1.1 Is it true that every organisation has to move materials to support its operations?

Give
examples from different types of organisation to support your views.
If we take a very broad view of materials (including money, information and other
intangibles) then every organisation has to move them. In practice, this is a clear trend in
logistics, where managers are ‘replacing inventory with information’. However, even with a
narrow view of logistics moving goods, every organisation has to move goods of some kind
(as you can imagine when security firms make deliveries to banks and insurance companies
make extensive use of postal services).
1.2 How important is logistics to the national economy? How has this changed over time?
Figures in the chapter suggest the scope of logistics in some countries. It would be
interesting to compare these with figures for other countries. Because it is difficult to get
reliable figures about logistics, the question of whether this has changed is open to debate.
A reasonable view says that organisations are putting more effort into customer service, and
hence logistics, so its national effect is growing markedly.
1.3 Organisations are only really interested in making products that they can sell to
customers. Provided they have reliable first tier supplies and transport for products to first
tier customers, logistics is irrelevant. Do you think this is true?
The simple answer to this is ‘no’ as each organisation should be concerned with operations
throughout its supply chains. They can be affected by events at remote tiers of customers
or suppliers – for instance a remote supplier going out of business can affect supplies of
important materials further down the supply chain, and many organisations have been
affected when distant trading partners act unethically and bring disrepute on the whole
chain. In practice, external integration is still in its infancy, and few organisations really look
beyond their immediate suppliers and customers.

1.4 Very few organisations deal with the final customer for a product. Most work upstream
and form one step of the supply chain, often passing materials to internal customers within
the same organisation. How does the type of customer affect the organisation of logistics
and the measures of customer satisfaction?
In principle all customers should be treated in the same way, and logistics should aim for
continuing customer satisfaction. In practice, internal customers may use different measures
of service, perhaps emphasising an internal view rather than an external one.
1.5 The cost of logistics varies widely from organisation to organisation. What factors affect
these costs? Are the costs fixed or can they be controlled?
There can be a huge variety of logistics costs in different types of organisation. The usual
ones are the type of materials moved, its weight, volume, perishability, value, special
handling, packaging, distances moved, and so on. Some of these are under the control of
logistics managers, but the majority are not (but perhaps logistic manages can influence
them).
1.6 How can you measure customer service or satisfaction, and why is it important?
There are many possible measures of customers service, including lead time,
responsiveness, costs, amount of damage, errors, product availability, and so on. We return
to this question in chapter 14. Customer service is important for the same reason that it is
important to every other function within an organisation – poor customer services loses
customers, and without customers the organisation will soon close down.