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1. 2. 3. 4.

Infrastructure Taxation Inadequate Information Poor management decisions

What does bad logistics causes?

Costly products
Higher cost of capital Damaged Products Excessive movements costs Worst Economy Black Market Exploitation

Elements of Logistics
Information Management
Inventory Control Transportation Warehousing Packaging

Importance of 3cs
Customer Competition

Inbound Logistics
Activities associated with receiving, storing and

distributing inputs to the product such as material handling, warehousing, inventory control, vehicle scheduling and returns to suppliers. It takes care of the procurement cycle.The task involves:
Sourcing Order Placement Transportation Receiving

Outbound Logistics
Activities associate with collecting, storing and

physical distributing the product to the buyers.

It includes distribution of finished goods, order

processing, warehousing, material handling, delivery vehicle operations, scheduling, shipping etc.

Logistics Performance cycle

It Links the facilities in the value chain with each

other. These facilities are called nodes and these nodes are connected by links, called LPCs. These links are the product transportation and information flow. LPCs are sensitive to input and highly responsive to customer needs.

Procurement cycle
Manufacturing support cycle

Physical distribution cycle


The network of organizations that are having linkages,

upstream and downstream, in different processes and activities that produce and deliver the value in the form of products and services in the hands of the ultimate consumer

Three flows in SCM

Product flow
Information flow Financial flow

Participants in SCM
Manufacturers Distributors Customers

Importance of SCM
Reduced inventory
Better flow of information Customer satisfaction Competitive edge Builds trust Avoids wastage Quick response

Difference between Logistics Management & SCM

Concerned with getting It encompasses all

goods & services where they are required and when they are desired
It is a narrower concept It is conducted within

the organization It originated from Military logistics

activities associated with movement of goods from raw materials stage to end user It is a broader concept It functions outside the organization It originated from Business logistics

The objective is to

The objective is to

minimize cost 2 flows: Value flow and information flow

maximize profitability 3 flows: Value, information and financial flow


The different objectives between the stakeholders,

dealers and retailers will cause confusion and fluctuation in order placement
Also different in time period of forecasting in demand

by different participants can cause variations in order placement

It results in overload or shortage of stocks in SKUs

Causes of Bullwhip Effect

No communication up and down in supply chain
Lack of coordination Delay in flow of information and materials Free return policies

It increases: Manufacturing cost Inventory cost Replenishment lead time Transportation cost Labour costs More Stock-outs Negative effect on performance Loss of customer service & Loss of sales

Know your customer
Proper forecast Better information Perfect logistics Invest in best talent Analyse Key Data Modern technique

Extended enterprise
It is loosely coupled, self organizing network of firm

that combine their economic output to provide product and service offerings to the market.
All parties connect through a contract and work as

single corporation.