CHAPTER - 1

INTRODUCTION

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INTRODUCTION

Logistics is generally the detailed organization and implementation of a complex operation. In a

general business sense, logistics is the management of the flow of things between the point of
origin and the point of consumption in order to meet requirements of customers or corporations.
The resources managed in logistics can include physical items such as food, materials, animals,
equipment, and liquids; as well as intangible items, such as time and information. The logistics
of physical items usually involves the integration of information flow, materials
handling, production, packaging, inventory, transportation, warehousing, and often security.

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.
Military logistics was already practiced in the ancient world and as modern military have a
significant need for logistics solutions, advanced implementations have been developed. In
military logistics, logistics officers manage how and when to move resources to the places they
are needed.

Logistics management is the part of supply chain management 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 the point of consumption in order to meet
customer's requirements. The complexity of logistics can be modeled, analyzed, visualized, and
optimized by dedicated simulation software. The minimization of the use of resources is a
common motivation in all logistics fields. A professional working in the field of logistics
management is called a logistician.

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Origin

The term logistics is attested in English from 1846, and is from French logistique, where it was
either coined or popularized by military officer and writer Antoine-Henri Jomini, who defined it
in his Summary of the Art of War (Précis de l'Art de la Guerre). The term appears in the 1830
ion, then titled Analytic Table (Tableau Analytique),[1] and Jomini explains that it is derived
from logis "lodgings" (cognate to English lodge), in the terms maréchal des logis "marshall of
lodgings" and major-général des logis "major-general of lodging":

Autrefois les officiers de l’état-major se nommaient: maréchal des logis, major-général des logis;
de là est venu le terme de logistique, qu’on emploie pour désigner ce qui se rapporte aux marches
d’une armée.

Formerly the officers of the general staff were named: marshall of lodgings, major-general of
lodgings; from there came the term of logistics [logistique], which we employ to designate those
who are in charge of the functionings of an army.

The term is cred to Jomini, and the term and its etymology criticized by fr:Georges de
Chambray in 1832, writing:[2]

Logistique: Ce mot me paraît être tout-à-fait nouveau, car je ne l'avais encore vu nulle part dans
la littérature militaire. … il paraît le faire dériver du mot logis, étymologie singulière …

Logistic: This word appears to me to be completely new, as I have not yet see it anywhere in
military literature. … he appears to derive it from the word lodgings [logis], a peculiar
etymology …

Chambray also notes that the term logistique was present in the Dictionnaire de l'Académie
française with only a single meaning, as a synonym for algebra.

The French word logistique is a homonym of the existing mathematical term, from Ancient
Greek: λογῐστῐκός, translit. logistikós, a traditional division of Greek mathematics; the
mathematical term is presumably the origin of the term logistic in logistic growth and related
terms. Some sources give this instead as the source of logistics,[3] either ignorant of Jomini's
statement that it was derived from logis, or dubious and instead believing it was in fact of Greek
origin, or influenced by the existing term of Greek origin.

3
Definition

Jomini original defined logistics thus:

La logistique est l'art de bien ordonner les marches d'une armée, de bien combiner l'ordre des
troupes dans les colonnes, les tems [temps] de leur départ, leur itinéraire, les moyens de
communications nécessaires pour assurer leur arrivée à point nommé ...

Logistics is 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". However, the New
Oxford American Dictionarydefines logistics as "the detailed coordination of a complex
operation involving many people, facilities, or supplies", and the Oxford Dictionary on-line
defines it as "the detailed organization and implementation of a complex operation".[4] As such,
logistics is commonly seen as a branch of engineering that creates "people systems" rather than
"machine systems".

According to the Council of Supply Chain Management Professionals (previously the Council of
Logistics Management)[5] logistics is the process of planning, implementing and controlling
procedures for the efficient and effective transportation and storage of goods including services
and related information from the point of origin to the point of consumption for the purpose of
conforming to customer requirements and includes inbound, outbound, internal and external
movements. [6]

Academics and practitioners traditionally refer to the

terms operations or production management when referring to physical transformations taking
place in a single business location (factory, restaurant or even bank clerking) and reserve the
term logistics for activities related to distribution, that is, moving products on the territory.
Managing a distribution center is seen, therefore, as pertaining to the realm of logistics since,
while in theory the products made by a factory are ready for consumption they still need to be
moved along the distribution network according to some logic, and the distribution center
aggregates and processes orders coming from different areas of the territory. That being said,

4
from a modeling perspective, there are similarities between operations management and
logistics, and companies sometimes use hybrid professionals, with for ex. "Director of
Operations" or "Logistics Officer" working on similar problems. Furthermore, the term supply
chain management originally refers to, among other issues, having an integrated vision in of both
production and logistics from point of origin to point of production.[7] All these terms may suffer
from semantic change as a side effect of advertising.

Logistics activities and fields

Inbound logistics is one of the primary processes of logistics concentrating on purchasing and
arranging the inbound movement of materials, parts, or unfinished inventory from suppliers to
manufacturing or assembly plants, warehouses, or retail stores.

Outbound logistics is the process related to the storage and movement of the final product and
the related information flows from the end of the production line to the end user.

