II. Reading Comprehension

1. Read and translate the following text. Use a dictionary if necessary.

LOGISTICS

Logistics means having the right thing, at the right place, at the right time.

Logistics has seen a revolution in recent years, becoming a topic of critical importance in business today. Demands for cost reduction and service improvement, as well as freight traffic and transportation management services have demonstrated that superior management of materials function is vital to the survival of a firm. Logistics lies at the heart of the great changes sweeping through today’s business environment. The competitive pressures for higher quality, quicker response time, superior service, and total customization can only be met through more intelligently run material management. This subject is about the fundamental essence of a firm - how its services are delivered to customers. It involves such tactical issues as daily order scheduling, statistical quality and quantity control, and inventory control.

As the variety of products increases, the problems of forecasting, purchasing, stocking, and distribution increase exponentially. While demand for an entire product line is forecast able with some accuracy, individual item demands vary widely. The more items in the product line, the more difficult is the forecasting, purchasing, and distribution.

Logistics has become so important in the order fulfillment process that the functions it encompasses have increased and its hierarchical position in the organization has been raised.

Meanwhile, there is wide divergence of opinion about many aspects of logistics: where the function should be placed, what its responsibilities are, and whether it should be centralized or decentralized. While the final choice must always relate to the needs of the specific firm in question, the high cost of materials equates the material management function with the main functions of the organization. A partial organization chart reflects the place of logistics.

Exhibit 1.

Organization Chart Showing Logistics Functions

G eneral Management

Staff

Finance and Administration

Marketing

Manufacturing

Logistics

Engineering and Research

- Purchasing

- Traffic

- Warehousing

Production Planning and Control

- Production Planning and Control

- Data Processing

- Customer Service

Note the peculiar position of production planning and control. This area is crucial to manufacturing. As such, it may be assigned organizationally to logistics, but functionally to manufacturing, and physically located in the manufacturing area. To sum up everything written above, logistics is the process of planning, implementing, and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of meeting customer requirements.

2. Answer the following comprehension questions:

1.	What is logistics?
2.	How business environment necessitated the appearance of logistics as a science?
3.	What functions does logistics encompass?
4.	Does the significance of logistics in a company’s structure increase or weaken nowadays?
5.	Which key words can you name to describe logistics?
6.	What is the place of logistics in a company’s organization? Who is responsible for materials management?

When you have answered the questions, find a partner in your group. Compare your answers and swap the information.