Logistics System Management Based on Demand Forecasting

Abstract

Logistics management approaches in conjunction with process management principles constitute the right way of enterprise management in contemporary fully globalized business market environment when it’s placed emphasis on competitiveness increase, long – term sustainable growth and living environment protection. As a result of globalization trend of business, huge flows streaming across supply chains regardless of industry nature. It affects companies supply chains and their inner logistics chains hence the companies should apply logistics and process management principles for their planning, management and control business activities. If the companies want to be competitive, they should have well-developed logistics management system across their whole supply chains and also within the scope of their inner logistics chains. The main logistics sub-systems of general logistics system of an industrial company are purchasing, production, warehousing, packaging, distribution and reverse material flow management, thus the basic functional company’s parts. Nowadays it’s turning out that the right managerial decisions, at any functional part of a company, should be based on accurate demand forecast. Demand pattern drives all logistics activities in a supply chain and it’s therefore crucial for effective process management of company’s logistics system. To set required logistics or supply chain indicators of integrated logistics system of a company and subsequent processes of logistics planning and management should be based on accurate demand forecasts without questions. Therefore demand forecasting sub-system can be taken as further and essential element of complex company’s logistics management system.