Given the services performed by logisticians, the main fields of logistics can be broken down as
follows:

 Procurement logistics
 Distribution logistics
 After-sales logistics
 Disposal logistics
 Reverse logistics
 Green logistics
 Global logistics
 Domestics logistics
 Concierge Service
 RAM logistics
 Asset Control Logistics
 POS Material Logistics
 Emergency Logistics
 Production Logistics

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Loading of a thermal oxidizer at the point of origin en route to a manufacturing plant

Procurement logistics consists of activities such as market research, requirements planning,

make-or-buy decisions, supplier management, ordering, and order controlling. The targets in
procurement logistics might be contradictory: maximizing efficiency by concentrating on core
competences, outsourcing while maintaining the autonomy of the company, or minimizing
procurement costs while maximizing security within the supply process.

Advance Logistics consists of the activities required to set up or establish a plan for logistics
activities to occur.

Distribution logistics has, as main tasks, the delivery of the finished products to the customer. It
consists of order processing, warehousing, and transportation. Distribution logistics is necessary
because the time, place, and quantity of production differs with the time, place, and quantity of
consumption.

Disposal logistics has as its main function to reduce logistics cost(s) and enhance service(s)
related to the disposal of waste produced during the operation of a business.

Reverse logistics denotes all those operations related to the reuse of products and materials. The
reverse logistics process includes the management and the sale of surpluses, as well as products
being returned to vendors from buyers. Reverse logistics stands for all operations related to the
reuse of products and materials. It is "the process of planning, implementing, and controlling the
efficient, cost effective flow of raw materials, in-process inventory, finished goods and related
information from the point of consumption to the point of origin for the purpose of recapturing
value or proper disposal. More precisely, reverse logistics is the process of moving goods from
their typical final destination for the purpose of capturing value, or proper disposal. The opposite
of reverse logistics is forward logistics."

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Green Logistics describes all attempts to measure and minimize the ecological impact of
logistics activities. This includes all activities of the forward and reverse flows. This can be
achieved through intermodal freight transport, path optimization, vehicle saturation and city
logistics.

RAM Logistics (see also Logistic engineering) combines both business logistics and military
logistics since it is concerned with highly complicated technological systems for
which Reliability, Availability and Maintainability are essential, ex: weapon systems and
military supercomputers.

Asset Control Logistics: companies in the retail channels, both organized retailers and suppliers,
often deploy assets required for the display, preservation, promotion of their products. Some
examples are refrigerators, stands, display monitors, seasonal equipment, poster stands & frames.

A forklift truck loads a pallet of humanitarian aid to Pakistan on board a C-17 aircraft,
following devastating floods in the country in 2010.

Emergency logistics (or Humanitarian Logistics) is a term used by the logistics, supply chain,
and manufacturing industries to denote specific time-critical modes of transport used to move
goods or objects rapidly in the event of an emergency.[8] The reason for enlisting emergency
logistics services could be a production delay or anticipated production delay, or an urgent need
for specialized equipment to prevent events such as aircraft being grounded (also known as
"aircraft on ground"—AOG), ships being delayed, or telecommunications failure. Humanitarian
logistics involves governments, the military, aid agencies, donors, non-governmental
organizations and emergency logistics services are typically sourced from a specialist
provider.[8][9]

The term production logistics describes logistic processes within a value adding system
(ex: factory or a mine). Production logistics aims to ensure that each machine and workstation

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receives the right product in the right quantity and quality at the right time. The concern is with
production, testing, transportation, storage and supply. Production logistics can operate in
existing as well as new plants: since manufacturing in an existing plant is a constantly changing
process, machines are exchanged and new ones added, which gives the opportunity to improve
the production logistics system accordingly.[10] Production logistics provides the means to
achieve customer response and capital efficiency. Production logistics becomes more important
with decreasing batch sizes. In many industries (e.g. mobile phones), the short-term goal is a
batch size of one, allowing even a single customer's demand to be fulfilled efficiently. Track and
tracing, which is an essential part of production logistics due to product safety and reliability
issues, is also gaining importance, especially in the automotive and medical industries.

Construction Logistics is known to mankind since ancient times. As the various human
civilizations tried to build the best possible works of construction for living and protection. Now
the construction logistics emerged as vital part of construction. In the past few years construction
logistics has emerged as a different field of knowledge and study within the subject of supply
chain management and logistics.

Digital logistics is driven by a new generation of web-based, enterprise logistics applications

that enable collaboration and optimization, leveraging a central logistics information backbone
that provides visibility across the enterprise and extended supply chain.

Military logistics

Punjab Regiment uses mules for carrying cargo in Burma during WWII. Animals have been used
for logistic purposes by different people throughout history; the Roman army in particular
preferred mules over donkeys for their moving capacity.[11]

In military science, maintaining one's supply lines while disrupting those of the enemy is a
crucial—some would say the most crucial—element of military strategy, since an armed force
without resources and transportation is defenseless. The historical leaders Hannibal, Alexander
the Great, and the Duke of Wellington are considered to have been logistical geniuses:
Alexander's expion benefited considerably from his meticulous attention to the provisioning of
his army,[12] Hannibal is cred to have "taught logistics" to the Romans during the Punic

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Wars [13] and the success of the Anglo-Portuguese army in the Peninsula War was the due to the
effectiveness of Wellington's supply system, despite the numerical disadvantage.[14] The defeat
of the British in the American War of Independence and the defeat of the Axis in the African
theater of World War II are attributed by some scholars to logistical failures.[15]

Militaries have a significant need for logistics solutions and so have developed advanced
implementations. Integrated Logistics Support (ILS) is a discipline used in military industries to
ensure an easily supportable system with a robust customer service (logistic) concept at the
lowest cost and in line with (often high) reliability, availability, maintainability, and other
requirements, as defined for the project.

