Fundamentals of Business

Production logistics

The term is used for describing logistic processes within an industry. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time.

Production materials
√ Riley put materials in three categories Raw materials are commodities, materials from primary sector in their raw, unprocessed state whose value fluctuates daily. Commodities categories:
Soft commodities
Example - Corn, wheat, rice, cocoa, cotton, wool. Hard commodities - ferrous - example - Steel and non ferrous - example - Copper, zinc, aluminum, silver
Plastics – example - Polypropylene, polyethylene.
Chemicals - example - benzene, butadiene, methanol, ethylene.
Fuel - example - gasoil, kerosene, heavy fuel oil, unleaded petrol, crude oil Brent Blend. Pulp, paper, board

√ Semi finished and process processed goods ed Materials that have gone some way through a secondary stage. For example wood pulp, non sifted squeezed fruit juices

√ Component part and assemblies materials that are independent and complete just need to be assemble together to form a functional unit.
For example
Electronic printed circuit boards, bolts, nuts, nails

Materials management
The issue is not the transportation itself, but to streamline and control the flow through the value adding processes and eliminates non value adding ones. Production logistics can be applied in existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency.