Logistics project

Logistics:
One of the most important department in this company, because it responsible
for more than of the working capital of the firm and this effect the turnover of the firm.
Since the firm produces more than 1200 products theyre for its critical to have an
efficient logistics management department that will lower the amount of many investment
in raw materials, in process inventory, finish goods, and hence ma!imi"ing the customer
satisfaction to more simplicity for e!planation# assets turnover $ Sales
%otal assets
%otal assets#&cash, air, inventory, other current assets'.
%his firm invests of the total current assets in inventory.
(orking capital is consist of raw materials sup assembles,
&working process ) finish goods'.
Customer service level:
%he goal to determine the least total cost method of logistics, while keeping
customer service level in mind.

%he result of the whole logistics activity begin with order entry and ends with delivery of
product to customer.
%he main strategy of the firm concern the customer service levels the availability of 1200
products in the show* at anytime.
+ustomer service level is important a sales will increase it each ,- decrease in customer
service will decrease sales by 2.-.
The methodology used to follow of the actual service level
availability of stock in the firm:
%he firm makes sure that it has arsenal stock level in inventory/ this level of
stock is determine by the forecasted sales of last year to each customer.
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S a l e s I n f o r m a t i o n
T e c h n o l o g y
H u m a n
R e s o u r c e s
L o g i s t i c s M a r k e t i n g F i n a n c i a l
C h a i r m a n
Ability to back order:
0sing a computer program to make the back order for each customer in the
coming order.
Order cycle time:
1ts time from order statement &2ntry' until the delivery to the customer.
The elements of order cycle:
The first step: trans motion of the customer order to the warehouse.

The second step: order processing and assembly the preparation of the bill of
leading the checking the credit position of this specific customer, order assembly.
The third step: addition stock acquisition time: if a product is not available in
the warehouse e!tra time will be needed to full fell such order.

The fourth step: delivery time: products are delivered to customers with in
2.hrs at most to distributed and only 3hrs to their show room using trucks.
%he more the time elapse in order delivery, the less time the customer service level.

arranty: 10yrs on warranty on stainless steal, stew pans.
Customers claims! complains:
4s taking into consideration because sometime they are true and effects the
5uality of the products.
"roduct packing:
4s shown in the figure the firm uses different types of packing colored
packing for the final customer and there is another type of packing for the distributor.
#ar code system as shown in the figure:
%he firm has registered internationally for the purpose of pane rating, the
foreign market they registered the article number for all their product for the simplicity
product movement.
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$ethodology used in order processing and information
handling system
%hey use the most recent technology for the industrial purposes
&6an software' which links all the departments of the firm so that the decision makers
would be aware of everything that happens with in the firm.
Order preparation: receiving order from customer.
Order transmittal: transferring orders information by &a! or phone or 27mail' to the
order entry personal.
Order entry: to check the stock for this order an show in the program if there is a back
order then the system checks the credit of the customer, transaction and billing.
Order filling: the order is full field and assemble in the warehouse.
"acking for shipment: every 12 pieces are packed with a bar code different from that of
each piece, then we short scheduling for delivery.
Order status reporting: in this step we contact the customer to make sure that the order
is full field correctly.
The methods used for forecasting:
%he firm uses the %averages method of forecasting& by using the historical
data of the previous year.
The inventory decision:
1nventories are stockpiles of raw materials, supplies, and components, work in
process 8 finished goods.
'uantity
'(
'
)
*+O+" ,100 %ons-
L+T+ Time
3
1n .l/Ahram co. they take the inventory decision according to the instantaneous
replenishment model, they divide the annual demand on the number of orders.
%he annual demand for aluminum coils is 1200 tons per year/ number of orders per year
is . orders,
9uantity purchased per order is e5ual to 1200 $ 300 tons : order.
.
.+'+0 $ 1200 $ .
300
$odes of transportation:

Air:
4ir is used sometime when a certain foreign customers needs a big order to
be delivered as fast as possible in this case the customer bears the transportation
e!penses.
Truck:
%he company own about 20 trucks to delivery orders to all their customers.
ater:
0se ships in e!porting the products or importing raw materials.
The firm concept concerning the application of logistics
integrated cost:
%he total cost analysis is to minimi"e the total cost of transportation,
warehousing, inventory, and order processing and information system.
Total cost
'+1 2+3+T
Cost of
"reparing
Orders
Covering cost

4 ) 5umbers of orders
.
4s shown in the graph and e!plained before that the company as we take e!ample the
aluminum coils order per year $ 1200 tons : year.
%hey make for order per year to benefit from the lot 5uantity offer in the price and to
benefit from making a small number of order per year too to decrease the cost of each
order shipment.
%he straight line in the graph shows the constant cost to be paid in each order or the cost
of preparing orders.
%he curve line in the graph show the cost of inventory 8 carrying cost it decrease while
number of orders increase.
arehousing 6 handling equipment used:

The firm owns 7 private warehouse:
1' 4 warehouse for raw materials.
2' 4 warehouse for subassemblies.
3' 4 warehouse for finished goods.
Advantages of using private warehousing:
1' ;ess e!pensive warehousing in this case &highly utili"ed'.
2' (arehousing operation is highly controlled.
3' Owing a private warehouse provides greater fle!ibility.
Concerning handling equipments:
Spare parts for e5uipment are ordered when needed and delivered by ,18L-
to avoid huge investment in spare parts.
"urchasing strategy of the firm:
%he firms uses the 5uantity discounts purchasing strategy to benefit it from
reduction of purchases 8 increasing in storage inventory costs.
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
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