INTERNATIONAL LOGISTICS MANAGEMENT

PROF.DR.C.ANBALAGAN
PROFESSOR OF MBA
SCHOOL OF MANAGEMENT SCIENCES
K.L.UNIVERSITY,GREEN FIELD
VADDESWARAM,GUNTUR-DT
ANDHRA PRADESH

DEFINITION OF INTERNATIONAL LOGISTICS

According to The Council of Logistics Management,
“International Logistics is the process of Planning,
Implementing and Controlling the flow and Storage
of Goods, Services and related information from a
point of origin to a point of Consumption located in
a different Country.”
DECISIONS IN LOGISTICS MANAGEMENT
the various decisions in Logistics management
that need examination for an integrated
systems are,
1. Product Design
2. Plant Location
3. Choice of Markets/ Sources
4. Productions Structure
5. Distribution/Dealer Net works Design
6. Location of Ware Houses
7. Plant Layout and Logistics
8. Allocation Decision
9. Production Planning
10. Inventory Management-stocking level
11. Transportation-mode choice
12. Shipment Size and Routing design
13. Transport Contracting
14. packaging
15. Materials handling
16. Warehouse Operations
 ROLE OF GOVERNMENT
The Government plays a significant role in logistics.
Some of the important Legislation that affect
Logistics are,
1.Central sales tax and Local Sales tax
2.Consignment tax
3.Excise Duties
4.Octroi and Entry Tax
5.Use of Packaging materials
6.Motor Vehicles Act and similar Acts for other
modes
7.Distribution Policies
 CLASSIFICATION OF LOGISTICS APPLICATION

1. Decision –wise
2. Actor-wise
3. Inbound and Outbound Logistics
4. Private Vs Public Sector
5. Single of Multiple Plants
6. Nature of Product
7. Made to Stocks Vs Made to Order
 TOTAL LOGISTICS COST
1. Important element of Logistics product inventory
at sources
2. Pipeline inventory
3. Product inventory at warehouses and dealers
4. Transits Losses/Insurance
5. Storage Losses/insurance
6. Handling and warehouse operations
7. Packaging
8. Transportation
9. Customer shopping
 MODELS IN LOGISTICS MANAGEMENT
1. Forecasting Models
2. Mathematical Programming Models
Location-allocation model-distribution network
designing model

3. Inventory Model
- inventory vs. transportation cost
- Inventory vs. stocks out cost
- inventory vs. spoilage and material handling costs
4. Routing Model
5. Scheduling Model
6. Alternative Analysis
 LOGISTICS AND INFRASTRUCTURE
1. Right of way
2. Vehicle
3. Motive power
4. Terminals
5. Operations/systems
 SUPPLY CHAIN MANAGEMENT
DEFINITION
According to Mentzer supply chain management is
defined as “ the systematic strategic coordination of
the traditional business functions and the tactics
across these business functions within a particular
company and across business within the supply
chain for the purpose of improving the long-term
performance of the individual companies and to
supply chain as whole”.
The supply chain encompasses all activities
associated with the flow and transformation of
goods from the raw materials stages through to the
end user as well as the associated information flows.
Materials and information flow both up And down
the supply chain.

“Supply chain management(SCM) is the integration

of these act5ivities, through improved supply chain
relationships, to achieve a sustainable competitive
advantages”
OBJECTIVES OF SC

1. to achieve supply channel process goals that will

more the firm toward its overall objectives.

2. the desire to develop a logistics activity mix that

will result in the highest possible return on
investment over time.
3. two dimensions to the goal a). The impact of the
logistics system design on the revenue
contribution and b). The operating cost and capital
requirements of the design.
 SCOPE OF MODERN SUPPLY CHAIN
Company

