Text 1. Logistics and Supporting Operations

1. Make sure you know the following words and word combinations.

Logistics, manufacturer, supplier, customer; deliver, storage, dairy, shopping mall, intangible, warranty, insurance, input, chef.

2. Read the text and do the tasks that follow.

All organizations move materials. Manufacturers build factories that collect raw materials from suppliers and deliver finished goods to customers; retail shops have regular deliveries from wholesalers; a television news service collects reports from around the world and delivers them to viewers; most of us live in towns and cities and eat food brought in from the country; when you order a book or DVD from a website, a courier delivers it to your door. Every time you buy, rent, lease, hire or borrow anything at all, someone has to make sure that all the parts are brought together and delivered to your door. Logistics is the function that is responsible for this movement. It is responsible for the transport and storage of materials on their journey between suppliers and customers.

On a national scale, logistics involves a huge amount of effort. The USA has a gross domestic product (GDP) of US$10 trillion, so its population of 280 million produces and consumes an average of US$36,000 of goods and services. The world's seven largest economies (USA, Japan, Germany, UK, France, Italy and Canada) have a combined GDP of US$20 trillion. All of this – whether it is oil produced in Canada, consumer electronics in Japan, cars in the UK or dairy products in France – relies on logistics to collect materials from suppliers and deliver them to customers. Millions of people are involved in this effort, and it costs billions of dollars a year to keep everything moving.

Ordinarily we only notice a small part of logistics. We might see lorries driving down a motorway, visit a shopping mall, drive through a trading estate, or have a parcel delivered to our homes. These are the visible signs of a huge industry. In this booklet you will get a more detailed look at this complex function. We are going to discuss these issues and developments, and see how managers can get the best results from their logistics.

Every organization delivers productsto its customers. Traditionally we describe these products as either goods or services. Then manufacturers like Sony and Guinness make tangible goods, while AOL and Vodafone provide intangible services. In reality, this view is rather misleading, and every product is really a complex package that contains both goods and services. Ford, for example, manufacture cars, but they also give services through warranties, after-sales service, repairs and finance packages. McDonald's provide a combination of goods (burgers, cutlery, packaging, and so on) and services (when they sell food and look after the restaurant).

At one end of this spectrum are products that are predominantly goods, such as cars and domestic appliances; at the other end are products that are predominantly services, such as insurance and education. In the middle are products with a more even balance, such as restaurant meals and hospitals.

At the heart of an organization are the operationsthat create and deliver the products. These operations take a variety of inputs and convert them into desired outputs. The inputs include raw materials, components, people, equipment, information, money and other resources. Operations include manufacturing, serving, transporting, selling, training, and so on. The main outputs are goods and services. The ‘Golden Lion’ restaurant, for example, takes inputs of food, chefs, kitchen, waiters, and dining area; its operations include food preparation, cooking and serving; the main outputs are meals, service, customer satisfaction, and so on.

The products created by an organization are passed to its customers, making the cycle. This shows customers’ generating demands, with operations using resources to make products that satisfy them. Logistics moves materials around this cycle. The operations are usually divided into a number of related parts, in the way that a hospital has an emergency room, surgical ward, purchasing department, heart unit, operating theatre and so on. So, logistics also moves materials through the different parts of an organization, collecting from internal suppliers and delivering to internal customers. This leads to our basic definition:

Logistics is the function responsible for the flow of materials from suppliers into an organization, through operations within the organization, and then out to customers.

3. Scan the text to find the English equivalents to the following collocations.

Доставлять продукты, материальные товары, сложный пакет, производить легковые автомобили, послепродажное обслуживание, бытовые приборы, превращать в желаемую продукцию, приготовление пищи, приемный покой, операционная, отечественные потребители, движение материалов.

4. Answer the questions.

1. What functions does logistics perform? 2. Logistics involves a great mount of effort, doesn’t it? 3. What countries represent the world’s largest economies? 4. What is their combined GDP? 5. What are the visible signs of logistics? 6. In what terms are products usually described? 7. To your mind, is this view misleading? 8. What is the other division of products? 9. What kind of operations make the core of any organization? 10. What do inputs include? Give examples. 11. What is a product cycle? 12. What is logistics in terms of a product cycle?

5. Match the words with their definitions.

1. supplier a) the act of keeping or putting something in a place while it is not being used, or the lace used for this

2. customer b) an area just outside a city or town where there are small factories and businesses

3. gross domestic product c) a person who buys goods, products, and services for their own use, not for business use or resell

4. manager d) a company that provides a particular type of product

5. shopping mall e) things that are produced in order to be used or sold

6. storage f) the growth or improvement in something, so that it becomes bigger or more advanced

7. consumer g) a person or organization that buys goods or services from a shop or company

8. retail shop h) someone whose job is to manage all or part of a company or organization, or a particular activity

9. goods i) the sale of goods to customers for their own use, rather than to shops

10. trading estate j) a large area where there are lots of shops, usually a covered area where cars cannot go

11. development k) the total value of goods and services produced in a country’s economy, not including income from abroad

6. Expand on the following statements from the text.

1. Traditionally products are described as goods and services. 2. The idea of dividing all products into either goods or services is rather misleading. 3. Any organization’s work is centred on creating and delivering products. 4. The products created by an organization are passed to its customers. 5. Logistics moves material through the different parts of an organization.

7. Work in pairs. Speak about logistics and its supporting operations using the following procedure.

● Before you speak, plan what you are going to say and select words and phrases you have studied so far in this text.

● Speak for about a minute.

● When you are listening to your partner’s talk, think of questions to ask at the end of it.

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