Logistics

What is logistics?

Before having a better glimpse to the logistic management applied to the food industry, it is first important to know exactly what logistics, in a more general way, really is.

According to the Business Dictionary (www.businessdictionary.com), logistics is the “planning, execution and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project or strategy. It may be defined as the “management of inventory in motion and at rest.””

This first definition, however, seems quite vague, and here is the official definition of logistics according to the “Council of Supply Chain Management Professionals” (CSCMP, formerly Council of Logistics Management) (http://cscmp.org/): “The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements.”

            We will first see how the logistic process is build and how it works before applying this model more particularly on the food industry and see what kind of special requirements need to be made.

Logistics. How does it work?

In the food industry in general, logistic starts first with the packaging of the product. Then the goods are being put in storage facilities such as warehouses or stock rooms before being transported to the retailing stores. The transportation part is crucial and requires special equipment such as refrigerated trucks or containers so the goods don’t perish. The transportation part is however the most “tricky” step of the process, since a lot of data needs to be take into consideration (the size of the vehicles, form of transportation, availability and schedule of drivers and the store access) (Kerstin Gustafsson, Gunilla Jönson, David Smith & Leigh Sparks, 2009). The whole process must also be “temperature controlled”. Then the food needs to be put once again in storage unites, and an inventory needs to be made, before the food is being sold to the end consumers. The logistic (or supply-chain) of eatable goods is really expensive and represents the biggest part of the final price of the products.

Concerning logistics and “Lahiruoka” (local food), the process of logistic is quite the same. However the price of the process might be smaller for local food than food that has travel from the other side of the world since the distance from the production site and the retailing place is much smaller.

Concerning the literature about Logistics, I decided to choose this book: “Retailing Logistics & Fresh Food Packaging, Managing change in the supply chain” by Kerstin Gustafsson, Gunilla Jönson, David Smith & Leigh Sparks. (the PDF version of the book can be found HERE).

I choose this book because it is, in my opinion, a quite easy book to understand and it focuses on the supply chain management for food in a very wide way which is quite handy for this group since we don’t know already what the final assignment is and because it still gives a good overview of the whole thing. The book is filled with examples (especially with example from the British retailer TESCO) and case studies in order to have a better understanding of this part of the entire process.