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Logistics is comprised of all the operations needed to deliver goods or services, except making the goods or performing the services. In manufacturing, it covers the material flows between plants and between production lines within a plant. It also includes the information flows generated by the processing of transactions associated with the material flows. Information and funds flow can be further broken down into protocol and decision layers, where protocols are preplanned event responses. Setting the boundary between these layers is a key issue in designing a logistics system. Parts spend more time in the custody of Logistics than in Production, but improving Production is often the easiest way to reduce the waiting time in logistics.
The boundary between logistics and production
In manufacturing, logistics includes the following:
Material flows: Shipping, transportation, receiving, and storage and retrieval between plants and between production lines within a plant.
Information flows: Transaction, processing associated with the material flows, analysis of past activity, forecasting, planning, and scheduling future activity.
Funds flows: Payments triggered by the movements of goods and information.
Inside the plant, the logistics or production boundary is in fact between organizations. Production does not only run machines and assembly stations; it also conveys workpieces between contiguous stations. Even though these transfers do not transform the workpieces, this activity is still considered to be production, because it is run by the Production department.
In-bound, out-bound, and in-plant logistics
Another key boundary is that between the plant and the rest of the world, which is usually materialized in the form of docks for receiving and shipping. In-plant logistics is often called dock-to-dock logistics. Besides the obvious differences in distances, quantities, and vehicles, in-plant logistics differs from the in-bound logistics of getting parts fr
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