PRESENTED BY- KAMAL SONI

INMANTEC, Ghaziabad

1
 Logistics is 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.“

Council of Logistics
Management
2
Subdivisions of logistics management

Business Logistics
•
•Procuring, moving and storing of R/M and
transporting, warehousing and distribution of F/G

•Facilitation of relevant manufacturing and

marketing

• Making finished goods available to the customers

in the market
3
• Procuring, moving and storing of agricultural
products
• Providing competitive edge in commodities
market
 Event logistics - The net work of activities,
facilities and personnel required to organize,
schedule and deploy the resources for an event to
take place and to efficiently withdraw after the
event

4
 Service logistics - the acquisition, scheduling
and management of the facilities/assets, personnel
and materials to support and sustain a service
operation
 Military logistics - design and integration of all
aspects of support for the operational capability of
the military forces [deployed or in garrison] and
their equipment to ensure readiness, reliability and
efficiency
5
6
Logistical mission

Achievement of business objectives at minimum

logistical cost [delivering- QCD expectations of
customers at minimum logistical costs, i.e. creating
customer value at minimum cost

• Set of goals to be achieved at a particular type of

market responsive to competition
7
• Mission focus is on out put of the system
• Logistics Mission is achieved by ‘single plan’
for the entire organization
• Mission of logistics is providing a means by
which customer satisfaction is achieved

8
Inbound logistics

•Procurement operations in procurement cycle

• potential avenues for reducing systems costs

• value of inventory is low

• trade off between cost of maintaining inventory in

transit and low cost transport exists

9
 Order
Sourcing placement
& expediting

Vendor
(Supplier)

Receiving Transportation

10
Outbound Logistics
• Value added goods are to be made available in
the market distributed through the network of
warehouses and retailers’ shops

•Value of the inventory is very high as during

conversion value is added

11
 Activities in distribution performance cycle

Order Order Customer

processing transmission order

Order Order Customer

selection transportation delivery

12
13
Logistical cost analysis
Conventional Approach
• Focus on function

•Conventionally costs of logistical functions are

apportioned

• Impact of decisions at function level on the system is

not considered

• Cost information tends to get hidden out of fear that

it may highlight functional weakness
• Cost in no man’s land is never owned
14
• Cost cutting is fragmented so doesn’t reduce
system cost

•Customer dissatisfaction, competitive edge is

lost by the organization

15
 Total cost approach
Modern approach to logistical costing
• Focus on reduction of cost of output of the
system [product delivery to customer]

• Provides competitive edge to the company

• Reveals several trade off points in the system &
further areas of improvement
 Transportation - Inventory
 Warehousing – Customer service
FTL/LTL and cost of transportation
FTL/LTL and cost of inventory

16
 Different logistics
performance
objectives

Order winners Order qualifiers

are factors that directly are factors that are
and significantly help regarded by the market
products to win orders in as an ‘entry ticket’.
the marketplace. Unless the product or
Customers regard such service meets basic
factors as key reasons for performance standards, it
buying that product or will not be taken
services. seriously.
 PRICE

LOGISTICS

PRODUCT

MARKETING

PROMOTION

PLACE

18
Interface with marketing
• A common wall, surface or area with another
body, concept or function - area of common
interest or concern

• Four Ps of marketing and logistical interface

• Price - marketing can re offer the price to beat
the competition with superior logistical support

• Product & Packaging- size shape &

weight/volume ratio of the product has major
impact on logistical cost 19
Promotion - promotional strategies of marketing
need to be decided by working closely with
logistics

Place - whether to distribute through wholesalers

or through retailers is a marketing decision with
impact on logistics

Customer Service - another area of interface

between marketing & logistics
20
 Interface with
operations
SHORT RUNS

LOGISTICS

SEASONAL
DEMAND

OPERATIONS

SUPPLY SIDE
INTERFACE

PACKAGING

21
Interface with operations

*Short production runs

• Very strong logistical support is needed to
operate Just In Time
•Short runs lead to inventory reduction
* Seasonal demand
• Inventory should be mutually accepted
* Supply side interface
• Prevent shortages
* Packaging
• Protective packaging
• Third party alternatives
22
Role of planning in logistics management

• Role of planning is central to logistics

management

• Mission of logistics is to achieve

desired levels of service and quality at lowest
possible cost.

• Logistics makes one plan, that replaces

traditional concept of planning in pockets

23
 What can Logistics do?

HIGH SERVICE SERVICE &

LEADER COST LEADER Whom
shall I
buy
from?
S
E OK HAPPY
R OK HAPPY
COST LEADER
V COMPANY
I
C CUSTOMER
E

SAD OK
LOW

COST LOW
HIGH

24
Attributes of Logistics Department
# Scope is wide spread- functions of logistics are
spread across various stages of value chain in the
organization
# Provides interface between marketing and
customers, marketing and operations, operations
and supplier
# Provides competitive edge to business in the
current environment
# Handles flow of information and materials
# Large avenue for cost reduction

25
26