Under the guidance of:

Ms. Hema Kadukar

(Prof. of Logistics Management)

Members

Furqan Raine Rahul Bhalerao Reshma Chavan Sagar Patil Darshan Dedhia Archana Dhandhre Krunal Ganatra Pravin Gasva Kushal Patel

9402
9404 9406 9408 9410 9412 9414 9416 9455

Introduction to logistics

Definition
The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to the point of consumption for the purpose of conforming to customer requirements.

- Council of Logistics Management

(CLM)

Types of logistics (a) Inbound (b) Outbound

Objectives of Logistics Management

Customer satisfaction Understanding the customer Managing the uncertainty Responding to globalization Cost reduction and improving profits

Logistics Costing

What is Cost? Points of logistics cost:

Transportation cost Inventory cost Warehousing cost Local delivery cost Order Processing cost

Logistics Costing

Logistics Costing Methods

Conventional costing method

(to find product cost)

Activity Based Costing

(per activity of logistics functions)

Transportation

Introduction
Costs involved
Fixed cost

Variable cost

Modes of transport
Airways

Roadways
Railways Water ways

Transportation to warehouse

The North-West Corner (NWC) Rule Least Cost Method (LCM) Row Minima Method (RMM) Column Minima Method (CMM) The Vogels Approximation Method (VAM)
(best method)

Inventory

What is Inventory? Types of inventory

Raw Materials Work in Progress Finished goods

Needs of inventory

Uncertainty of demand Uncertainty in lead-time Time lag in deliveries Stock built up for scale of economy

ABC Analysis
Basic principle - 10% of items hold 70% of value
Example:

Category A B C

Sorting of items in a group % of items

10 20 70

% of value 70 20 10

Economic Order Quantity (EOQ)

What is EOQ? Advantages Disadvantages

Not suitable for small organisations

Not suitable for seasonal products

Formula:
EOQ = 2DCO CC

Economic Order Quantity (EOQ)

Example:
Demand (D) = 200 units Working days = 20

Solution
EOQ = 2DCO CC

Lead time

=2

Carrying cost (CC) = 4 Ordering cost (CO) = 120 Cost per unit = 10

2 x 200 x 120 4

48000 4 12000 110 units

= =

Just In Time (JIT)

Introduction This is a technique used from TQM process Benefits:

Timeliness

Quality
Productivity Flexibility Work simplification and waste reduction

Just In Time (JIT)

Pipeline

Just In Time (JIT)

From Logistics point of view:

Waste elimination

Material management in JIT Total Vendor Quality Control Inventory

Poka-yoke (technique used in JIT)

What is Poka-yoke?
Principles of Poka-yoke
Build quality in processes

Stop doing wrong and start doing right

Dont think of excuses. Think about how to right 60% chance of success is good enough. Implement idea now. Mistakes can be reduced to zero when everyone works together to eliminate.

Ten heads are better than one.

Kanban process (technique used in JIT)

What is Kanban?
Benefits of Kanban
A simple and understandable process

Provides quick and precise information

Low costs associated with the transfer of information Provides quick responses to changes Limit of over-capacity in processes Avoids over production It minimizes waste Control can be maintained Delegates responsibility to line workers

Warehouse

What is a warehouse? Why it is important?

Warehouse

Warehouse

Material Handling

What is Material handling?

Acknowledgement

THANK YOU