1 Introduction | Logistics | Warehouse



Vijay Parekh
(B.Tech (IIT), M.S. Univ. of Wisconsin USA)


Activities involved in getting the product to consumer in case of a manufacturing company
Product Returns Customer Raw material from vendor

Inward Store

Retail Stores

To the Production Floor

Distribution Centres

In Production Packaging Labelling

Finished Product Warehouse

Logistics Organization

Logistical Operations Procurement Manufacturing Quality Control Material handling Accounts

Logistical Resource planning Market forecast Order processing Capacity plan Finance plan

Logistical support Packaging Inventory control Warehousing Transportation


• • • a) b) Total marks: 100 Terminal exam: 60 Internals: 40 Project – 20 Class participation – 15; Team - 10, Individual – 5 c) Attendance – 5

Class Participation • • • • Summary / Recap Class question/answers Quiz Contributions .individual Example Highest points 100 by Team 3 = 10 80 points Team 6 = 80/100*10 = 8 marks .

Lemay & Hanna Coyle. Logistics Management. Supply Chain Management • • • • • Donald Bowersox & David Closs (Text Book) Martin Christopher Bloomberg. Langley Edward Frazelle .Reference Books Title: Logistics. Bardi.

Development of Logistics .

look after its needs appropriately and prepare for every phase of the campaign. 900 AD defines Logistics in his book „ Tactics. supply it with battle equipment.Military beginning of Logistics Emperor Leon VI. the Book of Military Science‟ as “To pay the army. suitably arm & organize it.” Military officers had a title of „Logistikas‟ .

What aspects should be included in a short Battle Logistics? .

Battle Logistics Goals  Personnel  Provisions  Arms & ammunition  Transportation  Communication  Medical facilities  Evacuation  .

Logistics Science & Creativity Logic + Artistic = Logistics Combine traditional work areas into integrated & innovative strategies .

Battle Logistics         Goals : aggressive. retreat . extent Personnel: number. backup Medical facilities: doctors. water. skills. fuel tankers Communication: 2 way. uniform Arms & ammunition: type. defensive. nurses. medicines Evacuation: wounded. rank Provisions: food. number. matching and in working condition Transportation: to move people & armaments.

Logistics and War War between Armies: the army with better logistics wins  Field Marshal Rommel beats the Allies in Africa due to superior logistics – „Desert Fox‟ War between Companies: the company with superior logistics wins  Likewise logistics is the bed rock of trade & business. Take away logistics support and trade & business would collapse .

Competitive Advantage How does a company differentiate itself from competitors? .

3Cs Triangular Linkage Need Satisfaction at acceptable cost Customer DIFFERENTIATION Company Assets & Utilization Competitor Assets & Utilization .

Logistics Ensures Future Leadership Future Leader Cost Leadership Service Leadership .

Productivity Advantage Volume Cost Per Unit .

Cost Leadership  Lower cost of production due to greater volume  Fixed costs spread over greater volume  Experience curve .

installation  . Service Differentiation: Delivery: time. location  Financial: payment terms & ease  Responsiveness: speed.Service Leadership Customers buy benefits (satisfaction) not only services or products. demo.

Council of Logistics Management (CLM) Defines logistics as: The process of planning. implementing and controlling the efficient. effective flow and storage of goods. services and related information from point of origin to point of consumption for the purpose of conforming to customer requirements .

information and …… between consumers & suppliers Edward Frazelle .Logistics is the flow of material.

information and money between consumers & suppliers Edward Frazelle .Logistics is the flow of material.

recycling.Logistics – Key Activities • • • • • • • • • • Demand Forecasting Obtain orders from customer Procurement Material handling Warehousing & storage Inventory management Transportation Reverse logistics: salvage. disposal Customer service Information management .

Plowman views business logistics as the integrated management of: * pre – production or in-bound factors * post – production or out-bound factors .Dr.

Cradle to Grave .Cycle Management Logistics management throughout the entire system or product life cycle.PLM – Product Life .

The 7 Rs of Logistics Effectiveness Right Cost Right Item Right Time Right Customer Right Place Right Condition Right Quantity .

Essentially 1. accurate interpretation of customer requirement: market survey.g. low rejection / wastage e. no damage or deterioration in transport: e. understanding e.g. analysis. efficiency to minimize cost: planning. speed of execution. polyester 2. Pratap exports 4.g. spent radio active material 3. expiry . precise execution: vendor – process – customer from point of origin to point of requirement & in some cases point of disposal – medical.

Goal To achieve targeted level of customer service at the lowest possible total cost .Logistics .

Cost Elements / Key Activities of Logistics of a Manufacturing Organization LOGISTICS .

optimize.Logistics Master Planning LMP • Investigate: describe. apply best practices • Implement: systemize. measure. automate. people friendly Implement Investigate Innovate . benchmark • Innovate: simplify.

Operating Objectives Of Logistics Rapid & Consistent Response Minimum inventory Reduction in overall operations cost Efficient after-sales services .


Logistics Planning & Organization LOGISTICS .

inventory.Logistics planning • Goals • Strategic plans: long term – product identification. alliances (JV / M&A) • Tactical plans: facility location. finance. accounts. customer service LOGISTICS . production. transportation analysis • Operational plans: procurement. finance. production capacities.

Logistics Organization Characteristics • Flatter • Process integration • Information networked • Empowered employees • Logistics positioned higher up in the organization structure LOGISTICS .


•Inventory reduction Service excellence •Reliability •Less lead time • JIT •Responsive Very hard to compete with •Distinct value •Cost competitive •Customization . •Commodity or only cost difference •Re-engg •Integration with supplier •Asset utilization.Value Differentiation Economic value in a product or service: Commodity Market Cost Leader Service Leader Cost & Service Leader Cost Adv.

Mumbai to Baroda Mode Air Train Carrier Ticket Price Time IA 1250 50 mins Rajdhani 650 5 hours .

Mumbai .Baroda Mode Carrier Price Travel time Time to airport Before departure Air IA 1250 + 250+100 50 mins 11/2 hours 1 hour Train Rajdhani 650 + 50 + 25 5 hours ½ hour 10 min Exit airport 20 min Baroda to destn 45 min Total Time 41/2 hours 10 min 15 min 6 hours .

Mumbai to Bhavnagar Mode Air Carrier Cost Total cost IA 1200+250+100 1550 Train Ist or AC chair Guj. Mail + Saurashtra Expr 600+400+50+25 1075 Travel time Other time Total time 1 hour 31/2 hours 41/2 hours 8+2+4 = 14 hours 1 hour 15 hours .



Supply Chain Management in a Manufacturing Plant Receiving and Inspection Raw Materials. Parts. Packaging. And Shipping Materials Management Purchasing Production Control Warehousing and Inventory Control Shipping and Traffic Physical materials flow Information flow Customers Suppliers . and In-process WareHousing Production Finished Goods Warehousing Inspection.

Logistics Science & Creativity Logic + Artistic = Logistics Combine traditional work areas into integrated & innovative strategies .

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