Logistics Planning and Strategy

Logistics Planning and Strategy L T P C

3 0 0 3

Pre-requisites/Exposure 12th level; Students should have basic concepts of logistics & supply chain

Co-requisites Students should have basic analytical, logical skills and hands on in Excel
Course Objectives
• To understand how Logistics, Supply Chain, Operations, Channels of
Distribution fit in to Business viz., Manufacturing, Service and Project.
• To understand how Warehouse Management and, other functions in
Logistics fits into Logistics & Supply Chain Management.
• To help students to analyze situations, set objective(s) and means
(strategy and planning) to achieve the objective(s) in LSC domain.
Course Outcomes:
On completion of this course, the students will be able to

• CO1. Understand the business, business models, business strategy,

business environment, infrastructure, regulations
• CO2. Apply the concepts of logistics and supply chain strategy to
connect with business strategy.
• CO3. Analyse the complex business situations to achieve the logistics
and supply chain objectives through strategy and planning.
• CO4. Integrate the logistics strategy and planning concepts for business
problem solving
Catalog Description

• This course will give exposure to the students of the rationale behind
operations.
• It will give why logistics operations have to be done in the way it is
done now and why it should not be done in any other way.
• The logic behind leaves the student to adopt themselves and be
flexible keeping in line with the logistics and supply chain strategies.
Course Content
UNIT-1 (8 HR)
INTRODUCTION TO LOGISTICS PLANNING & STRATEGY
• Business Organizations and Economic Value creation. Basic activity
sets in Operations Management, Materials Management and Physical
Distribution. Evolution of integration and, Logistics Management and
Supply Chain Management. Various perspectives of Logistics &
Supply Chain Management
UNIT-2 (10HR)
BROAD FRAMEWORK FOR LOGISTICS PLANNING AND STRATEGY
• Framework for Logistics & Supply Chain Strategy formulation.
Framework of integrated planning and activity sets. Customer
Satisfaction: Fill Rates and On-Time-Delivery. Transportation
Configurations and Costs. Warehousing Cost: Own and Outsourcing
the facility
UNIT-3 (1-HR)
BASICS OF WAREHOUSING AND SOPS
• Need, Basic Functions, Activity Triggers and Classification.
Warehousing Decisions – Ownership, Number, Location and Design.
And SOPs such as Stock Verification, ABC Analysis and FSN Analysis
UNIT- 4 (8HR)
VEHICLE ROUTING PROBLEM
• Clark-Wright Savings Matrix. Vehicle Routing Problem with Backhaul
Option. Time Dependent Variable Vehicle Routing Problems
Modes of Evaluation: Written Examinations (Mid Semester and
End Semester), Internal Assessment (Assignment and Quiz)

Components Written Examination Internal Assessment

Mid Semester End Semester Assignment Quiz

Weightage (%)

20 50 15 15
UNIT-1 (8 HR)
INTRODUCTION TO LOGISTICS PLANNING & STRATEGY
• Business Organizations and Economic Value creation.
• Basic activity sets in Operations Management, Materials Management
and Physical Distribution.
• Evolution of integration and, Logistics Management and Supply Chain
Management.
• Various perspectives of Logistics & Supply Chain Management
Meaning of Business
• Business is an Economic activity which involves regular production and or exchange of
goods and services with the main purpose of earning profits.
• According to Urwick and Hunt, “Business is any enterprise which makes, distributes, or
provides any article or service, which other members of the community need and are
able and willing to pay for profit.
• Business comprises all profit seeking activities and enterprises that provide goods and
services necessary to an economic system.
CHARACTERISTICS OF BUSINESS

• Dealing in goods and services.

• Profit motive
• Regularity of transaction
• Element of risk
• Consumer satisfaction
• Social activity.
Business Organization:

• According to Stephenson, “Business Organization generally refers to operation

and control of trade or any similar business.

• According to William H. Hevoman, “Business organization means leadership,

control and directing the joint efforts of some people made to achieve a common

objective.”
Characteristics of Business Organization:

• Group of People
• Pre-determined Aims and objective
• Co-ordination and co-operation in the working of various persons
• Arrangement of various resources
• Direction, operation and control of business activities
• Delegating authority according to responsibility
Aims and objectives of business Organization:

• To achieve pre-determined aims

• To increase the efficiency of business
• To establish the co-ordination among various department
• To receive benefit of specialization
• To establish harmonious relation between labor and capital
• To use country resources for the benefit of the country
• To fulfill social obligation
• To get maximum production at minimum expenses
Functions of business Organization

• Functions related to Production

• Functions related to Marketing and Distribution

• Functions related to Management of Finance

• Functions related to Human Resource Management

Importance of Business Organization

The Significance of business may be classified into the following four

categories namely :
• Significance to National Economy
• Significance to Business itself
• Significance to Community
Significance to National Economy :
• Optimum and profitable use of resources.
• Balanced industrial growth.
• Source of national income.
• Faster economic growth in the country
• Contributes of national prosperity.
• Better utilization of human resources.
• Increase in the standard of living of the people.
• Source for meeting import requirements.
• To meet the obligations of development planning.
• Larger creation of employment. Eradication of poverty.
• Capital formation.
• Development of labor and capital markets.
Significance to Business itself

• Large scale production and efficient distribution.

• Creation of healthy competition.
• Fulfillment of social responsibility.
• Decrease in the cost of production.
• Helps to develop managerial skill.
• Greater utilization of production capacities.
• Development of the undertaking.
• Profitable sales volume.
• Specialisation in production
Significance to Community

• Uplifts the standard and quality of life.

• Development of labor markets.
• Human prosperity.
• Creation of employment.
• Creates habits of saving.
• Provides goods and services at reasonable prices.
• Advantage of form, place, time and possession utilities.
Forms of Business Organisation

• Sole Proprietor
• Partnership Firm
• Joint Hindu Undivided Family
• Joint Stock Company
• Co-Operative Society
SOLE PROPRIETORSHIP

• A Sole Proprietorship consists of one individual doing business.

• He invests money in the business and manages the operations, bears
the risks involved and enjoy the profit ad loss of the business.
• He has the sole authority to take decision regarding the business.
• J.L. Hanson: “A type of business unit where one person is solely
responsible for providing the capital and bearing the risk of the
enterprise, and for the management of the business.”
CHARACTERISTICS

• Sole Possession
• Full Control
• Bearing whole Profit/Loss
• Infinite Liability
• Less Regulation
• No Separate Entity
• Limited resources
ADVANTAGES

• Easy to Form and Dissolve

• Directly Motivated
• Complete Control
• Maintenance of Secrecy
• Quick Decision-Making
• Individual Dealings
• Fewer Regulations
• Low start-up costs
• No corporate taxes
DISADVANTAGES

• Faulty decisions
• Limited resources
• Unlimited liability
• Limited life
• Limited managerial skills
• Unsuitable for big businesses
PARTNERSHIP

• Partnership‟ is an association of two or more persons who pool their

financial and managerial resources and agree to carry on a business
and share its profit.
• Section 4 of the Indian Partnership Act, 1932 defines partnership as
“the relation between persons who have agreed to share the profits
of a business carried on by all or any of them acting for all.”
CHARACTERISTICS
• Least Two Persons to form partnership
• Contractual Relationship
• Involvement in Profits and Business
• Legitimate Business
• Principal Agent Relationship
• Unlimited Liability
• Registration is not compulsory
• Quick decision