SUMMARY

The approach to logistics strategy planning outlined here must of course flex to

suit particular industries and business situations. The important theme is the use

of a formalized framework that takes into account business issues as well as more

detailed logistics issues and combines the conceptual and quantitative evaluation

techniques that are available. The basic methodology can be followed in any

organization.

The various roles of DCs and warehouses were discussed, and once again the

influence of the different elements within logistics was noted.

The basic cost relationships have been described. These relationships have been

brought together to produce a total logistics cost. It has been shown that trade-off

analysis can be used to help optimize the cost-effectiveness of distribution systems,

even where this may mean that individual cost elements are increased.

A formal planned approach for developing a physical distribution strategy was

described. The major discussion points have been the need to determine appropriate

product flows and the planning of DC and facilities location. A number of

different aspects have been covered, and it has been emphasized that the problem

is a complex one, involving a great deal of data manipulation and the need for

quite sophisticated modelling techniques.

In the final section, a number of factors were put forward for consideration when

a practical search for a site takes place. These factors are all influential in ensuring

the effective operation of a DC.