Logistics Supply Chain Management Module 4.1.pptx

Logistics Supply Chain

1. Logistics Management and Outsourcing Module 4 MEC702 Logistics and Supply Chain Management Logistics and Supply Chain Management 1

2. Syllabus Evolution, Objectives, Components and Functions of Logistics Management, Distribution related Issues and Challenges; Gaining competitive advantage through Logistics Management, Transportation - Functions, Costs, and Mode; Network and Decision, Containerization, Cross docking. Warehousing : Concept and types, Warehousing strategy, Warehouse facility location & network design Part Packaging , Use of Returnable pallets, ASN – Advance Shipment Notification . Reverse logistics: Outsourcing - Nature and concept, Strategic decision to Outsourcing, Third party logistics(3PL), Fourth party logistics(4PL), Cold chain operations in Supply chain. Logistics and Supply Chain Management 2 Reference: Supply Chain Management: Concepts and Cases by Rahul V. Altekar

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4. Definition Logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations. In military science , logistics is concerned with maintaining army supply lines while disrupting those of the enemy, since an armed force without resources and transportation is defenseless . Logistics management is the part of supply chain management and supply chain engineering that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and point of consumption to meet customers' requirements. Logistics and Supply Chain Management 4

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6. Logistics The term logistics is attested in English from 1846 , and is from French: logistique , where it was either coined or popularized by Swiss military officer and writer Antoine-Henri Jomini , who defined it in his Summary of the Art of War. Jomini originally defined logistics as , the art of well-ordering the functionings of an army, of well combining the order of troops in columns, the times of their departure, their itinerary, the means of communication necessary to assure their arrival at a named point. The Oxford English Dictionary defines logistics as " the branch of military science relating to procuring, maintaining and transporting material, personnel and facilities ". Logistics and Supply Chain Management 6

7. Logistics and Supply Chain Management 7 Evolution of Logistics

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9. Objectives of Logistics Management Improve Supply Chain Efficiency Inventory Management Fulfil customer requirements Mitigate product damage Reduce Operational Cost Quick Response Optimize delivery performance Efficient Flow of Information Quality Assurance Reduce Carbon Footprint Logistics and Supply Chain Management 9

10. Components of Logistics Management Planning: storage, warehousing, and materials handling Packaging and utilization Inventory control Transportation Information and control Logistics and Supply Chain Management 10

11. Functions / Elements of Logistics Order processing Inventory control Warehousing Transportation Material handling and storage system Logistical packaging Information (location/ Customer service) Logistics and Supply Chain Management 11

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13. Logistics and Supply Chain Management 13 LOGISTICAL PACKAGING

14. Distribution Management Distribution management is the process used to oversee the movement of goods from supplier to manufacturer to wholesaler or retailer and finally to the end consumer. Numerous activities and processes are involved, including raw good vendor management, packaging, warehousing, inventory, supply chain, logistics and sometimes even block-chain. Distribution is a management system within logistics that is focused on order fulfillment throughout distribution channels. A distribution channel is the chain of agents and entities that a product or service moves through on its way from its point of origin to a consumer. Logistics and Supply Chain Management 14

15. Distribution Management A distributor is an entity that supplies products to retailers and other businesses that sell directly to consumers. For example, a pharmaceutical distributor that supplies a variety of prescription-controlled drugs to pharmacies. A distribution network is a connected group of storage facilities and transportation systems. Logistics and Supply Chain Management 15

16. Advantages of Distribution Management Delivers higher profits E liminates waste “ Just in case ” inventory D ecreased shipping charges F aster delivery to customers E nables “ one stop shopping ” Logistics and Supply Chain Management 16

17. Distribution Management Challenges Natural disruptions include severe weather events, raw material shortages (e.g. bad crop years), pest damages, and epidemics or pandemics. Human disruptions include riots, protests, wars and strikes . Transportation disruptions include transport vehicle disrepair, maintenance downtimes and accidents, as well as delayed flights and restrictive or new transportation regulations such as those regularly seen in trucking. Economic challenges include recessions, depressions, sudden drops or increases in consumer or market demands, new or changes in fees or compliance costs, changes in currency exchange values and payment issues. Product disruptions include product recalls, packaging issues and quality control issues. Buyer disruptions include order changes, shipment address changes and product returns. Logistics and Supply Chain Management 17

18. Factors That Influence Distribution Management Unit perishability – if it’s a perishable item then time is of the essence to prevent loss, Buyer purchasing habits – peaks and troughs in purchasing habits can influence distribution patterns and therefore varying distribution needs that can be predicted, Buyer requirements — e.g. changes in a retailer’s or manufacturer’s just in time inventory demands , Product mix forecasting – optimal product mixes vary according to seasons and weather or other factors and Truckload optimization – relies on logistics and fleet management software to ensure every truck is full to capacity and routed according to the most efficient path. Logistics and Supply Chain Management 18

19. Distribution Management Strategies Mass: The mass strategy aims to distribute to the mass market, e.g. to those who sell to general consumers anywhere like food, medicines etc . Selective: The selective strategy aims to distribute to a select group of sellers, e.g. only to certain types of manufacturers or retail sectors such as pharmacies, hair salons, and high-end department stores. Exclusive: The exclusive strategy aims to distribute to a highly limited group. For example, the manufacturers of Ford vehicles sell only to authorized Ford dealerships, and producers of Gucci-brand goods only sell to a narrow slice of luxury goods retailers. Logistics and Supply Chain Management 19

20. Choosing a Distribution Management System Choosing the right distribution management system for your organization depends a great deal on your organization’s distribution goals and challenges, and the distribution models and channels your company uses . Companies should evaluate: Ease of integration and compatibility with legacy systems, Scalability and elasticity, Security, Data management and analytics and Adaptability Logistics and Supply Chain Management 20

21. Channels of Distribution Wholesaler: Goods are distributed from manufacturers to wholesalers in this channel Retailer: Goods are distributed from manufacturer or wholesaler to retailers Distributor: This channel moves goods from the source or manufacturer to an authorized distributor Ecommerce: This is the newest and most disruptive distribution channel wherein goods and services are represented virtually online and then distributed directly to the buyer. Logistics and Supply Chain Management 21

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