In military logistics, logistics officers manage how and when to move resources to the places
they are needed.

Supply chain management in military logistics often deals with a number of variables in
predicting cost, deterioration, consumption, and future demand. The United States Armed Forces'
categorical supply classification was developed in such a way that categories of supply with
similar consumption variables are grouped together for planning purposes. For instance,
peacetime consumption of ammunition and fuel will be considerably lower than wartime
consumption of these items, whereas other classes of supply such as subsistence and clothing
have a relatively consistent consumption rate regardless of war or peace.

Some classes of supply have a linear demand relationship: as more troops are added, more
supply items are needed; or as more equipment is used, more fuel and ammunition are
consumed. Other classes of supply must consider a third variable besides usage and quantity:
time. As equipment ages, more and more repair parts are needed over time, even when usage and
quantity stays consistent. By recording and analyzing these trends over time and applying them
to future scenarios, the US Armed Forces can accurately supply troops with the items necessary
at the precise moment they are needed.[16] History has shown that good logistical planning
creates a lean and efficient fighting force. The lack thereof can lead to a clunky, slow, and ill-
equipped force with too much or too little supply.

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Business logistics

A forklift stacking a logistics provider's warehouse of goods on pallets

One definition of business logistics speaks of "having the right item in the right quantity at the
right time at the right place for the right price in the right condition to the right
customer". Business logistics incorporates all industry sectors and aims to manage the fruition
of project life cycles, supply chains, and resultant efficiencies.

The term "business logistics" has evolved since the 1960s[18] due to the increasing complexity of
supplying businesses with materials and shipping out products in an increasingly globalized
supply chain, leading to a call for professionals called "supply chain logisticians".

In business, logistics may have either an internal focus (inbound logistics) or an external focus
(outbound logistics), covering the flow and storage of materials from point of origin to point of
consumption (see supply-chain management). The main functions of a qualified logistician
include inventory management, purchasing, transportation, warehousing, consultation, and the
organizing and planning of these activities. Logisticians combine a professional knowledge of
each of these functions to coordinate resources in an organization.

There are two fundamentally different forms of logistics: one optimizes a steady flow of material
through a network of transport links and storage nodes, while the other coordinates a sequence of
resources to carry out some project (e.g., restructuring a warehouse).

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Nodes of a distribution network

The nodes of a distribution network include:

 Factories where products are manufactured or assembled

 A depot or deposit is a standard type of warehouse thought for storing merchandise (high
level of inventory).
 Distribution centers are for order processing and order fulfillment (lower level of inventory)
and also for receiving returning items from clients.
 Transit points are built for cross docking activities, which consist in reassembling cargo units
based on deliveries scheduled (only moving merchandise).
 Traditional retail stores of the Mom and Pop variety,
modern supermarkets, hypermarkets, discount stores or also voluntary chains, consumers' co-
operative, groups of consumer with collective buying power. Note that subsidiaries will be
mostly owned by another company and franchisers, although using other company brands,
actually own the point of sale.

There may be some intermediaries operating for representative matters between nodes such
as sales agents or brokers.

Logistic families and metrics

A logistic family is a set of products which share a common characteristic: weight and
volumetric characteristics, physical storing needs (temperature, radiation,...), handling needs,
order frequency, package size, etc. The following metrics may be used by the company to
organize its products in different families:[19]

 Physical metrics used to evaluate inventory systems include stocking capacity, selectivity,
superficial utilization, volumetric utilization, transport capacity, transport capacity
utilization.
 Monetary metrics used include space holding costs (building, shelving and services) and
handling costs (people, handling machinery, energy and maintenance).

Other metrics may present themselves in both physical or monetary form, such as the
standard Inventory turnover.

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Handling and order processing

Unit loads for transportation of luggage at the airport. In this case the unit load has protective
function.

Unit loads are combinations of individual items which are moved by handling systems, usually
employing a pallet of normed dimensions.[20]

Handling systems include: trans-pallet handlers, counterweight handler, retractable mast handler,
bilateral handlers, trilateral handlers, AGV and stacker handlers. Storage systems include: pile
stocking, cell racks (either static or movable), cantilever racks and gravity racks.[21]

Order processing is a sequential process involving: processing withdrawal list, picking (selective
removal of items from loading units), sorting (assembling items based on destination), package
formation (weighting, labeling and packing), order consolidation (gathering packages into
loading units for transportation, control and bill of lading).[22]

Picking can be both manual or automated. Manual picking can be both man to goods, i.e.
operator using a cart or conveyor belt, or goods to man, i.e. the operator benefiting from the
presence of a mini-load ASRS, vertical or horizontal carousel or from an Automatic Vertical
Storage System (AVSS). Automatic picking is done either with dispensers or depalletizing
robots.

Sorting can be done manually through carts or conveyor belts, or automatically through sorters.

