Unit A_Introduction to Logistics_Topic 1.pdf

the doc gives an insight about logistic management

1. Introduction to
Logistics
Unit A

2. Topic 1 -Introduction to Logistics

3. Objectives
▪Define logistics
▪Understand the inter-relation between supply chain and logistics
▪State the objectives of logistics management
▪Explain the 7Rs of logistics management
▪Discuss the 5Ps of logistics management
▪Describe logistics cost.
After the completion of this module the participants will be able to:
LEARNING OBJECTIVES

4. Go through this video and let’s discuss what logistics is all about…
AN EXAMPLE

5. Dabbawala picks up the
home cooked food from
various houses in a locality in
the morning.
Each Dabba (Tiffin) is then
color coded that indicates the
name of the owner and
destination.
Dabbawala brings all the
Dabbas to a sorting place
where they are grouped by
destination.
The grouped Dabbas are
moved to the local Railway
Station.
The Dabbas are then loaded &
transported in a local train,
depending on the destination.
The Dabbas are unloaded at
respective railway stations.
The unloaded Dabbas are
further segregated by office
complexes or clusters.
Finally, the Tiffin are delivered in
the respective offices before
lunch time.
AN EXAMPLE

6. Discussion Zone…
What you have observed here?
What Logistics is all about?
Now can you define the term?
LOGISTICS

7. ‘Logistics is visible all around’
LOGISTICS

8. In general point of view logistics means having the right thing at the right place
and at the right time.
IfweborrowthewordsofHelsinki,logisticsis,abusinessplanningframeworkforthe
management ofmaterial,service,informationandcapitalflows.Itincludesthe
complexinformation,communicationandcontrolsystemsrequiredintoday'sbusiness
environment.
LOGISTICS DEFINITION

9. Inbound Logistics:
Movement of materials from the point of origin to point of production. other names
physical supply , upstream
Outbound Logistics:
Movement of finished goods from the point of production to the point of
consumption. other names physicaldistribution, Down stream
Reverse Logistics:
Movement of damaged, expired, unsold products from the point of
consumption to the point of production
It is the Flow of...
Product Information Fund
LOGISTICS PHASES

10. Logisticsmanagement isthatpartofsupplychainmanagement thatplans,implements,
andcontrolstheefficient,effectiveforwardandreversesflowandstorageofgoods,
servicesandrelatedinformationbetweenthepointoforiginandthepointof
consumptioninordertomeetcustomers'requirements.
Logistics management may involves;
oSelecting appropriate vendors with the ability to provide transportation facilities
oChoosing the most effective routes for transportation
oDiscovering the most competent delivery method
oUsing software and IT resources to proficiently handle related processes
LOGISTICS MANAGEMENT

11. UNDERSTANDING INTER-RELATION
BETWEEN SUPPLY CHAIN & LOGISTICS

12. oLogisticsistypicallyconsideredasub-setofSCM.
oInSCM,therearefivekeyfunctions:Procure,Make,Move,Store,andService.
oMostviewLogisticsasthemovementofproductsfrompointAtopointBandallthe
activitiesinvolvedtomakethishappen(fromcarrierselectiontoplanningto
execution).
Logistics as facilitating Functions in SCM
LOGISTICS & SCM

13. Logisticsisinvolvedatvariousstagesofasupplychain;fromsuppliertoplants,from
plantstodistributioncentres,fromdistributionscentrestostores,fromstorestocustomers,
oranyofthesecombinations.
LOGISTICS & SCM

14. ProductionProcurement
SCM
Movement Store Service
Logistics
Facilitating Functions Like transportation, material handling, warehousing,
Packaging, communication etc.
LOGISTICS & SCM

15. ▪Sourcing and
Procurement
▪ Manufacturing
▪ Coordination and
Collaboration
▪ Integration of
Supply and
Demand
Management
SUPPLY CHAIN
MANAGEMENT
▪ Inventory
Management
▪ Inbound and
Outbound
Transportation
▪ Materials Handling
▪ Packaging
▪ Communication
▪ Warehousing
▪ Supply and Demand
Planning
▪ Data Analysis
LOGISTICS
MANAGEMENT
DIFFERENCE BETWEEN LOGISTICS
& SCM

