Logistics Activities in the Production Process

products to consumers, and must always ensure the stability and continuity of transportation flows.

 Phase 3: Supply Chain Management The activities of this phase are a continuation of activities from the supplier - to the manufacturer - to the customer along with services that add product value such as providing related documents, tracking, checking ...

Through the stages of development, logistics activities are increasingly diverse and enriched. From logistics only representing customers to perform tasks related to basic input materials such as: customs clearance, transportation, preservation, inventory levels ... to providing a complete package of transportation services from warehouse to warehouse ( Door to Door ) at the right place and time to serve customer needs. Nowadays, the service requirements for customers are diverse and rich, service providers must organize and manage a synchronous system from delivery to transportation, supply of raw materials for production and business, storage of goods in warehouses, distribution of goods at the right place and time, use of electronic information to monitor, check ...

It is clear that the freight forwarding service is no longer a separate, simple activity as before, but has been developed to a high level with the integration of a series of activities from delivery to freight transport. These activities are the fundamental elements that create a complete logistics chain and are collectively called logistics activities.

To understand more generally, we divide the logistics service chain into three main activities as follows:

 Identify and manage suppliers, process, order and distribute physical goods (raw materials or services) from suppliers to manufacturers.

 Preserve raw materials, manage goods and inventory services during and outside the production process.

 Transport and distribute goods from manufacturers to final consumers.

However, these are only normal logistics activities (forward logistics - starting from the input of raw materials and ending when the goods are distributed to the final consumer), and do not reflect reverse logistics activities. [8] (reverse logistics - is the activity of planning and managing the flow of goods from customers returning to sellers, becoming inventory, or goods returned to manufacturers for any reason and demanding a refund, or it can also be the flow of goods being resold on the secondary market).

These activities will be illustrated in diagram 1.

Manufacture

Production process

Industrial Logistics Support

Diagram 1 : Logistics activities in the production process

Warehouse 1

Place of manufacture

Warehouse 3

Place of manufacture

Warehouse 4

Place of manufacture

Warehouse 2

Place of manufacture

Supplier 1


Supplier 2


Supplier 3


Supplier 4

Maybe you are interested!

 Demand forecasting

 Order

 Procedure

 Warehouse management

 Transportation

 Information flow

Material supply

Manufacture

 Production planning

 Purchase of raw materials

 Materials management

 Warehouse management

 Packing/shipping

 Information flow

Physical distribution

 Demand forecasting

 Order

 Warehouse management

 Transportation

 Customer service

 Information flow

Source : Benjamin S. Blanchard (2006, sixth edition), Logistics Engineering and Management , Publisher:Pearson Education International, - 5-.

3/ Logistics activities at freight forwarding enterprises

3.1. Freight forwarding business

Freight forwarding enterprise (abbreviated as DNGNVT) is an enterprise that provides freight forwarding services in society. The products of a freight forwarding enterprise are freight forwarding services (freight forwarding services) in which the freight forwarding enterprise acts as a forwarder.

The purpose of the operation of freight forwarding enterprises is to perform the functions of a freight forwarding organization. Specifically: receiving goods from the sender, organizing transportation, warehousing, performing paperwork and other entrusted services related to delivery under the authorization of the shipper, the carrier, or other freight forwarding service providers (customers) with the goal of completing the customer's requirements correctly and achieving the highest, long-term, and sustainable efficiency.

In the conditions of competition and integration, the movement of goods from production to consumers becomes more complicated, the demand for logistics services is increasing and the provision of traditional transportation services with only " warehousing " and " transportation " simply becomes outdated. The inevitable task of freight forwarding enterprises is to improve their services towards providing a chain of organized services, closely linked together in the entire process of goods circulation. Therefore, freight forwarding enterprises are increasingly

tend to become logistics service providers.

3.2. Favorable logistics operating conditions of DNGNVT

Freight forwarding businesses always have favorable factors to develop logistics activities. Because freight forwarding is only one of the activities of the logistics chain but accounts for the largest proportion of the total cost of this service (about 1/3 of logistics costs). To become a logistics service provider, businesses must invest in vehicles, warehouses, etc., which is very expensive. Meanwhile, freight forwarding businesses already have such facilities, so when switching to logistics services, they will be more favorable than businesses in other fields because they only have to spend less initial investment capital. On the other hand, freight forwarding businesses are also those who have distributed the activities of many partners in the transport chain to make operations run smoothly at transit points. Consolidation of goods is also within the functions of these businesses. And finally, with the transportation function, freight forwarding companies also perform other commercial tasks such as account transactions with customers related to payment for transportation services.

3.3. Content of logistics activities at DNGNVT

The logistics activities implemented in freight forwarding enterprises are quite diverse, with many components and many services provided, but the main activities are still in the maritime sector (accounting for 80 - 85%) and the most popular are shipping agents and shipping agents. In addition, logistics activities also operate in other fields such as aviation, railways, and highways, creating a diverse and rich transportation model in the circulation of goods. The logistics chain is currently applied to the following main types of services: Import and export freight forwarding and transportation services;

distribution services; packaging and labeling services; consolidation services; warehousing services; agency services; multimodal transport services.