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Transportation

Cargo, i.e. merchandise being transported, can be moved through a variety of transportation
means and is organized in different shipment categories. Unit loads are usually assembled into
higher standardized units such as: ISO containers, swap bodies or semi-trailers. Especially for
very long distances, product transportation will likely benefit from using different transportation
means: multimodal transport, intermodal transport (no handling) and combined
transport (minimal road transport). When moving cargo, typical constraints are
maximum weight and volume.

Operators involved in transportation include: all train, road vehicles, boats, airplanes
companies, couriers, freight forwarders and multi-modal transport operators.

Merchandise being transported internationally is usually subject to the Incoterms standards

issued by the International Chamber of Commerce.

Configuration and management

Push-back rack for motorcycles, a LIFO rack system for storage

Similarly to production systems, logistic systems need to be properly configured and managed.
Actually a number of methodologies have been directly borrowed from operations

13
management such as using Economic Order Quantity models for managing inventory in the
nodes of the network.[23] Distribution resource planning (DRP) is similar to MRP, except that it
doesn't concern activities inside the nodes of the network but planning distribution when moving
goods through the links of the network.

Traditionally in logistics configuration may be at the level of the warehouse (node) or at level of
the distribution system (network).

Regarding a single warehouse, besides the issue of designing and building the warehouse,
configuration means solving a number of interrelated technical-economic problems:
dimensioning rack cells, choosing a palletizing method (manual or through robots), rack
dimensioning and design, number of racks, number and typology of retrieval systems
(e.g. stacker cranes). Some important constraints have to be satisfied: fork and load beams
resistance to bending and proper placement of sprinklers. Although picking is more of a tactical
planning decision than a configuration problem, it is important to take it into account when
deciding the racks layout inside the warehouse and buying tools such as handlers and motorized
carts since once those decisions are taken they will work as constraints when managing the
warehouse, same reasoning for sorting when designing the conveyor system or installing
automatic dispensers.

Configuration at the level of the distribution system concerns primarily the problem
of location of the nodes in a geographic space and distribution of capacity among the nodes. The
first may be referred to as facility location (with the special case of site selection) while the latter
to as capacity allocation. The problem of outsourcing typically arises at this level: the nodes of
a supply chain are very rarely owned by a single enterprise. Distribution networks can be
characterized by numbers of levels, namely the number of intermediary nodes
between supplier and consumer:

 Direct store delivery, i.e. zero levels

 One level network: central warehouse
 Two level network: central and peripheral warehouses

This distinction is more useful for modeling purposes, but it relates also to a tactical decision
regarding safety stocks: considering a two level network, if safety inventory is kept only in

14
peripheral warehouses then it is called a dependent system (from suppliers), if safety inventory is
distributed among central and peripheral warehouses it is called an independent system (from
suppliers).[19] Transportation from producer to the second level is called primary transportation,
from the second level to consumer is called secondary transportation.

Although configuring a distribution network from zero is possible, logisticians usually have to
deal with restructuring existing networks due to presence of an array of factors: changing
demand, product or process innovation, opportunities for outsourcing, change of government
policy toward trade barriers, innovation in transportation means (both vehicles or thoroughfares),
introduction of regulations (notably those regarding pollution) and availability of ICT supporting
systems (e.g. ERP or e-commerce).

Once a logistic system is configured, management, meaning tactical decisions, takes place, once
again, at the level of the warehouse and of the distribution network. Decisions have to be made
under a set of constraints: internal, such as using the available infrastructure, or external, such as
complying with given product shelf lifes and expiration dates.

At the warehouse level, the logistician must decide how to distribute merchandise over the racks.
Three basic situations are traditionally considered: shared storage, dedicated storage (rack space
reserved for specific merchandise) and class based storage (class meaning merchandise
organized in different areas according to their access index).

Airline logistic network. Denver works as a hub in the network.

Picking efficiency varies greatly depending on the situation.[22] For man to goods situation, a
distinction is carried out between high level picking (vertical component significant) and low

15
level picking (vertical component insignificant). A number of tactical decisions regarding
picking must be made:

 Routing path: standard alternatives include transversal routing, return routing, midpoint
routing and largest gap return routing
 Replenishment method: standard alternatives include equal space supply for each product
class and equal time supply for each product class.
 Picking logic: order picking vs batch picking

At the level of the distribution network, tactical decisions involve mainly inventory
control and delivery path optimization. Note that the logistician may be required to manage
the reverse flow along with the forward flow.

Warehouse management and control

Although there is some overlap in functionality, warehouse management systems (WMS) can
differ significantly from warehouse control systems (WCS). Simply put, a WMS plans a weekly
activity forecast based on such factors as statistics and trends, whereas a WCS acts like a floor
supervisor, working in real time to get the job done by the most effective means. For instance, a
WMS can tell the system that it is going to need five of stock-keeping unit (SKU) A and five of
SKU B hours in advance, but by the time it acts, other considerations may have come into play
or there could be a logjam on a conveyor. A WCS can prevent that problem by working in real
time and adapting to the situation by making a last-minute decision based on current activity and
operational status. Working synergistically, WMS and WCS can resolve these issues and
maximize efficiency for companies that rely on the effective operation of their warehouse or
distribution center.

Logistics outsourcing

Logistics outsourcing involves a relationship between a company and an LSP (logistic service
provider), which, compared with basic logistics services, has more customized offerings,
encompasses a broad number of service activities, is characterized by a long-term orientation,
and thus has a strategic nature.

