Logistics call for an understanding of the total supply chain, the elements of which include inventories, packing, forwarding

, freight, storage and handling. Logistics is responsible for all the movement that takes place within the organization whether it is inbound logistics of incoming, raw materials or movement within the company or the physical distribution of finished goods, logistics encompasses all of these. Typical logistics framework mainly consists of Physical Supply, Internal Operations and Physical Distribution of Goods and Services. To put it more simply, the material supply logistics starts from the base level of “generation of the demand”, through the “process of purchase” and “supply of material from the vendor” right through to “final acceptance” and “payments to the supplier” and “issue to the indenter” and has to be considered as a “one whole activity” with each stage having an impact on price/cost of material supply. Logistics is, in itself, a system; it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel.


The simplest way to.describe logistics is to say that it is all about ways and means of meeting the demand for materials i.e. satisfying the customer with what he wants, when he wants, where he wants etc. Definition includes outbound, inbound, internal and external movements and returns of material for environmental purposes. The logistics concentrate on dynamic processes, related to the flow of materials and the relationship between the materials and their use at different facilities. The most wide spread definition from council of Logistics Management says that “Logistics is the part of the supply chain process and plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customers requirements.”

The study of logistics is especially important for bulk raw materials.some how in time. Water & Pipe Line as the modes of Transportation. food grains. packaging etc. capability. This mode is ideal for transportation of heavy and bulky goods and suitable for products with long lead times. banks and financial service organizations. for making scheduled delivery. mostly conducted in containers of varied size. product type. petroleum products and other heavy goods. steel. where substantial outflow of freight is involved. iron ore. fertilizers. Road. cement. Management of Logistics is an art which is extremely difficult to perfect in India. to decide the appropriate mode of Transportation. usually not connected by any other mode of Transportation. Road : Used by suppliers to deliver goods in a cost effective manner and best suited for short distances. lead time etc. institutions such as Hospitals and schools and service organization such as retailers. A logistics expert needs to understand these modes based on priorities. . Rail: Used for delivery of a wide range of goods including coal. Air: Used mostly for delivery of high value and tow volume goods from distant suppliers. It is also suitable for emergent item to be imported for some specific requirement. JIT ends up being SHIT . It is relevant to all enterprises. excellent short and long term forecast visibility and JIT capability. The study of logistics is important to establish a lean supply chain which would give an advantage of quick product change over. including Govt. Many transport companies have expertise for fast delivery. MODES OF TRANSPORTATION IN LOGISTICS : In order to transport material from one place to another Logistics Managers are using Rail. Air.SCOPE: Logistics is not confined to manufacturing operation alone. Water : Used by firms for delivery of goods from distant suppliers.

aggregation of smaller buyers. . The options are : increased trailer utilisation. THIRD PARTY LOGISTICS : Third Party Logistics (3PL) provider handles all or most of freight of the organizations including the management of information by the third party. • Resource constraints that require companies to concentrate only on their core manufacturing or new product development activities. will lead not only achieving immediate cost reductions in operations but also to enormous productivity gains over the next few years. a warehouse. Purchase asset based transportation is becoming increasingly a commodity. consolidation. manufacturing and distribution leading to an increase in the complexity of material movement.Pipe Line : Used by oil sector companies for mass movement of Petroleum products including gases. The tracking and control of movement of goods drive freight optimization and asset utilization. combining full truckload shipments. The principle reasons of for this function are as under: • Globalization of sourcing. or a third party freight manager to perform all or part of a company‟s production distribution functions. To put simply. An increased need for small but frequent shipments with 100 percent reliability. It could be the use of a transportation carrier. • Competition that has forced companies towards more responsiveness and a reduction in inventories. New and cheaper information flow resulting from internet enabled solutions. and having to oversee hundreds or thousands of shipment. Due to quite low operating cost it is one of the preferred mode of transportation. 3PL refers to the outsourcing of a logistics function. requiring core competence in logistics management. freeing the company from day to day interaction with carriers.

