For example, for an e-commerce company, inbound logistics would be the receiving and storing products from a manufacturer that it plans to sell., Operations include procedures for converting raw materials into a finished product or service. "About Michael Porter - Biography." Advantages Of Marketing Activities, 9 Management Activities which Management has to do, Top 20 Logistics Companies in the World in 2017. Michael E. Porter. This relates heavily to the inbound logistics primary activity, where an e-commerce company would look to procure materials or goods for resale., Hiring and retaining employees who will fulfill business strategy, as well as help design, market, and sell the product. "Competitive Advantage: Creating and Sustaining Superior Performance," Page 40. Describe the activities necessary to convert the inputs provided by inbound logistics into final product form (machining, packaging, assembly, etc.) These includes materials, handling, stock control, transportation, etc. Now we come to one of the major logistics activities which is one of the most resources heavy and revenue heavy segment of logistics. to facilitate, the production or market distribution. Operations – These are the transformation activities that change inputs into outputs that are sold to customers. (1) Inbound Logistics. These include white papers, government data, original reporting, and interviews with industry experts. The above were all the functions of logistics and the logistics activities which have to be taken care of in any major company. in your company? This is money which can be used as a working capital and it is money on which banks are applying interest. So if the commercial team has given the go-ahead for a purchase order of 10 units, the available inventory will automatically be deducted by 10 units so that double ordering does not happen. With the above example, you understood the importance of Inventory control in Logistics activities. Given the importance of the value chain, Michael Porter developed a strategic management tool for analyzing a company’s value chain. Porter, known for Porter’s five forces, laid out his method of analyzing value chains in his 1985 book Competitive Advantage. Porter sought to define a company’s competitive advantage noting that it stems from a company’s processes, such as marketing and supporting activities. c) Cycle timing longer than necessary, due to some redundant activities along the supply chain, queue of waiting operations and low automation of activities. Both inbound and outbound Logistics Management can be led by the organisation which may have their own fleet of vehicles. I love writing about the latest in marketing & advertising. Inbound logistics comprises all activities that secure supply for manufacturing, assembly, and retail operations. Free Press, 1985. Accessed May 17, 2020. What activities are used to receive, store, and disseminate inputs to a product (materials handling, warehousing, inventory control, etc.) I. Inbound logistics; which is concerned with the smooth and cost effective inflow of materials and other inputs (that are needed in the manufacturing process) from suppliers to the plant. Michael E. Porter. However, transportation is a cost to the dealer as well and reduces his profit – due to which the company has to give higher profits to the dealer – to negate his costs. FMCG, consumer durables, and many other industries regularly manufacture goods. Here is a Video on Logistics and Supply Chain Management. "Competitive Advantage: Creating and Sustaining Superior Performance," Pages 42-43. You can learn more about the standards we follow in producing accurate, unbiased content in our. There are many different logistics activities or functions of logistics which are used by a company. Accessed May 17, 2020. Material handling 3. Here are the four supporting activities. Improving Inbound and Outbound Logistics Is an Important Part of Effective Supply Chain Management. Read the latest good works, sustainability efforts, mergers and acquisitions, new hires, and sealed deals happening in the supply chain in December 2020. This is why, especially in export markets, a huge amount is spent in the packaging of the product. The inbound logistics for e-commerce businesses can be the acquiring of supplies that you will use for your business, receiving goods at a warehouse, or the return products from the customers. During a recent professi… Michael E. Porter. A value chain is a business model that describes all of the activities that a business employs to create a product or service. Inbound logistics – These are all the processes related to receiving, storing, and distributing inputs internally. Similarly, you need to have entries that the goods have left from your warehouse and reached the dealer. Free Press, 1985. Packaging the product is a responsibility of the logistics team because otherwise the product will reach damaged to the end customer and this is a huge cost to the company. Material storage 4. Electronic retailing (e-tailing) is the sale of goods and services over the Internet, which can include B2B or B2C sales. Amazon Primary Activities. A solid infrastructure is necessary for all primary functions., Technological development is used during research and development and can include designing and developing manufacturing techniques and automating processes. 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