Unit A_Introduction to Logistics_Topic 1.pdf
- 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. If we borrow the words of Helsinki, logistics is, a business planning frame work for the management of material, service, information and capital flows. It includes the complex information, communication and control systems required in today's business 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 physical distribution, 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. Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. Logistics management may involves; o Selecting appropriate vendors with the ability to provide transportation facilities o Choosing the most effective routes for transportation o Discovering the most competent delivery method o Using software and IT resources to proficiently handle related processes LOGISTICS MANAGEMENT
- 11. UNDERSTANDING INTER-RELATION BETWEEN SUPPLY CHAIN & LOGISTICS
- 12. o Logistics is typically considered a sub-set of SCM. o In SCM, there are five key functions: Procure, Make, Move, Store, and Service. o Most view Logistics as the movement of products from point A to point B and all the activities involved to make this happen (from carrier selection to planning to execution). Logistics as facilitating Functions in SCM LOGISTICS & SCM
- 13. Logistics is involved at various stages of a supply chain; from supplier to plants, from plants to distribution centres, from distributions centres to stores, from stores to customers, or any of these combinations. LOGISTICS & SCM
- 14. Production Procurement 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
- 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. Multimodal cargo transportation is the movement of cargo using more than one mode of transportation in a continuous, seamless journey, under one contract, using one consignment document. After the goods are loaded in a “multimodal equipment” at the beginning of the journey, they travel across multiple transport modes (motor, rail, water and air) without any further handling of the goods inside until the goods reach the intended 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 Condition Right Quantity 7R’s of Logistics Right Place Right Product Right Consumer Right Cost Right Time 7 RS OF LOGISTICS
- 24. Quality Cost Delivery Issues In general context, the right product is a demand-driven concept that can be loosely defined as a product with features and functions that meet a customer's needs. In Operational sense it should make sure that: ▪ the product is genuine and ▪ the product was delivered through its authorized distribution channel. 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. o This is the amount of stock needs to be kept in the store so as to satisfy the customer needs as and when he needs it. o In case of retail outlet the amount of stock may be determined by the amount of customer pick up. o The quantity may vary depending on the nature of the product and business. For instance if the product is of perishable nature the stock will be restricted. RIGHT QUANTITY
- 27. o The 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. o If a customer expects a delivery at a certain time, he will endeavor to facilitate delivery o Companies operating on JIT (Just In Time) philosophy, will severely hamper production if not delivered on time RIGHT TIME
- 29. o A company may manufacture a product in a standard format and expect different packaging for various intended customers o Every right package should reach the right customer RIGHT CUSTOMER
- 30. o Right 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. o Cost savings using an effective logistics operation can be used to make the product more competitive. o Price discounts can be offered for bulk deliveries and negotiations can be made with suppliers. PRICE
- 34. o The product produced has physical characteristics. o Logistics and marketing must work together in order to have competitive packaging cost. o Packaging size should be appropriate for standard size pallets. o Multipurpose packaging is another cost effective way to reduce packaging. PRODUCT
- 35. o Logistics must work with marketing and adapt to various promotional strategies being followed – push or pull. o From a logistics point of view, a push strategy is easier to plan as the pull strategy has varying demand patterns, which results in a higher inventory to cater to uncertainties Push-Pull Boundary Push strategy Pull strategy Low Uncertainty High Uncertainty Customers Suppliers PROMOTION
- 36. o It 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 Cost Cost 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. o If simply put, Trade off means losing something for gaining something. o This is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect. o More colloquially, if one thing increases, some other thing must decrease. Lose Gain TRADE OFFS
- 43. Logistics System alternatives Few warehouse, Premium Transport Many warehouses, Low –Cost Transport TRADE OFFS BETWEEN TRANSPORT COST & WAREHOUSING COST
- 44. Zero Sub-optimization is a condition in which the manager of each physical distribution function attempts to minimize the cost but due to impact of one physical distribution task on the others, the results are less than optimum Logistics Cost ZERO SUB-OPTIMIZATION
- 45. o System perspective concept is an extension of logistics concept and is the key to managing the logistics function o It deals with establishment of channel partnership and strategic alliances so as to streamline the logistics system Manufacturer Supplier 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
- 49. THANK YOU
- 50. o S.Sudalaimuthu, S.Anthony Raj, Eastern Economy Edition, 2009 PHI, Logistics Management for International Business o S.K. Bhattacharya, S.Chand, Logistics Management – Definition, Dimension and Functional Applications o J.R. Tony Arnold, Stephen N.Chapman, Llyod M.Clive, Pearson, Sixth Edition, Introduction to Materials Management o http://www.beckmanmarketing8e.nelson.com/ppt/chapter17.pps BIBLIOGRAPHY