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Outsourcing does not have to be complete externalization to an LSP, but can also be partial:

 A single contract for supplying a specific service on occasion

 Creation of a spin-off
 Creation of a joint venture

Third-party logistics (3PL) involves using external organizations to execute logistics activities
that have traditionally been performed within an organization itself.[26] According to this
definition, third-party logistics includes any form of outsourcing of logistics activities previously
performed in house. For example, if a company with its own warehousing facilities decides to
employ external transportation, this would be an example of third-party logistics. Logistics is an
emerging business area in many countries.

The concept of a fourth-party logistics (4PL) provider was first defined by Andersen
Consulting (now Accenture) as an integrator that assembles the resources, planning capabilities,
and technology of its own organization and other organizations to design, build, and run
comprehensive supply chain solutions. Whereas a third-party logistics (3PL) service provider
targets a single function, a 4PL targets management of the entire process. Some have described a
4PL as a general contractor that manages other 3PLs, truckers, forwarders, custom house agents,
and others, essentially taking responsibility of a complete process for the customer.

Horizontal alliances between logistics service providers

Horizontal business alliances often occur between logistics service providers, i.e., the
cooperation between two or more logistics companies that are potentially competing. In a
horizontal alliance, these partners can benefit twofold. On one hand, they can " resources which
are directly exploitable". In this example extending common transportation networks, their
warehouse infrastructure and the ability to provide more complex service packages can be
achieved by combining resources. On the other hand, partners can "access intangible resources,
which are not directly exploitable". This typically includes know-how and information and, in
turn, innovation.

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Logistics automation
Logistics automation

Automated storage and retrieval system used by the U.S. military, also used by business in
conjunction with manual picking.

Logistics automation is the application of computer software or automated machinery to improve

the efficiency of logistics operations. Typically this refers to operations within a warehouse or
distribution center with broader tasks undertaken by supply chain management systems
and enterprise resource planning systems.

Industrial machinery can typically identify products through either Bar

Code or RFID technologies. Information in traditional bar codes is stored as a sequence of black
and white bars varying in width, which when read by laser is translated into a digital sequence,
which according to fixed rules can be converted into a decimal number or other data. Sometimes
information in a bar code can be transmitted through radio frequency, more typically radio
transmission is used in RFID tags. An RFID tag is card containing a memory chip and an
antenna which transmits signals to a reader. RFID may be found on merchandise, animals,
vehicles and people as well.

Logistics: profession and organizations

A logistician is a professional logistics practitioner. Professional logisticians are often certified

by professional associations. One can either work in a pure logistics company, such as
a shipping line, airport, or freight forwarder, or within the logistics department of a company.
However, as mentioned above, logistics is a broad field, encompassing procurement, production,
distribution, and disposal activities. Hence, career perspectives are broad as well. A new trend in
the industry are the 4PL, or fourth-party logistics, firms, consulting companies offering logistics
services.

Some universities and academic institutions train students as logisticians,

offering undergraduate and postgraduate programs. A university with a primary focus on

18
logistics is Kühne Logistics University in Hamburg, Germany. It is non profit and supported by
Kühne-Foundation of the logistics entrepreneur Klaus Michael Kühne.

The Chartered Institute of Logistics and Transport (CILT), established in the United Kingdom in
1919, received a Royal Charter in 1926. The Chartered Institute is one of the professional
bodies or institutions for the logistics and transport sectors that offers professional
qualifications or degrees in logistics management. CILT programs can be studied at centers
around UK, some of which also offer distance learning options.[28] The institute also have
overseas branches namely The Chartered Institute of Logistics & Transport Australia
(CILTA)[29] in Australia and Chartered Institute of Logistics and Transport in Hong Kong
(CILTHK)[30] in Hong Kong. In the UK, Logistics Management programs are conducted by
many universities and professional bodies such as CILT. These programs are generally offered at
the postgraduate level.

The Global Institute of Logistics established in New York in 2003 is a Think Tank for the
profession and is primarily concerned with intercontinental maritime logistics. It is particularly
concerned with container logistics and the role of the seaport authority in the maritime logistics
chain.The Institute has developed a community of over 8,500 logisticians who act a global
knowledge network committed to supporting the Institute's mission of contributing to the
resolution of legacy challenges in global logistics. Challenges associated with the traditional
approach of managing single transport modes, modal systems as stand-alone operations. The key
to overcoming these legacy challenges is for the individual stakeholder groups within the
logistics chain to actively engage with each other. The promotion of this agenda is the Institute's
work.

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OBJECTIVES OF THE STUDY:

 To make available the right quantity of right quality products at the right place and time
in right condition.

 To offer best service to consumers.

 To reduce the cost of operations.

 To maintain transparency in operations.

. SCOPE OF THE STUDY

 The study will help the society to know their efficiency and effectiveness towards

Logistic management.

 Logistic Management study can find out the impact of Quality that attract their

customer towards them.

 The study will help the society to get better quality of goods and services from the

logistics.

 The study covers the public of India .

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LIMITATIONS OF PROJECT

1. Outsourcing without proper appraisal process

A good logistics partner is hard to find. The appraisal process itself will include gathering quotes
and doing quality reports to check if the provider meets benchmark standards and so on. Rushing
through the tender process without adhering to a well-thought process will lead to hassles in the
future.

