
environment.

4 Environmental Protection
Contributing to environmental protection through effective waste management.
Foward Logistics & Reverse Logistics
Classification of Logistics Activities by
Commodity Object

FMCG Logistics Automotive Logistics Specialized Logistics

Logistics for fast-moving consumer Automotive industry logistics: serves Includes logistics for the chemical,
goods: serves for consumer goods for the manufacturing and electronics, and oil and gas
with short shelf life. distribution of automobiles. industries, meeting the specific needs
of each sector.
Logistics Activities Classification by Scope of
Operations

Humanitarian Logistics Business Logistics Military Logistics

Humanitarian logistics focuses on Business logistics serves production Military logistics ensures the supply of
providing relief goods and services to and commercial activities, including weapons, food, fuel, and other
victims of natural disasters, wars, inventory management, transportation, necessary materials for the armed
diseases, and other emergencies. order processing, and related services. forces during wartime or training
operations.
Classification of Logistics Activities by Scope

Logistics and Circular Community-based Logistics Sustainable Food Logistics

Economy Community-based logistics focuses on Sustainable food logistics focuses on
The circular economy focuses on reusing supporting the activities of the local ensuring a safe, quality, and sustainable
and recycling resources. Circular community, such as providing food, food supply by optimizing the supply
economy logistics supports these healthcare, education, and other essential chain, minimizing waste, and protecting
activities by optimizing the supply chain services. the environment.
to minimize waste and maximize
efficiency.
1.4. Distinguish the Types of Logistics by Position in
the Supply Chain
1.4. Distinguish the Types of Logistics by
Position in the Supply Chain
Procurement Logistics
Manage activities related to the procurement of raw
Distribution Logistics
materials, components, and goods from suppliers until they Manage activities related to the distribution, transportation,
are introduced into the production process. and delivery of products to the final customers.

1 2 3

Production Logistics
Manage activities such as production planning, storage
arrangement, and transportation of products between
production stages.
a. Procurement Logistics
Supply Management Transportation & Delivery
Purchasing logistics involves managing and organizing the processes Activities such as transportation planning, warehouse management,
related to the supply of necessary input factors for the production and order processing, and delivery are carried out to ensure that input
business operations of the enterprise. factors are supplied in a timely and efficient manner.

Negotiation & Contracting

Purchasing activities are carried out through contracts and market orientation, requiring negotiation skills and management of relationships with
suppliers.
a. Procurement Logistics
b. Production Logistics

1 Effective Production 2 Integrated Supply 3 Improved Production

Process Management Chain Efficiency
Production logistics plays a Production logistics connects By optimally managing
crucial role in production the activities before and after material flow, internal
planning, material flow control, production, such as raw transportation processes, and
warehouse management, and material procurement and ensuring adequate inventory,
internal transportation. These product distribution. This helps production logistics
activities ensure continuous optimize the flow of the entire contributes to increased
production, minimize supply chain, from source to productivity, reduced waste,
inventory, and reduce costs. customer. and improved product quality.
b. Production Logistics
c. Distribution Logistics

1 Process Coordination 2 Supply Chain Connection

Distribution logistics involves coordinating Distribution logistics creates interaction between
processes such as transportation and storage to activities in the Logistics system to distribute the
deliver goods to the end consumer. company's goods to customers.

3 Delivery Optimization 4 Enhance Customer Experience

Through optimal management of transportation Distribution logistics plays a crucial role in
and storage processes, distribution logistics helps improving the customer experience by delivering
ensure timely and efficient delivery to consumers. goods on time, to the right location, and in good
condition.
c. Distribution Logistics
Chapter 1 Summary
This chapter provided an introduction to the fundamental concepts of logistics. We explored the evolution of logistics
services, from simple distribution to complex supply chain management. We also delved into the components of a
logistics service system, highlighting the importance of logistics in various business operations.

The classification of logistics activities, based on service levels, commodity objects, and scope of operations, was
discussed, emphasizing the multifaceted nature of the field. Finally, we examined the different types of logistics by
position in the supply chain, including purchasing, production, and distribution logistics.