Case : Logistix Worldwide is a leading third party logistics (3PL) and distribution company. in 2004 in lieu of expanding their internal resources.S. and a growing customer base. New Jersey. Logistix is often the sole U. “After selecting 3PL Central. With 3PL Central. industry expertise. they are able reap the rewards of a robust WMS solution to manage their distribution activities and. As many of its customers‟ operations are based entirely overseas. or update. California. Either choice would need to provide its global customers with timely information regarding Logistix‟ operations. keeping IT overhead to a minimum and providing global access to Logistix‟ data from any PC connected to the Internet. Rancho Dominguez and Oakland. office products and publishing. Logistix manages all receiving and shipping. a two day delivery point of 80% of the US population. It faced a choice of increasing it customer support staff to handle inbound customer calls at any time of day. just as importantly. maintain. 24/7 WMS system. With the latest technology. Providing 24/7 Visibility to a Global Customer Base Logistix sought to provide its customers with near real-time visibility to the shipping status of their orders and inventory levels. 3PL Warehouse Manager is a web-based solution with no software to install. enable its customers to track their shipments and inventory with access to data from a real-time. or implementing a new software solution that would provide this information to customers securely over the Internet. a thorough evaluation of available software options. serving manufacturers in a variety of industries including lighting. Logistix leverages the latest in technology to streamline its operations without impacting its relationship with their clients and their trading partners. After carefully considering their customers‟ needs. we chose to implement 3PL Warehouse Manager immediately and run parallel systems for six months to make the transition easier on Logistix and our customers. Managing Director at Logistix Worldwide. presence for these organizations. responds to all customer service inquiries. 3PL Warehouse Manager™.” stated Erik Hinson. as well as Edison. and related costs. With a lean staff to keep costs competitive. “We found that our . It is strategically headquartered in Tennessee. Logistix manages its customers‟ supply chain needs from point of manufacture through to final customer delivery. and provides day-to-day inventory management on behalf of their customers. with additional facilities in Los Angeles. Logistix selected 3PL Central‟s on-demand warehouse management solution (WMS).

We put our customers‟ EDI concerns to rest as EDI can be easily integrated into our costeffective services. including existing 3PL WMS provider 3PL Central. parcel tracking information. shipment status. Within just six weeks. After speaking with some of their partners and customers. Logistix‟ customers can access reports online.” When looking to add EDI to its capabilities a few years ago. SPSCommerce. namely achieved through Electronic Data Interchange (EDI). as well as more than 1.” No matter their location or time zone. Offering EDI Without Becoming Experts Today‟s global supply chains are relying on visibility and communication. the need to support retailer EDI became critical to support existing and new customers.g.” commented Hinson. In addition. receipts.net. and more. As business grew for Logistix.”continued Hinson.300 other retailers. “EDI is a requirement to participate in most supply chains. Office Depot. Staples. Logistix selected SPS Commerce‟s web-based EDI service. We have the highest confidence in the 3PL Central solution as the right technology for Logistix Worldwide and our customers. Retailers usually show preference to their EDI-capable vendors. they had a reputation for . allowing them to view real-time inventory status. “SPS‟ service had proven EDI connections with many of our customers‟ trading partners including Grainger Industrial Supply. etc. while 3PL Warehouse Manager could input our information in real-time.). we decided to turn off our older system and use 3PL Warehouse Manager exclusively.net was processing Logistix‟ EDI in a very short period of time. grocers and distributors future customers might request.. we educate our clients on how EDI can help them to grow their business by securing new retail customers or growing the volumes carried by current customers. and Wal-Mart. “At Logistix. shipments. or leveraging EDI capabilities and expertise available from a Software-as-a-Service (SaaS) or on-demand service.staff was spending hours entering data into the old system. With a pre-wired and proven integration with 3PL Central‟s WMS system. SPSCommerce. they are automatically notified of via email of key warehouse events (e. “In addition. Logistix was again faced with adding IT staff and systems. and one that often makes manufacturers uneasy about its costs and their responsibilities.

