Objective Of Business Logistic

There are 3 Objective Of Business Logistic: 

1) Cost Reduction
• Supplier consolidation
• Component consolidation
• Re-source to low cost countries
• Request For Quotations (RFQ)
• Supplier cost breakdown analysis
• Function analysis / Value analysis / Value engineering
• Design For Manufacture / Design For Assembly
• Reverse costing
• Cost driver analysis
• Should cost
• Product bench-marking
• Design to cost
• Design workshops with suppliers
• Competitor bench-marking 

2) Maximize Customer Service

• Customer-satisfaction/7R

Surveying customers about their level of satisfaction and plotting the results can help managers understand just how satisfied or dissatisfied customers really are. The fact that such indices are quantitative makes them a useful tool for comparing results from different time periods, locations and business units.

• Feedback

To ensure early detection and quick resolution of mistakes, it is important to review the company's approach to soliciting and acting on customers' comments, complaints and questions.

• Market Research

It is absolutely critical to understand why a customer defects. Most customers will blame the price or some other basic product attribute to avoid discussing the real issue. Carefully questioning departing customers is important for two reasons: to isolate those attributes of the company's product or service that are causing customers to leave, and to make a last-ditch attempt to keep the customer. One company found that it recaptured a full 35 percent of its defectors just by contacting them and listening to them earnestly.

• Front-line Personnel

A company must train employees who have direct contact with customers to listen effectively and to make the first attempts at amends when customers have had bad experiences. The employees must also have access to processes to capture the information and pass it along to the rest of the company.

• Strategic Activities

Some companies go to extremes to involve the customer in every level of their business. For example, South-west Airlines actually invited frequent fliers to assist it in the first screening of flight attendants.

3) Maximize Profit

The business firm is the productive unit in an exchange economy. In order to survive, a firm must deal with three constraints: the demand for its product, the production function, and the supply of its inputs. When the firm successfully deals with these constraints, it makes a profit.

These readings explore the assumption that firms maximize profits, pointing out some of the ambiguities of this assumption. It then explores how the rules of maximization apply to the firm. It considers two ways in which the maximization principle can be used: to determine the proper levels of inputs or to determine the proper level of output. The first leads to the rule that marginal resource cost should equal marginal revenue product, and the second to the rule that marginal cost should equal marginal revenue. The readings show that these two rules are equivalent and simply represented different ways of using the information from the three constraints that a firm faces.

Much of this material is quite technical, but it is at the core of microeconomics. The unit closes with a section that shows how this theory can help critique proposals that sound good, but that are flawed because they ignore the theory developed in this unit.