2. Choosing a low-pricing vendor for cost-benefit

An after effect of rushing through the logistic outsourcing vendor process is that you end up
signing the deal with someone who offers the lowest rates. As Sun Tzu, the legendary military
leader once said, “The line between disorder and order lies in logistics.”

Outsourcing the function to a low-priced vendor who cuts corners might actually create chaos
rather than an orderly logistics function. There is a reason why top-notch 3PL players charge a
premium rate. It costs a lot to have personnel and processes in place to ensure perfect paperwork,
timely coordination of carriers, warehouse management and much more.

3. Not specifying roles and responsibilities in writing

Logistics is a subset of supply chain management which by itself is a combination of several
micro-steps. This increases the complexity in logistics planning and implementation.

Unless the roles, responsibilities and tasks of each party take the form of an explicitly written a
Service Level Agreement (SLA), there could be serious complications when the process kicks
into action.

4. Not viewing logistics outsourcing as a strategy

Logistics plays a key role in the overall strategy of an organization. Moreover, the business
environment and customer demands are not what they used to be a few years ago. E-commerce,
mobility, on-demand services and other advancements, have reformed the commerce landscape.

If you are outsourcing logistics merely as a function to be done with, and not as a strategic
element, then the business is not going to gain much despite the economy of scale.

5. Disconnect between clients & outsourcing agents

Does your logistic outsourcing agent really know what you are trying to do? Is it last mile
delivery that your focus is on or faster delivery than the competition? A lack of consensus
between the parties can lead to a waste of resources and also lead to cost overruns and delayed
deliveries.
21
LITERATURE REVIEW

In general, the process by which raw materials are transformed into finished products that are
delivered from suppliers to customers (known as forward logistics) is the focus of most supply
chain management studies (Daugherty et al., 1996). However, in recent years, reverse logistics
that deals with returns of end-of-life (EoL) products from end-users to retailers, manufacturers,
and suppliers for refurbishment, remanufacturing and recycling, has gain a great attention and
emphasis (Chan & Chan, 2008; Li & Olorunniwo, 2008, Rogers & Tibben-Lembke, 2001; and
Srivastava, 2008). The compliance of environmental regulations becomes one of the important
reasons for paying excessive attention on reverse logistics. Economic benefit from recycling
does contribute to the booming reverse logistics in developed countries like USA on one hand,
the high cost of reverse logistics compels the firms to look at the issue seriously from a long term
strategic perspective on the other hand. Therefore, reverse logistics has become a critical
strategic issue for many firms like the electronics industry. Major manufacturers in many
industries in developed countries have implemented reverse logistics to various extents. The
practice can be explained using transaction cost economics (TCE) theory (Maltz, 1993; Skjøtt-
Larsen, 2000) and resource-based view (RBV) of a firm (Halldorsson et al., 2007; and
Rungtusanatham et al., 2003).

Reverse Logistics Management:

An Overview In a distinction, reverse logistics in developing countries like China, despite having
a global manufacturing base, still appears to be at an infant stage in most industry sectors.
Despite having an extensive domestic researches and a general consensus that reverse logistics
can help maintain sustainable development and generate additional profits (Yuan, 2006) only a
few manufacturers in the electronics industry of China have implemented reverse logistics while
others remain uninterested. It is therefore necessary to investigate whether the current firm based
theories on reverse logistics, such as TCE and RBV that have successfully explained the
practices of companies in developed countries, are totally applicable in developing countries.

In addition, 27 external macro environment factors affecting reverse logistics implementation in

developing countries would also need to be examined and compared with those identified in

22
developed countries. Knemeyer et al. (2002) proposed conceptual model of factors affecting the
reverse logistics system to recycle and/or refurbish end-of-life computers that are deemed no
longer useful by their owners which examines both the internal and the external factors
responding directly to the need for future research asserted by Carter and Ellram’s (1998).

This conceptual model shows that external environment comprises of four sectors namely input,
regulatory, output and competitive. Internal environment comprises of strategic factors (strategic
costs, overall quality, customer service, environmental concerns etc.) and the operational factors
(cost-benefit analysis, transportation, warehousing, supply management, packaging as well as
refurbishing and dismantling).

The findings of this study indicates that companies are willing to use recycled or refurbished
products but unwilling to accept these products only for their environmental benefits. Sharma et
al. (2006) acknowledged that bullwhip effect is an old phenomenon described by Forrester et al
(1961) and a new term defined by Lee et al. (1997).

The researchers reported that information distortion and the so-called bullwhip effect has been
discussed by many researchers (Disney & Towill, 2003; Jose & Barajas, 2005; and Towill &
Mccullen, 1999) using analytical model and control theory including. Sharma et al. (2006)
strongly recommended the implementation of a centralized information sharing strategy
irrespective of any demand-inventory policy in the reverse supply chain in order to reduce the
bullwhip effect. French (2002) provided a structure of reverse logistics literature dividing the
entire range of articles, research papers, research works and discussions into three broad
categories namely general discussion, recovery strategies and reuse options.

General discussion include the literature related with reverse distribution, packaging materials,
overall processes and reverse logistics examples, recovery strategies include literature related
with network design, product acquisition and disassembly while the literature related with reuse
options include discussions on direct reuse, remanufacturing, repair, recycling and disposal. 28
Brito et al. (2004) have summed up the crux of over sixty case studies and divided this collected
literature into five broad categories namely reverse logistics network structure, reverse logistics
network relationship, inventory management, planning and control of recovery activities and IT
for reverse logistics.