working well with their customers and could scale to meet our growing needs.. we are confident of their EDI service as glad to integrate it into offerings. According to John Gaftorna. “We have more to offer our customers and can service large and small accounts alike with our knowledgeable staff. It has also attracted new business.” FOURTH PARTY LOGISTICS : Fourth Party Logistics (4PL) provider is a supply chain integrator that assembles and manages the resources.” . 4PL is emerging as a path to achieve more than the one time operating cost reductions and asset transfers of a traditional outsourcing arrangement. technology providers and management consultants. Each month they are processing more than a thousand EDI transactions with plans to grow this volume as their business.” explained Hinson. 4PL organizations can create unique and comprehensive supply chain solutions that cannot be achieved by any single provider. “3PL Central and SPS Commerce have given us a competitive advantage and without the combined solution we would not have been able to grow our business so quickly. “White outsourcing third party logistics is now a accepted business practice. capabilities and technology of its own organization with those of complementary service provider to deliver a comprehensive supply chain solution. With SPS‟ expertise and robust service. and their clients‟ business grow. Logistix has signed on new accounts that desired these services as part of their 3PL relationship.. Through alliances between best-of-breed third party service providers.” Logistix‟ use of SPS‟ services scale to enable them to service new customers and account for the seasonality of some of their customers‟ business. Due to our WMS and EDI capabilities. to provide maximum overall benefits. Logistix is able to deliver more to its customers while keeping its costs low and customer satisfaction high. Fourth Party Logistics is emerging as a breakthrough solution to modern supply chain challenges. Delivering a Competitive Advantage By offering online visibility and comprehensive EDI.

There are many variations of the 4PL model that are practiced.4PL can be described as the complete outsourcing of the logistics function including procurement of service providers.providers. A) Lead logistics provider: The 4PL provider acts as an in house freight management company. The services provided by a 4PL provider are: • Freight Negotiations with 3PLs • Freight Contract Management • Transport Billing • Continuous Improvement Programs • Management of Service Providers • IT Solutions . it might or might not have a role in the selection of 3 PL partners. C) Industry Innovator: Under this model the 4PL uses its expertise and resources to create a solution not for any single client. 4PL providers do not own assets for transportation or warehousing. Three different models are summarized as under. 3PI selection and freight management on behalf of its client. B) Solution Integrator: In this variant of the model. value delivery processes and technology for their clients in order to allow their clients to totally outsource their logistics management activity. the 4PL acts as the integrator of various 3PLS and as a single window for freight negotiations. but rather leverage the solutions created by 3PL. It takes care of transport invoicing and the monitoring of the performance of the 3 PLs. but for offering 4PL services to a number of clients in an industry. The 4PLs do not compete with 3PLs as they have superior expertise in their respective fields by virtue of their investment and specialization. in order to identify and provide „best in class‟ services to their clients. 4 PL companies are suppliers which have the expertise to manage resources.

the time is not far when 5 PLs and 6 PLs may emerge which will probably we doing part of the manufacturing and marketing for the organizations. growing at a tremendous case as the Internet and E-Commerce is drastically changing the range. . greatly influencing and enhancing the effectiveness of logistics.e. as a strategy. Due to the big boon of information technology. companies offer repair and replacement services for their products under the warranty periods. The defective products are often shipped across international borders to common repair centers to be refurbished and returned to the originating station. RESERVE LOGISTICS: Increasingly. delivery time and the speed of information as well as ordering and payment process. to compete on services. Logistics service providers who offer these services have to tackle issues pertaining to duty payment on refurbished products.• Risk Management and Insurance • Cash-flow Management. CONCLUSION: Logistics is one of the area of the supply chain i. customs documentation and the establishment of collection points for repair for the customers.