Introduction to Logistics

Understanding Logistics…

Logistics is the management of the flow of goods,

information and resources between the point of origin and
the point of consumption.
Logistics can be defined as “having the right item in the
right place, at the right time, in the right quantity, at the
right price and in the right condition, for the right customer”
There are two fundamentally different forms of logistics: one
optimizes a steady flow of materials through a network of
transport links and storage areas, while the other
coordinates an effective sequence of resources in order to
carry out a project
 History behind…

 It is a business concept that evolved during the

1950s due to the increasing complexity of supplying
businesses with materials and transporting products
in an increasingly globalized supply chain.
The complexity led to a call for experts in the process
who are called logisticians
Find the components involved in Logistics…
Work in logistics involves the integration of
information, transportation, inventory,
warehousing, material handling, packaging,
human resources and sometimes security
The main functions of a qualified logistician include
inventory management,
purchasing,
transportation,
 warehousing,
consultation and organizing and planning of these
activities.
Logisticians combine a professional knowledge of
each of these functions to coordinate resources in an
organization
 Questions on Logistics.

1. The concept of logistics actually originated from

military in ancient Greek.
True /False/ Not mentioned
2. Logistics is the science of managing and controlling
the flow of goods between the point of origin and the
point of production.
True /False Not mentioned
3. To satisfy the needs of suppliers is one of the goals of
logistics.
True/ False /Not mentioned
4. Material handling is one of the activities of logistics.
True /False /Not mentione
 Learning ACTIVITY…

#Task 1
The telephone operator of a company called JK is receiving a call from Jack, a
college student who is just about to graduate.

Q. Listen to the conversation and match the people with the correct
information.

a. Jack Listening
b. Mr. Smith
c. Anna

------------ is the Manager of the Human Resources Department.

------------has some questions about the advertised position.
……….. is the Human Resources Administrative Assistant.
Logistic is a value chain…
 Logistics is a Value Chain

■ Inbound logistics: Receiving, warehousing, and

inventory control of input materials

 ■ Operations: Transforming inputs into the final

product or service to create value

■ Outbound logistics: Actions that get the final

product to the customer, including warehousing
and order fulfillment
Marketing and sales: Activities related to buyers
purchasing the product, including advertising,
pricing, distribution channel selection.

 ■ Service: Activities that maintain and improve a

product’s value, including customer support, repair,
warranty service,
 Support activities identified by Porter can also add value to an organization

■ Procurement: Purchasing raw materials and other

inputs that are used in value creating activities

 ■ Technology development: Research and development,

process automation, and similar activities that support
value chain activities

 ■ Human resource management: Recruiting, training,

development, and compensation of employees

■ Firm infrastructure: Finance, legal, quality control,

and so on
 The importance
Major Benefits of logistics in business

 Cost savings by centralizing inventory management.

 Faster order fulfillment by relying on a global

transportation network.

 Improved cash flow.

 Flexibility to change distribution patterns for new

products based on ever-changing customer demands.
 customer groups (market segments) of Logistics

o Parcel and documents express delivery services.

o Freight by air, ocean, road or rail.
o Warehousing and distribution.
o Supply chain solutions.

Logistics is one of the spheres, which still have potential

as far as improving performance is concerned.

There are large unused capacities in logistics processes in

terms of costs reduction and quality of service.
 Emerging trends in logistics

In the recent years technological trends behind

logistics processes have evolved significantly, from
traditional logistics to widespread use of e-logistics.

This transition is of crucial importance for the

competitiveness within the logistics market.

Internet of things and Internet of Everything have a

strong influence on the logistics itself, though it may
not be entirely visible to the end user.
Supply chain management changes and evolves, just as
much as 3rd-party logistics and 4th-party logistics expand
towards 5th-party logistics.

E-Logistics develops various disciplines in which cloud-

based operations, m-logistics, as well as Mobile Supply
Chain Management and augmented reality are important
segments in the future of logistics.

There are no visible limits to a fore mentioned

development; we are witnessing a completely new
paradigm of logistics and supply chain management.
 Inbound Logistics

Inbound Logistics involves the activities of receiving,

storing, and distributing raw materials for use in
production.
 It is an integral element of business operations for a
manufacturing firm.
Inbound logistics services cover all activities
required to bring goods from a sourcing location to a
warehouse or production plant, such as
transportation, inventory, warehousing and
materials handling.
Inbound Logistics is an outsourced service, which
offers customers the following benefits:

Identification and reduction of inbound costs;

lower inventory levels of both packaging and
ingredients
increase supply chain agility so that new products or
promotions can be brought to market faster, etc.
Temporary storage prior to shipping.
Product quality control.
Mapping the supply chain and analyzing the cost
elements on a comparable basis.
Managing the transport and freight forwarding of
inbound materials and finished product.
Use of state-of-the-art IT systems to provide full
visibility of transit throughout the supply chain.
The advantages of the effective inbound logistics
service are as follows:
 Consolidation of goods prior to shipping that helps
eliminate costly part shipments.
 Local representation to affect customs compliance
procedures in the country of origin.
 Product picking and packing prior to export.
 Temporary storage prior to shipping.
 Product quality control.
 Mapping the supply chain and analyzing the cost
elements on a comparable basis.
 Managing the transport and freight forwarding of
inbound materials and finished product.
 Use of state-of-the-art IT systems to provide full
visibility of transit throughout the supply chain.
 Outbound Logistics

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.
 Outbound logistics focuses on distribution.
Shipping, freight and warehousing are all key
functions that fall under this category.
 This also includes communication with recipients
and carriers.
Inbound and outbound systems share some common
activities (e.g. transportation, inventory,
warehousing, materials handling).
Inbound systems, outbound systems have some
activities that are unique in nature.
The cargo handling services may include:
 Cargo collection and consolidation.
 Cargo forwarding. (Freight forwarding)
Transit warehousing.
 Product completion and inspection.
 Cargo tracing
 Documentation and import handling.
Customs clearance, etc.
Cargo collection and consolidation.
 Freight forwarding

Freight forwarding is the planning and

coordinating of the movement of commodities across
international borders, on behalf of shippers.
Transit Warehousing
Product completion and inspection
Cargo Tracking
Customs clearance
 Benefits for customers are the following:

First line of quality control (monitoring the

specification, quality and condition of merchandise
supplied by a manufacturer prior to collection or
shipment).

 Receipt and acknowledgement of orders (dealing

with export documentation and Letters of Credit
requirements, instructions to transport operations,
completion of pre-shipment inspection etc.).
1. Good Customer Service Helps in Earning
Customer Loyalty and Maintaining a Client

2. A Good Customer Service Boosts the Brand

Image

3. Good Customer Service Depends Upon

Cheerful, Sensitive and Positive Customer
Care Representatives
4. Satisfied And Happy Customers are Good
Advertisement for the Brand.

5. A Great Client Assistance is a Key Factor in

Customer Service that Gives the Brand The
Edge Over Rivals

6. Long Term Customer Retention