23
In case of reverse logistics network relationships, researchers listed many tools available in
literature like refund options, buy-back options, fees, take-backs, trade-ins, lease or rent
contracts, bring-up systems, timely and clear information, power, environmental responsibility,
social responsibility and acquisition price.

On the basis of their observation, they said that almost all the case studies described tools for
stimulating the acquisition of goods for recovery with the exception of Farrow and Johnson
(2000). Researchers felt that inventory issues were twofold; first what should happen with the
returned items and second how is the reordering influenced by returns.

For service returns, repair chain is considered as a closed loop often with multiple echelons,
where time is a critical element. They also found that one or more planning and control issues are
very globally described. Their observation reveals that for data on processes, costs and earnings,
IT applications are necessary in all the phases of life cycle of a product. They maintained that all
these case studies provide in one way or the other an evaluation on the benefits of IT.

While studying the reverse logistics operations of a retailer, Hsu et al. (2009) found out that the
biggest problem that a Central Return Center (CRC) is facing, was the time required to maximize
the amount of merchandise, which was shipped back to the vendor for full recovery.

For information sharing, the researchers have suggested to make the contract information
available to decision makers as real-time as possible, to streamline the sorting process and create
a database of returned products using technologies liker RFID and voice detection system, to
have a two-way real time communication system between CRC and Jobbers, to deal with the
damaged products at CRC level in contract negotiation in order to reduce uncertainty for both the
parties.

Tonanont (2009) studied reverse logistics as a part of Closed Loop Supply Chain (CLSC). The
researcher added that CLSC is composed of five main components which are supplier,
manufacturing plant, distribution center/warehouse, retailers/customers and recovery facility.
Singh et al. (2011) believed into two types of reverse logistics systems namely open-loop reverse
logistics systems and closed.

24
 CHAPTER- 2

Research Methodology

25
RESEARCH OBJECTIVE

1. To study the new strategies to increase customer relationship.

2. To study the advertising effectiveness towards Logistic Management.
3. To analyze the awareness of society regarding Logistic Management.
4. To help the society by giving them better quality of goods and Services .

Research design

The Research available is descriptive so as to describe how Logistic Management are important

for the society .

Sources of Data collection

To do a research always we use sources of data collection. But according to the project I have
used both Primary and Secondary data.

Data source Primary (field survey)

Secondary(Internet,Catalogues,Broachers.)
Area of research India

Research Approach Survey Method

Research Instrument Questionnaire

Sample Unit All existing and potential customers

Random sampling
Sampling Method

60 units
Sample Size

Charts & percentage

Data Analysis:

26
 CHAPTER – 3

FINDING & ANALYSIS

27
1. What Type of Logistics Service user You are:

SERVICE USER FREQUENCY PERCENTAGE

INDIVIDUAL 10 10
PROPRIETORSHIP FIRM 10 10
SMALL SCALE INDUSTRY 25 25
LARGE SCALE INDUSTRY 15 15
TOTAL 60 60

The same information is presented in the form of diagrammatically as follows:

30

25

20

15
PERCENTAGE
10

0
INDIVIDUAL PROPRIETORSHIP SMALL SCALE LARGE SCALE
FIRM INDUSTRY INDUSTRY

The information presented in table 1.1 reveals that:

 10 % of the service user are individual , 10% of the service user are
proprietorship firm , 25 % of the user are from small scale industry , 15% of the
user are large scale industry.

28
2. Frequency of Logistics service you use ?

LOGISTIC SERVICE FREQUENCY PERCENTAGE

ONCE IN A WHILE 10 10
ONCE IN A MONTH 25 25
ONCE IN A WEEK 20 20
EVERYDAY 5 5
TOTAL 60 60

The same information is presented in the form of diagrammatically as follows:

25

20

15

PERCENTAGE
10

0
ONCE IN A ONCE IN A ONCE IN A EVERYDAY
WHILE MONTH WEEK

The information presented in table 1.2 reveals that:

 10% of the customer use logistic service once in a while , 25% of the customer

use logistic service once in a month , 20% of the customer use logistic service once

in a week , 5% of the customer use logistic service once in a week.

29
3. Who is your Logistics Service Provider ?

LOGISTIC SERVICE FREQUENCY PERCENTAGE

PROVIDER
GATI 5 5
DHL 25 25
BLUEDART 20 20
SAFE EXPRESS 10 10
TOTAL 60 60

The same information is presented in the form of diagrammatically as follows:

25

20

15
PERCENTAGE
10

0
GATI DHL BLUEDART SAFE EXPRESS

The information presented in table 1.3 reveals that:

 5% of the customer use GATI logistic as their service provider , 25% of the
customer use DHL logistic as their service povider, 20% of the customer use
BLUEDART logistic as their service povider, 10% of the customer use SAFE
EXPRESS logistic as their service provider.

30
4. How long you have been dealing with your Logistics Service Provider ?