16. OBJECTIVES OF LOGISTICS

17. Logistician’s
point of view
Manufacturer’s
point of view
Objectives
of Logistics
Customer’s
point of view
OBJECTIVES OF LOGISTICS

18. Planning and
routing of
transportation
Reducing the
inventory cost
Better
combination of
Multimodal
transportation
Eliminate
warehousing
charges
Scheduling of
materials flow in
manufacturing
process
OBJECTIVES OF LOGISTICS
Manufactures
point of view
Reduction of
Transportation
cost
(raw material)

19. Multimodalcargotransportationisthemovementofcargousingmorethanone
modeoftransportationinacontinuous,seamlessjourney,underonecontract,using
oneconsignmentdocument.
Afterthegoodsareloadedina“multimodalequipment”atthebeginningofthe
journey,theytravelacrossmultipletransportmodes(motor,rail,waterandair)
withoutanyfurtherhandlingofthegoodsinsideuntilthegoodsreachtheintended
destination
MULTI-MODEL TRANSPORTATION

20. Rendering better
service to their
clients
Reducing the
transportation
cost in order to
satisfy their
clients
Acting as
representatives
for the traders
in international
trade
Customer
Retention
Logistician’s
point of view
Scheduling the
transportation
modes for
better time
management
OBJECTIVES OF LOGISTICS

21. Objectives of Logistics
Customer’s point of view
Perfect stock
maintenance
Timely delivery
Low cost
distribution,
thus lower
selling price
OBJECTIVES OF LOGISTICS

22. 7 RS OF LOGISTICS

23. Right ConditionRight Quantity
7R’s of Logistics
Right Place Right Product
Right Consumer Right Cost Right Time
7 RS OF LOGISTICS

24. Quality Cost
Delivery
Issues
Ingeneralcontext,therightproductisademand-drivenconceptthatcanbeloosely
definedasaproductwithfeaturesandfunctionsthatmeetacustomer'sneeds.In
Operationalsenseitshouldmakesurethat:
▪theproductisgenuineand
▪theproductwasdeliveredthroughitsauthorizeddistributionchannel.
RIGHT PRODUCT

25. Control
systems
Monitor
initiating
and
destined
location
Distribution
system
Customer destination
–New York
Consignment destination
▪-Sydney
It implies the product should get to the place where the customer exactly requires it. It
requires good control and monitor systems to track the order.
RIGHT PLACE

26. oThisistheamountofstockneedstobekeptin
thestoresoastosatisfythecustomerneedsas
andwhenheneedsit.
oIncaseofretailoutlettheamountofstockmay
bedeterminedbytheamountofcustomerpick
up.
oThequantitymayvarydependingonthenature
oftheproductandbusiness.Forinstanceifthe
productisofperishablenaturethestockwillbe
restricted.
RIGHT QUANTITY

27. oThe product must be usable right from the time it is consumed till the end of its life cycle
A transistor must last the
lifetime of a radio
A magazine should not
be torn or damp
RIGHT CONDITION

28. oIf a customer expects a delivery at a certain
time, he will endeavor to facilitate delivery
oCompanies operating on JIT (Just In Time)
philosophy, will severely hamper production if not
delivered on time
RIGHT TIME

29. oA company may manufacture a product in a
standard format and expect different packaging
for various intended customers
oEvery right package should reach the right
customer
RIGHT CUSTOMER

30. oRight cost is the lowest cost associated with achieving all the other
aspects of logistics. These involves:
RIGHT COST

31. 5 PS OF LOGISTICS

32. Price
Product
Promotion
Place or Physical Distribution
Production
5 PS OF LOGISTICS

33. oCostsavingsusinganeffectivelogisticsoperationcanbeusedto
maketheproductmorecompetitive.
oPricediscountscanbeofferedforbulkdeliveriesandnegotiations
canbemadewithsuppliers.
PRICE

