P’s and R’s of Logistics Management

In the quest to provide quality service and satisfy customers, world-class companies along the supply chain are guided by the Seven Rights of Fulfillment.

• The Right Product
• To the Right Customer
• At the Right Time
• At the Right Place
• In the Right Condition
• In the Right Quantity
• At the Right Cost

Logistics provide a link between two primarily functions in a manufacturing organization – Marketing & Operations and the following 5P structure helps in deciding on the fundamentals for a sustainable efficiency in the system.

• Product: The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc.
• Price: Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.
• Promotion: Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Promotion decisions involve advertising, public relations, media types, etc.
• People: People decisions are those related to customer service. The function of people to present an appearance, an attitude, etc
• Place: Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service.