LOGISTIC SERVICE FREQUENCY PERCENTAGE

LAST ONE MONTH 5 5
LAST ONE YEARS 25 25
LAST TWO YEARS 20 20
MORE THAN TWO YEARS 10 10
TOTAL 60 60

The same information is presented in the form of diagrammatically as follows:

25

20

15
PERCENTAGE
10

0
LAST ONE LAST ONE LAST TWO MORE THAN
MONTH YEARS YEARS TWO YEARS

The information presented in table 1.4 reveals that:

 5% of the customer use logistic services from last one month , 25% of the
customer logistic services from last one years , 20% of the customer use logistic
services from last one month , 10% of the customer use logistic services from
more than two years .

31
5. Which of the following attributes in the order of your preference you keep in mind while
selecting Logistics Service Provider ?

PRFERENCE FREQUENCY PERCENTAGE

CORE SERVICE 15 15
PRICE 20 20
EXPERIENCE 15 15
DELIVERY RELIABILITY 10 10
TOTAL 60 60

The same information is presented in the form of diagrammatically as follows :

25

20

15

10 PERCENTAGE

0
CORE SERVICE PRICE EXPERIENCE DELIVERY
RELIABILITY

The information presented in table 1.5 reveals that:

15% of the customer prefers core service while selecting their logistic service provider,
20% customer prefers price while selecting their logistic service provider , 15% of the
customer prefers experience while selecting their logistic service provider, 10% of the
customer prefers delivery reliability while selecting their logistic service provider.

32
CHAPTER – 4

CONCLUSIONS

33
CONCLUSION

Project logistics is a very complex field and covers a great many aspects. A part from making
sure that the hundreds of thousands of different items are available when required, the
responsibilities of the project logistics manager can also include the supply and well-being of the
construction team. We believe that this introduction to project logistics management will give
the reader some appreciation of the complexity.

Outsourcing project logistics to third- and fourth-party logistics service providers can help the
owner organisation and the EPC contractor achieve cost reductions and improves the probability
of a successful project. Both the owner and the EPC contractor can learn from the project
logistics service providers, because of the exposure to the best available project logistics
practices and techniques.

The aim of effective logistics management is to improve the efficiency of the operations,
ensuring customer satisfaction, and increase productivity.

These tips and strategies are necessary for process optimization. Every logistics firm that is
struggling to boost their operations, they can incorporate these suggestions for logistics network
optimization.

34
 CHAPTER – 5

RECOMMENDATIONS

35
RECOMMENDATIONS

 First , recommendation is that they have to make proper planning so that they can
achieve their tasks within a given period of time.

 Second , recommendations is that they have to adopt automation because automation

technology plays a major role in increasing the efficiency of an organization. Automation
has a vital role in the business process optimization. There is valuable software that can
be deployed in the logistics process.

 Third , recommendations is value relations as the team is an essential aspect of an

organization that is responsible for the growth. Whether it’s the delivery guy or the
warehouse manager, everyone should be perfect in their respective field of work.

 Fourth , recommendation is warehouse management. Effective logistics management

is incomplete without proper warehouse management. Warehouse operations are
considerably dependent on the type of goods.

 Fifth , recommendation is efficient transportation. Transportation department can be

analyzed to decrease the expenses of the logistics firm and at the same time, it can be
revamped for faster delivery of the products.

36
 CHAPTER - 6

LIMITATION OF THE STUDY

37
LIMITATION OF THE STUDY

Not single work is exception to the limitations every work has got its own limitations, so due to

time constraint, my study confines only to India and it is not possible to make extensive study.

It is assumed that the sample selected represents entire population.

a. Because of time constraint, my study confines only to India and it is not possible to
make extensive study.

b. By busy schedule of the individuals it is difficult to extract more information from

them.

c. Unwillingness of Public has left us to make random conclusions.

38
BIBILIOGRAPHY

REFERENCE BOOKS:-

a) Logistical Management – Tata McGraw 2000 Edition.

Written by Donald. Bowersox, and David. Closs.
b) The Management of Business Logistics – 7th Edition:
Written by Edward J. Bardi, C.John Langley, and John Joseph Coyle
c) Logistics and Supply Chain Management: Creating Value - Adding Networks
Written by Martin Christopher.

Websites:

i) http://www.idsc.com.sg/images/service_logistics_img1.jpg
ii) http://www.indexuae.com/Top/Business_and_Economy/Services/Logistics
iii) http://www.lintasfreight.com/
iv) http://www.uae-shipping.net/Lintas-Freight-Logistics-L.L.C..html

39
ANNEXURE

40
 Questionnaire

Dear Sir/Madam,

Please provide the below mentioned information:

Name: _______________________________________________________

Address: _______________________________________________________

Gender: Male [ ] Female [ ]

1. What Type of Logistics Service user You are:

a) Individual

b) Proprietorship Firm

c) Small Scale Industry

d) Large Scale Industry.

2. Frequency of Logistics service you use

a) Once in a while

b) Once in Month

c) Once in a Week

d) Everyday

41
3. Who is your Logistics Service Provider

a) Gati

b) DHL

c) Blue Dart

d)Safe Express

4. How long you have been dealing with your Logistics Service Provider

a) Last one Month

b) Last one Year

c) Last 2 Years

d) More than Two Years

5. Which of the following attributes in the order of your preference you keep in mind while
selecting Logistics Service .

a) CORE SERVICE

b) PRICE

c) EXPERIENCE

d) DELIVERY RELIABILITY

42