34. oTheproductproducedhasphysicalcharacteristics.
oLogisticsandmarketingmustworktogetherinordertohave
competitivepackagingcost.
oPackagingsizeshouldbeappropriateforstandardsize
pallets.
oMultipurposepackagingisanothercosteffectivewayto
reducepackaging.
PRODUCT

35. oLogisticsmustworkwithmarketingandadapttovariouspromotionalstrategies
beingfollowed–pushorpull.
oFromalogisticspointofview,apushstrategyiseasiertoplanasthepullstrategy
hasvaryingdemandpatterns,whichresultsinahigherinventorytocaterto
uncertainties
Push-Pull Boundary
Push strategy Pull strategy
Low Uncertainty High Uncertainty
Customers
Suppliers
PROMOTION

36. oIt refers to the distribution channels’ decision with respect to use of
warehouse, mode of transportation, how to use the transport etc.
5 Ps of Logistics
PLACE OR PHYSICAL DISTRIBUTION

37. LOGISTICS COST

38. 13
%
9
%
10
%
11
%
India accounts for a higher logistics cost than most of the
developed countries
LOGISTICS COST

39. Production
CostCost of
Raw
Materials
Inventory
Cost
Transportatio
n Cost
Packaging
Cost
Point of Origin
Point of
Consumption
FACTORS CONTRIBUTING TO
LOGISTICS COST

40. Main components of total logistics concept are:
Total cost
perspective
Understanding
of relevant
trade-offs
Zero sub-
optimization
System
perspective
LOGISTICS COST

41. Cost of logistics means cost of performing various logistics activities including
cost of planning and managing a range of logistics activities
Transportation cost + Facilities cost +
Communication cost + Inventory cost +
Protective packaging cost + Distribution
cost
Total Logistics Cost =
TOTAL COST PERSPECTIVE

42. oIfsimplyput,Tradeoffmeanslosingsomethingforgaining
something.
oThisisasituationthatinvolveslosingonequalityoraspect
ofsomethinginreturnforgaininganotherqualityor
aspect.
oMorecolloquially,ifonethingincreases,someotherthing
mustdecrease.
Lose
Gain
TRADE OFFS

43. Logistics System alternatives
Fewwarehouse,
PremiumTransport
Manywarehouses,
Low–CostTransport
TRADE OFFS BETWEEN TRANSPORT
COST & WAREHOUSING COST

44. ZeroSub-optimizationisaconditioninwhichthemanagerofeachphysical
distributionfunctionattemptstominimizethecostbutduetoimpactofone
physicaldistributiontaskontheothers,theresultsarelessthanoptimum
Logistics Cost
ZERO SUB-OPTIMIZATION

45. oSystem perspective concept is an extension of logistics concept and is the key
to managing the logistics function
oIt deals with establishment of channel partnership and strategic alliances so as
to streamline the logistics system
ManufacturerSupplier Distributor Retailer
Logistics Cost
SYSTEMS PERSPECTIVE

46. Warehouse
Management System
Planning and
Forecasting System
ERP
MHE
Other Logistics
Execution System
Other users in
the
organization
Exchanges
Warehouse
Users
Suppliers &
Customers
SYSTEMS PERSPECTIVE

47. Transportation
Material Handling
Order Processing
Inventory Control
Warehousing
Packaging
Management
attempts to minimize
the cost of using the
components taken as
a whole
TC Approach
Management views
logistics as a system
of inter-related
components
Systems Approach
Logistics Management Overview
SYSTEMS PERSPECTIVE

48. Video: Understanding Logistics

49. THANK
YOU

50. oS.Sudalaimuthu, S.Anthony Raj, Eastern Economy Edition, 2009 PHI, Logistics
Management for International Business
oS.K. Bhattacharya, S.Chand, Logistics Management –Definition, Dimension and
Functional Applications
oJ.R. Tony Arnold, Stephen N.Chapman, Llyod M.Clive, Pearson, Sixth Edition,
Introduction to Materials Management
ohttp://www.beckmanmarketing8e.nelson.com/ppt/chapter17.pps
BIBLIOGRAPHY