In today's world market, most professional logistics companies operate according to the modern logistics model with many services provided and high added value. That service chain includes:

 Air Freight Forwarding (door to door) – Air Freight Forwarding (D2D).

 Ocean Freight Forwarding (Door to Door) – Ocean Freight Forwarding (D2D).

 Freihgt/ Carrier Management.

 Fast consolidation at warehouse – Consolidation/ Cross docking.

 Order Management – PO Management.

 Vendor Management/ Compliance.

 Value – added Warehousing.

 Consolidation of goods from many countries to a transit port – Multi – country Consolidation.

 Quality control services - QA and QI Programs.

 Production Compliance Service.

 Data Management/ EDI clearing house.

 Barcode scanning and Label Production.

 Documentation collection and transfer service

 Service of building standards for logistics activities – Global logistics Procedures.

 Hanger Container Service (for garments) – GOH and Hanger Pack Service.

 Deconsolidation service.

 NVOCC Services – NVOCC Operations.

 Systemwide Track and Trace/ Web – base Visibility

 Brokerage services, import-export entrustment, AMS declaration, support for applying C-TPAT (Custom – Trade Partner against Terrorism. This is a program of US Customs to apply to business partners against terrorism) – Custom Brokerage and Licensing – Import/ Export/ AMS/ C-TPAT.

 Fourth logistics service provider. This is a very new logistics service model that helps logistics companies increase their value-added services – 4PLs Service.

The world market is increasingly affirming the role of logistics in accumulating foreign currency and accelerating the speed of import and export goods exchange between countries. At the same time, it recognizes large-scale companies such as: APL logistics, Maersk logistics, Frizt Forwarding ... have actively contributed to the overall development of global logistics services. Logistics activities at these companies represent a modern logistics chain, a complete supply chain, from the beginning to the end.

II/ POSITION AND ROLE OF LOGISTICS ACTIVITIES IN TRANSPORTATION AND DELIVERY ENTERPRISES

1/ Location of logistics activities in SMEs

Developing freight forwarding businesses on the basis of perfecting the logistics chain is an important premise for the overall development of the freight forwarding industry.

Nowadays, developing logistics activities in freight forwarding enterprises is the golden key to help enterprises implement their business strategies well. Operating and managing the logistics chain effectively saves time and reduces costs to the lowest level.

costs, damage due to storage, product backlog (Inventory Costs), reducing product costs, increasing the competitiveness of goods in the market, and maximizing profits. Transportation and delivery activities in the logistics service chain will increase foreign currency revenue, speed up the exchange of export goods between countries, contributing to the smooth and balanced development of the economy.

Especially for our country, with its S-shaped terrain, the geographical arrangement of facilities for logistics activities such as seaports, airports, and warehouses has an important and direct impact on the socio-economic development of regions, industrial parks, export processing zones, export and import activities, promoting economic exchange between regions and areas domestically and internationally.

Logistics activities at freight forwarding enterprises bring in large revenues and profits for each country and region. Because any enterprise applying a complete logistics chain will bring in 12 times higher profits than those that do not apply or apply this chain of activities in a fragmented and sporadic manner. According to a survey conducted by market research firm Meta Group with the participation of 63 famous companies in the world, it also gave quite accurate figures on the average cost of logistics activities annually in the production and business sector of about 11 million USD, but if enterprises apply a comprehensive and complete logistics supply chain, this cost will be reduced by about 1.2 million USD per year.

Thus , developing logistics activities at freight forwarding enterprises means developing infrastructure, perfecting management measures, which is an important link and premise for the development of freight forwarding enterprises, the freight forwarding industry and the national economy, politics and society.

2/ The role of logistics activities in SMEs

Nowadays, the trend of globalization and internationalization increasingly requires transportation and delivery activities to be developed at a higher and more complete level. The birth and application of logistics is the completion of this chain of activities. And logistics activities today have been and are bringing great benefits to transportation and delivery businesses.

2.1. Logistics activities minimize costs and enhance service quality.

The application of logistics activities in the freight forwarding business will reduce a lot of costs. Because when applying logistics, the freight forwarding business ensures the conditions of: infrastructure, means of transport, warehouse system ... especially with the support of information technology. All of the above conditions have created a closed operation, starting from the time of receiving goods for transport until the goods are delivered to the recipient at the destination. Logistics has helped the freight forwarding business gather the individual plans of the stages, the tasks in the flow of goods and materials into a unified plan, coordinate all individual actions, dispersed ... into a unified action to implement a general plan that has been outlined on the entire journey of the goods. Ensure transportation and delivery on time, at the right place according to customer requirements.

Applying logistics has created unity in action to implement a predetermined common plan, so all costs in the transportation and delivery business have been greatly reduced, such as storage fees at the starting and ending points of the transportation and delivery journey, especially at the transfer points, limiting the disadvantages of the participating transportation methods as well as promoting their advantages, reducing transportation and delivery time, and increasing delivery time.

Comment