LOGISTICS ORGANIZATION

Organization
Organizational Design

• Structure
• Job Description
• System Operating Procedures
 Dimension of Organization
Design
• Centralization
The locus of decision making authority along the vertical
dimension

• Formalization
Explicitness of expectation regarding work means and
production

• Complexity
Number of different components or sub system in an organization

• Configuration
The shape of organization: Number of level and span of control
 Configuration
(Number of Level)
Mechanisms of Vertical
Integration
1 1 - Centralization
- Formalization

2 2A 2B 2C 2D 2C
Vertical Complexity
Horizontal Complexity
(Differentiation)
(Differentiation)

3 3A 3B 3C

Configuration
Span of Control
(Horizontal Integration)
 Form of Design

• Simple Design
• Functional Design
• Divisional Design
• Conglomerate Design
• Hybrid Design
 Basic Component
• Top Management
• Middle Management
• Operational Services
• Technical Support Staff
• Administrative Support Staff
Hybrid Structure

Top

T
e
c A
h d
n m
I i
c n
a
l Middle

Operational Services
Characteristics

SMART
• Service Oriented
• Manageable
• Agile
• Result Based
• Traceable
 Consideration
• Objectives
• Type and Number of Activities
• Resources
• Management
 Job Description
• Function
• Responsibility
• Task
• Qualification
 SOP
• Mechanism of interaction among jobs
• Reflect authority and decision rule
• Guideance for action
 Task and Responsibility Matrix
• Describe the authority and role for each
job in doing project activity
• Process
• Decision/Approval
• Support
• Information
• Reflect the interaction among jobs
 TRM
Activity Organization Unit
Director Manager Inventory Warehousing Transport

Tender R P S S S

Procurement A R P P I

Change
Order

Payment

Monev I S R I P
Logistics
Manager

Order Entry
Processing

Inventory

Warehousing

Transportation
 Logistics Organizational
Development Cycle

Frag-
Mented
Func- Process Functional Integration
Functional Groupings
Tional Process Information Integration
Struc-
ture

Fragmented Functional Aggregation Process Integration

Achieving An Integrated Supply
Chain
Stage one: Base Line

Material Customer
Flow Service
Material
Material
Purchasing
Purchasing Production
Production Sales Distribution
Sales Distribution
Control
Control
Achieving An Integrated Supply
Chain
Stage two: Functional Integration

Material Customer
Flow Service
Materials
Materials Manufacturing
Manufacturing Distribution
Distribution
Management Management
Management Management
Achieving An Integrated Supply
Chain
Stage three: Internal Integration

Material Customer
Flow Service
Materials
Materials Manufacturing
Manufacturing
Management Management
Distribution
Distribution
Management Management
Achieving An Integrated Supply
Chain
Stage four: External Integration
(Total Supply Chain Management)

Material Customer
Flow Service
Suppliers Internal
Internal
Suppliers Customers
Customers
Supply Chain
Supply Chain