LOGISTICAL PERFORMANCE CYCLES

MATERI
AL
SOURC PROCUREMENT
CYCLE

COMPONENTS
PLANT

MANUFACTURI
NG SUPPORT
CYCLE
ASSEMB
LY

DISTRIBUTION
CENTER PHYSICAL
DISTRBUTION

CUSTO
MER
SYSTEM
SYSTEM INPUT
OUT PUT
ORDER ORDER CUSTO SOURC ORDER
PROCES TRANS- MER ING PLACEMENT
SING MISSION ORDER &
EXPEDITING

ORDER PRODUCT DELIV SUPPLIER

SELEC TRANSPORT ERY TO

RECIE TRANSPORT
VING ATION

PHYSICAL PROCUREMENT
DISTRBUTION CYCLE
CYCLE
Logistical performance cycles
[Ref. Bowersox pages 46 to 53 and fig. 15]
Logistical performance cycles link the facilities in a value chain with each other.
The facilities in the value chain are called nodes and the links connecting these nodes are
logistical performance cycles.
These links are product transportation and information flows. Obviously information flow is
vigorous in both directions where as product flows down the value chain although in some cases
upward flow is possible. Close examination of these links reveals dynamics, interfaces and
decisions within the logistical system.
Logistical performance cycles are input sensitive and highly dynamic. They render entire system
dynamic and responsive to customer needs. If the LPCs are not dynamic obviously the
organization loses the edge.
Inventory is made to flow from one warehouse to another, factory to ware house, plant to plant or
warehouse to customer. Sluggish LPCs reveal poor interface between the nodes and between
customer and organization.
LPCs reveal effectiveness and efficiency of resource allocation and operational decisions in the
organization.
To understand the operating system one has to analyze these linksA logistical operating system
requires links, nodes and inventory to perform logistical operations. Nodes are the facilities
linked by logistical performance cycles. Inventory is measured, stored and moved in nodes
regularly. But this may also be done during transportation.We can notice that three types of
logistical performance cycles exist in a logistical operating system. The cycle linking
material source and components plant is procurement cycle.
Procurement cycle
Components plant is a node which manufactures components or detailed parts needed to make
sub assemblies for the final assembly. This is where the operations function begins to operate.
Raw materials are to be made available here for production. Procurement cycles connect raw
material source and component plant or plants.
Manufacturing support cycle.
The cycle linking components making plant, assembly and distribution center is manufacturing
support cycle.
The logistical network for an organization may contain several components plants and or several
assembly plants. These plants are to be linked to enable flow of inventory as and when needed.
Finished goods should flow from assembly plant or plants to the distribution centers. This
support to manufacturing is provided by manufacturing support cycle.
Physical distribution cycle.
The cycle linking distribution center to customers is called physical distribution cycle.
Logistical performance cycles are input sensitive and dynamic in nature. We can visualize these
cycles vibrating with vigor whenever a customer order is received for fulfillment.
Overall efficiency of logistical operating system depends on the efficiency of logistical
performance cycles. Logistical performance cycles link participating firms and organizations in
the supply chain.
Managing operational uncertainty
Variance in logistical performance cycle results in customer dissatisfaction. If an overall
customer delivery cycle is analyzed, we naturally find that it is made up of several mini cycles
performed in logical sequence. These cycles are, order selection cycle, order processing, order
transmission, customer delivery cycle and order transportation cycle. We have to analyze these
cycles to find out difference between average performance time and maximum cycle time. This
gap is to be analyzed to eliminate variance.
When this variance is reduced goods begin to arrive at destinations earlier than expected.
Infrastructure is required to be strengthened to cope with improved performance.