Logistics and Procurement Strategies in Supply Chain Management

This presentation covers the importance and use of logistics in supply chain management, effectiveness of procurement strategies and procedures, factors that improve procurement strategies, and the role of LIFO and FIFO inventory control and just-in-time system. A case study of Tesco is included.

Supply Chain and
Operations Management

Table of contents
Introduction
Importance and use of logistics in supply chain management
Effectiveness of the procurement strategies and procedures
Factors that can improve logistics and procurement strategies
Design effective and economic order quantity for procurements
Role of principles of LIFO and FIFO in inventory control
Just-in -time system of inventory control
Conclusion
References

Introduction
 The presentation covers the importance and sue of
logistics in the supply chain management , effectiveness
of the procurements strategies and procedures and factors
that improve the procurement strategies.
 Role of LIFO and FIFO inventory control and evaluation
of just in time systems in Tesco.

Importance and use of logistics in supply chain
management
 Tesco is one of the leading British multinational brand dealing in groceries
headquartered in England and is the third largest retailer in the world.
 The supply chain department of Tesco is responsible for managing the flow of goods
in the company. Logistics plays a very major role in managing the storage of all variety
of inventory.
 It is necessary for the company to provide large storage options for the products they
are caring. The logistics ensure that the rights good are picked and is delivered to the
correct destination

Effectiveness of the procurement strategies and
procedures
 An effective procurement strategy involves is financial plan that
helps in the management of the budget, workflows and timeline of
the Tesco .
 It helps in effectively aligning the activities with the objectives of
the business. It helps the company to keep the cash flows smooth
and proper.
 It is very necessary for the company while creating strategy to
consider the current position of the company , regulations ,
stakeholders-buy-in , market conditions and also the goals of the
company.

Factors that can improve logistics and
procurement strategies
 Proper planning
 Efficient transportation system
 Warehouse management system

Design effective and economic order quantity for
procurements
 Economic order quantity refers to the minimum order quantity that company should purchase in
order to minimize the cost of inventory which includes holding cost , shortage and order costs.
 The formula of EOQ is applied in such circumstances where the demand , ordering and holding
costs remains constant.
 Q= EOQ units
 D= Demand in units
 S= Order cost
 H= Holding cost

Role of principles of LIFO and FIFO in
inventory control
 LIFO stands for Last in first out and this method that is used to account the inventory
that keeps the record of the items that was currently purchased and sold first.
 The LIFO method is governed by the generally accepted accounting principles.
 This method is used while calculating the cost of goods sold when the cost in producing
the inventory is increasing.
 FIFO stands for first in , first out refers to the accounting method in which the assets
produced are sold first , used of disposed.
 This method is used for the cost flow assumption purpose. This method assumes that
the old products of the company has been sold first and cost that is paid for the old
products are applied in the calculation of the inventory.

Just-in -time system of inventory control
 Just in time(JIT) refers to the inventory management method in
which the goods are received by the supplier only when they are in
demand.
 The main purpose of using this inventory by the company is that it
results into eliminating the holding cots of inventory and
increases the inventory turnover.
 In order to apply this method , it requires proper planning regarding
the supply chain and application of advanced software which helps
in increasing the efficiency and eliminate the risk of errors.

CONCLUSION
 From the above presentation it can be concluded that it is very important for the
company to have effective logistics and procurement in their supply chain management
as it helps in easy transportation of goods form the warehouse to the correct destination.
 The report also summarize about the LIFO and FIFO method while calculating the cost
of inventory.

REFERENCES
 Akbari, M. and Do, T.N.A., 2021. A systematic review of machine learning in logistics and supply
chain management: current trends and future directions. Benchmarking: An International Journal.
 Masudin, et.al, 2018. Impact of inventory management and procurement practices on
organization's performance. Singaporean Journal of Business Economics and Management Studies
(SJBEM). 6(3). pp.32-39.
 Teixeira, et.al, 2018. The contribution of green logistics and sustainable purchasing for green
supply chain management. Independent Journal of Management & Production. 9(3). pp.1002-1026.
