Logistics Management

Dr. Ravi Shankar Ms Ruchi Khanna

Meaning of Logistics

It is that part of SCM that plans, implements and controls the efficient, effective forward and reverse flows and storage of goods, services and related Dr. Ravi of origin information between the pointShankar and the point of consumption in order to meet customers requirements.

Scope of Logistic Management
It is responsible to plan for, implement and control a) Inbound merchandise from offshore and domestic vendors to the warehouse. b) Replenishment of stores by both warehouse operations and warehouse. Dr. Ravi to stores c) Cross docking merchandise Shankar or directly to the pack line for direct back orders. d) Outbound small package delivery through zone skipping or vendor drop shipping

Scope of Logistic Management (cont) It is responsible to plan for. Ravi Shankar transfers and retail store ³sends´ directly to the customer. f) Other logistics requirements including warehouse to warehouse transfers. store to store Dr. g) Multi-warehouse logistics . implement and control e) Reverse logistics for single customer returns or to consolidate returns.

. Dr.Definitions of Logistic Management According to Philip Kotler: Logistics as planning. implementing and controlling the physical flows of materials and finished goods from point of origin to point of use to meet the customers need at a profit. Ravi Shankar According to Martin Christopher: It is a planning process b and an information based activity.

Ravi Shankar flow of materials. work in process. and finished inventory to support business unit strategy.Definitions of Logistic Management According to Bowersox & Closs: It includes the design and administration of system to control the Dr. .

3.Goals of Logistic Management 1. 2. Increased Efficiency Improved Customer Service Dr. 4. Ravi Shankar Increased Sales Improved Relationship .

payment and delivery terms. .Logistic Functions 1. Order checking for any deviations in agreed or negotiating firms. Prices. 5. 2. Acknowledging the order. Ravi materials in stocks. 4. Order Processing: 1. Checking the availability ofShankar Dr. indicating deviations if any. 3. Production and material scheduling for shortages.

costs is as low possible.Logistic Functions 2. . Inventory Management: It is maintaining the requisite inventory stocks to meet customer requirement while simultaneously ensuring that its carryingRavi Shankar as Dr.

Number of warehouses Dr. Ownership of the warehouse .Logistic Functions 3. 1. Warehouse layout 5. Ravi Shankar 3. Size of the warehouse 4. Design of the building 6. Location of warehousing facilities 2. Warehousing: It is the storage place wherein finished goods are stored till they are sold.

Dr.Logistic Functions 4. Information . Ravi Shankar 5. Transportation: For movement of goods from the supplier to the buyer and the goods are physically moved to the customer place. Material Handling and storage system 6. Logistical Packaging 7.

Ravi Shankar on the interstate stock transfers. Consignment Tax: It is a measure to collect tax even Dr.Logistic Functions Role of Government Central sales Tax: It is a tax on interstate commodity sales in situations where there is a resale in the receiving state. .

Dr. Octroi and Entry Taxes: It is levied before goods entre a city or state. Ravi Shankar .Logistic Functions Role of Government Excise Duty: It is payable when the product leaves the factory.

parts and service support and costs of return goods handling. . Dr. Transportation Costs: It is determined by the activity of transporting goods.Logistics Costs 1. Ravi Shankar 2. Customer Service Level: It includes the costs of order fulfillment.

Logistics Costs 3. Transportation Costs: It is determined by the activity of transporting goods. Warehousing Costs: These costs are due to warehousing and storage activities n also due to warehouse and plant location selection process Dr. . Ravi Shankar 4.

Dr. 6. Ravi and scrap It is made up of capital or opportunity costs. inventory service costs.Logistics Costs 5. storage space costs and inventory risks costs . Inventory Carrying Costs: It include inventory control packaging and salvageShankar disposal. Lot Quantity Costs: These costs are due to procurement and production lot quantities.

Procurement Dr. Ravi Shankar Warehousing Costs: Warehousing & storage. Logistics Communication.Total Costs Concepts Place/Customer Service Levels Customer service. Demand Forecasting's . Plant & warehouse site selection Order Processing & Information Costs: Order Processing. Return goods handling Inventory carrying costs: Inventory Management. Packaging. Reverse Logistics Transportation Costs: Traffic and transportation Lot Quantity Costs: Materials handling. Parts & service support.

8. 3. 2. Product inventory at source Pipeline Inventory Product Inventory at warehouses and dealers Transit losses/Insurance Dr. 6. 7. Ravi Shankar Storage Losses/Insurance Handling and Warehouse Operations Packaging Transportation .Total Logistics Costs 1. 4. 5.

Ravi Shankar .Models in Logistic Management 1. Dr. Forecasting Models: It allow prediction of demand based on past data or other parameters.

Ravi Shankar transportation costs and infrastructure costs at the location . Mathematical Programming Models: are as follows: a) Location Models: It helps in planning the optimal location of plants or warehouses.Models in Logistic Management 2. considering the inbound and outbound Dr.

helps in optimally It Ravi Shankar allocating commodities from sources to destinations in a multisource. multi-destination environment. Mathematical Programming Models: are as follows: b) Allocation Models: Dr. .Models in Logistic Management 2.

location of warehouses and sometimes even the transportation mode choice. . deciding between a two.Models in Logistic Management 2.Ravi Shankar Dr. three or even four stage network. Mathematical Programming Models: are as follows: c) Distribution Network Design Models: It is comprehensive in nature.

Ravi Shankar network from a given source to a destination . Inventory Models: Economic Order Quantity 4.Models in Logistic Management 3. Routing Models: It allow optimal routing on a transportation Dr.

It help to evaluate appropriate rules for Dr. Ravi Shankar allocation. Scheduling Models: It enables allocation of resources to particular activities. [ .Models in Logistic Management 5.

Warehouse Means any building structure or other protected enclosure which is used or may be used for the purpose of storing goods on behalf of the depositors but does not include cloakrooms attached to hotels. Dr. Ravi Shankar railway stations and the premises of other public carrier alike. .

Consolidation PLANT A PLANT B PLANT C Consolidation Warehouse A B C .Warehouse Economic Benefits a.

Break Bulk and Cross Dock Customer A PLANT A Consolidation Warehouse Customer B Customer C .Warehouse Economic Benefits b.

Assortment .Warehouse Economic Benefits c. Spot Stock b. Stockpiling Service Benefits a. Processing/Postponement d.

Types of Warehouse 1. The actual firm may be owned or leased . Private Warehouse It is operated by the firm owing the product.

Intangible Benefits .Types of Warehouse Benefits of Private Warehouse 1. Flexibility 3. Cheaper 4. Control 2.

General Merchandise 2. Refrigerated Warehouses 3. Commodity Warehouses 4. Household Goods and Furniture warehouses . Bonded Warehouses 5.Types of Warehouse Public Warehouse It is used in logistical systems Types of Public Warehouses 1.

Financial Perspective 2. Flexibility 3. Transportation . Scale Economies 4.Types of Warehouse Benefits of Public Warehouse 1.

Types of Warehouse Contact Warehouse It is a combination of both public and private warehouses .

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