1.

7 INTEGRATED LOGISTICS

Introduction:

Integrated logistics is a technique which utilises various source and

Channels to meet customer demand in time. Logistics is viewed as a

Competency that links an enterprise with its customers and suppliers.

Information from the customers flows in the form in the form of sales

Activity, forecasts and orders. Information is then translated into

Manufacturing and purchasing plans. Raw materials are procured and

Converted into finished products. Thus, the process is viewed in terms of two

Inter-related efforts, inventory flow and information flow.

The entire logistical process is viewed in terms of two inter- related

Activities. They are:-

a. Inventory Flow

b. Information Flow

a)Inventory Flow:-

1. The operations of logistics starts with a purchase of raw material

From supplier and ends when this raw material is converted into a

Finished Product sold to customers.

2)This raw material gets value at each stage of its development.

Stages of Inventory Flow:-

1. Procurement:- It basically involves purchase of raw material for

The finished product.

2. Manufacturing Support:- It basically involves performing

Various manufacturing activities and operations to convert raw

Material into a finished product.

3. Physical Distribution: It basically involves movement of

Finished goods towards the customers for utilization of value

Created.

b. Information Flow..

Logistical Information Flow involves two major types of flows:-

I )Planning and Co-ordination flows:-It provides information concerned with planned activities.

ii) Operations Flow:- It is needed to direct day to day activities.

Information flow is on both the directions. Information flows from

Customers in relation to their needs, wants, preferences, etc.

Information also flows within the various units of the organization

Such as manufacturing plant, warehouse, etc.

1.8 LOGISTICAL COMPETENCY

Introduction

1)The two main objectives of logistics are:

a) To minimise overall logistics costs.

b)To provide superior customer service.

2. But the problem is that if company attempts to provide superior

Customer service, then logistical cost will increase. In the same manner,

If the company attempts to reduce overall logistical costs, then customer

Service is not satisfactory.

3. Thus, a company has to maintain a proper balance between its two

Main objectives so as to provide superior customer service at a lower

Logistical cost. This is possible through a proper logistical competency.

 4. Thus, logistical competency is the arms capability to provide superior

Customer service at lowest possible cost.

5. Its arms is to exploit logistical function to provide superior customer

Service at lowest cost in order to gain market share.

6. In a tour made by product from raw material stage (supplier) to the

Manufacturing firm, from manufacturing firm to the point of

Consumption such as transportation, warehousing, material handling,

Inventory management, etc are performed.

7. The WORK OF LOGISTICS is to co-ordinate functional areas like

La transportation, warehousing, material handling, etc into Network Design

To achieve logistical competency.

Devlopement to logistical competency

Market leader

State 4

Customer service

State 3

Market access

State 2

Gaining cost Effectiveness

State 1

SEVEN PILLARS / SEVEN PARAMETERS to achieve logistical competency.

1. Network Design: Logistical network includes various facilities such as

Manufacturing plants, warehouses, distribution centres and retail stores.

Logistical network analysis involves:

1)Determining which facilities are needed (Plants, warehouse,Distribution centres).

2)Determining how many of each type of facility. (number of plants,warehouses, distribution centres)
are needed.

3)Determining the geographical location of each facility.

4)Determining the work to be performed at each facility.

All this analysis of various facilities is known as Logistical Network

Analysis.

Proper network analysis will result in establishing an appropriate

Network design which will reduce overall logistical costs but yet provide

Superior customer service.

2. Information Management: Information Management is a invisible

Element in the process of logistical management. Information plays a

Crucial role in the process of logistics management. Demand

Forecasting and order processing are two areas of logistical work that

Depends on information. Timely information and accurate data are the

Key to the better logistical performance.

3. Transportation: Transportation refers to physical movement of

Products from one place to another. Since products are produced in a

Different area and are consumed in a different area, transportation

Physically moves the products from where they are produced to where

They are needed. It acts as a physical link that connects the company to

Its suppliers and customers.

Transportation is accomplished in three ways:

One’s own fleet- Private carriage borbe include albed

Contract with specialists on long term basis-contract carriage

Contract on individual shipment basis- common carriage

Determinants of effective transport system

Cost: The cost refers to total cost for the movement of goods between

The two geographical functions and expenses related to administration

And maintaining in-transit inventory.

Speed: Speed of transportation refers to the speed with which goods

Reach the destination.

Consistency: Consistency in speed means achieving the same speed

Over a long period of time.

Logistical competency can be achieved by deciding proper mode of

Transportation, deciding number and size of transport facilities, deciding

Delivery routes to be followed, etc.

4. Inventory Management: Inventory management involves maintaining

The required level of stocks to meet customer requirements

Altaneously ensuring minimum inventory carrying cost. Inventory

Management involves decision to be taken on various aspects such as:

Safety Stock

Lead Time

Replenishment of stock

Logistical competency can be achieved by accurate sales forecasting,

Efficient order management, stock control, etc.

5. Warehousing, Material Handling & Packaging:

Warehousing: Warehousing is a storage place where goods are

Stored until they are sold. Thus, warehousing is basically holding

Goods before dispatch after it is produced.

Logistical competency can be achieved by deciding number of

Warehouses, location of warehouses, types of warehouses, offering

Specialized services, etc.

6. Material Handling: Material handling means providing the right

Amount of right material, in the right condition, at the right place, at the

Right time.

Logistical competency can be achieved by deciding the type of material

Handling equipment, scheduling material handling activities and proper

Maintenance equipment.

7. Packaging: Packaging is an important logistical management function.

It has a significant impact on the cost and productivity of the logistical

System. Packaging influences both the efficiency and the effectiveness

Of logistical operations.

Basically, there are two types of packaging: Consumer packaging and

Logistical packaging.

Consumer packaging

Focus customer convenience, market appeal and product protection.

Logistical packaging includes individual units, master cartons and containers. It

Focuses on handling, protection and communication. Logistical

Competency can be achieved by decided proper type of packaging.