Logistics Supply Chain Management Module 4.2.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

3. Gaining Competitive Advantage A firm can gain competitive advantage only when it performs its strategically important activities (designing, producing, marketing delivering and supporting its product) more cheaply or better than its competitors . The base for success in the marketplace revolves around the 3 C’s: Customer Company Competitor Successful companies either have a productivity advantage or a value advantage over their competitors. Logistics and Supply Chain Management 3

4. Gaining Competitive Advantage Productivity Advantage: logistics management can provide many ways to increase efficiency and productivity and hence contribute significantly to reduce unit costs. Value Advantage: Logistics if used appropriately can increase the value of a product by providing better delivery service, after sales service, financial packages, technical support and so on. Logistics activities: Primary: inbound logistics, operations, outbound logistics, marketing and sales, service. Support: infrastructure, human resource management, technology development and procurement Logistics and Supply Chain Management 4

5. Transportation Transport (in British English), or transportation (in American English), is the movement of humans, animals, and goods from one location to another. In other words, the action of transport is defined as a particular movement of a thing from a point A (a place in space) to a point B . Modes of transport include air, land (rail and road), water and pipeline. The field can be divided into infrastructure, vehicles, and operations . A transportation management system (TMS) is a subset of supply chain management concerning transportation operations. Logistics and Supply Chain Management 5

6. Logistics and Supply Chain Management 6

7. Logistics and Supply Chain Management 7

8. Transportation Functions Transportation occurs between almost every two steps or processes of the supply chain. Decisions have to be made to reduce or eliminate internal transportation while finding the optimal external transportation routes. Transportation is the operational area of logistics that geographically places inventory and is one of the most visible aspects of Logistics management. Transportation provides two basic functions: Product Movement Product storage Logistics and Supply Chain Management 8

9. Product Movement This is the primary transportation function and is the physical movement of goods to the next stage. Logistics and Supply Chain Management 9

10. Product Storage In this function the vehicles act as a temporary storage facility when required. Logistics and Supply Chain Management 10

11. Logistics and Supply Chain Management 11

12. Transportation Modes Modes of transport include air, rail, road, water, and pipelines. Each mode has its own significance depending upon the geographical location and product to be transported. Each differs in cost and time taken to transport the goods from one place to another. The relative importance of each mode can be measured in terms of system mileage, traffic volume, revenue and nature of traffic composition . Logistics and Supply Chain Management 12

13. Railways Railway operations have high fixed cost due to infrastructure but low variable cost and are capable of transferring large shipments over long distances. Railways emphasize on moving bulk inventories and heavy manufacturing. Logistics and Supply Chain Management 13

14. Roadways Roadways are the most common means of transportation and have relatively small fixed investments although variable costs are mostly high. They more suited to haul small shipments for short distances (TL, LTL). Logistics and Supply Chain Management 14

15. Airways It is the fastest mode of transportation ; however, the cost aspect could be prohibitive. Air transport capability is limited by lift capacity and aircraft availability and while the fixed cost is low, the variable cost is extremely high. Logistics and Supply Chain Management 15

16. Waterways The oldest mode of transportation and is capable of moving extremely large shipments. Types: Deep water vessels and barges. Intermediate fixed costs and low variable costs but slow speeds. Logistics and Supply Chain Management 16

17. Pipelines Used for transport of water, petroleum and other fluids and gases . Round the clock working and highest fixed cost and lowest variable cost. Disadvantage: not flexible and limited in types of commodities. Logistics and Supply Chain Management 17

18. Inbound Logistics Inbound logistics is the way materials and other goods are brought into a company. This process includes the steps to order, receive, store, transport and manage incoming supplies. Inbound logistics focuses on the supply part of the supply-demand equation. Logistics and Supply Chain Management 18

19. Outbound Logistics Outbound logistics focuses on the demand side of the supply-demand equation. The process involves storing and moving goods to the customer or end user. The steps include order fulfillment, packing, shipping, delivery and customer service related to delivery. Logistics and Supply Chain Management 19

20. Intermodal Transportation Intermodal transport refers to freight moving from a point A to a point B using several means of transport. Each of these means of transport is associated with a unique supplier and thus individual contracts . Several transporters join forces in completing this task within a same itinerary, yet using different transport methods: train, plane, truck and barge for instance . Intermodal Rail – Road Transport : The supply chain will provide customers with preferential transport methods for long distances - such as trains, planes or boats. Then, a truck will finish conveying the goods from the port or station to the final destination. Logistics and Supply Chain Management 20

21. Logistics and Supply Chain Management 21

22. Intermodal Transportation Advantages: Cost reductions Big capacity Visibility Reliability Environmentally friendly Disadvantages Intermodal Transits Blocking and Bracing requirements Restrictions and Prohibitions Weight Not the Best Option for Small Shipments Logistics and Supply Chain Management 22

23. Transportation Cost Transportation costs are all the expenses related to the transportation of raw materials, finished products, and employees. It's the money behind making sure all moving parts get where they need to be so your customers get their product or service on time. Logistics and Supply Chain Management 23

24. Logistics and Supply Chain Management 24