Suppliers customers

Supplier’s suppliers customers/end users

 Global supply chain management

Global supply chains pose challenges regarding both quantity and

value:
1. Supply and Value Chain Trends
2. Globalization
3. Increased cross border sourcing
4. Collaboration for parts of value chain with low-cost providers
5. Shared service centers for logistical and administrative functions
6. Increasingly global operations, which require increasingly global
coordination and planning to achieve global optimums
7. Complex problems involve also midsized companies to an increasing
degree,
 CHANNEL STRUCTURE
Business and Supply Chain Channel Strategy
supply chain initiatives are optimized to meet various channel
strategies. The differences between channels of distribution, such as
specific customer or product needs, can have a major impact on
supply chain solutions. In developing improved channel strategies,
1. Articulation of contributions from different customers and
customer groups, perhaps through cost to serve analysis.
2. Gaining clear direction as to how to achieve optimum profitability
from different channels
3. Ensuring service alignment to meet profit objectives
4. Creating cost alignment to meet profit objectives
A review of distribution channel strategy can often highlight
opportunities for shared distribution. Many companies have
shied away from this in the past , fearing a loss of cost and
service differentiation in the market place, but attitudes are
now changing.
Logistics Bureau have undertaken a number of reviews
recently that have assessed the potential benefits of
competitors sharing distribution facilities and/or delivery
transport. This type of work is undertaken within a strict set
of agreed boundaries to ensure that each companies
information is handled with the appropriate degree of
confidentiality.
 Channels
A number of alternate 'channels' of distribution may be
available:
1. Distributor, who sells to retailers,
2. Retailer (also called dealer or reseller), who sells to end
customers
3. Advertisement typically used for consumption goods
 Managerial concern

1. Channel membership
2. Channel motivation
3. Monitoring and managing channels
 marketing channel
1. Intensive distribution - Where the majority of resellers
stock the 'product' (with convenience products, for
example, and particularly the brand leaders in consumer
goods markets) price competition may be evident.
2. Selective distribution - This is the normal pattern (in both
consumer and industrial markets) where 'suitable' resellers
stock the product.
3. Exclusive distribution - Only specially selected resellers or
authorized dealers (typically only one per geographical area)
are allowed to sell the 'product'.
 Supply chain management problems

Supply chain management must address the following

problems:
1. Distribution Network Configuration: number, location and
network missions of suppliers, production facilities,
distribution centers, warehouses, cross-docks and customers.
2. Distribution Strategy: questions of operating control
(centralized, decentralized or shared); delivery scheme, e.g.,
direct shipment, pool point shipping, cross docking, DSD
(direct store delivery), closed loop shipping; mode of
transportation, e.g., motor carrier, including truckload,LTL,
parcel; railroad; intermodal transport, including TOFC (trailer
on flatcar) and COFC (container on flatcar); ocean freight;
airfreight; replenishment strategy (e.g., pull, push or hybrid);
 continuous
3. Trade-Offs in Logistical Activities: This activities must be
well coordinated in order to achieve the lowest total
logistics cost. Trade-offs may increase the total cost if only
one of the activities is optimized. For example, full truckload
(FTL) rates are more economical on a cost per pallet basis
than less than truckload (LTL) shipments.
 continuous
4. Information: Integration of processes through the supply
chain to share valuable information, including demand
signals, forecasts, inventory, transportation, potential
collaboration, etc.
5. Inventory Management: Quantity and location of
inventory, including raw materials, work-in-progress (WIP)
and finished goods.
6. Cash-Flow: Arranging the payment terms and
methodologies for exchanging funds across entities within the
supply chain.
 Developments in Supply Chain Management

1. Creation Era
2. Integration Era
3. Globalization Era
4. Specialization Era—Phase One: Outsourced
Manufacturing and Distribution
5. Specialization Era—Phase Two: Supply Chain
Management as a Service
6. Supply Chain Management 2.0 (SCM 2.0)
 Components of SCM
1. Planning and control
2. Work structure
3. Organization structure
4. Product flow facility structure
5. Information flow facility structure
6. Management methods
7. Power and leadership structure
8. Risk and reward structure and
9. Culture and attitude
"Given the current economic conditions, the emphasis has shifted back
to cost reduction, with particular emphasis being focused on the area
of strategic sourcing, as 81 percent of [North American] firms and 73
percent of those in Europe indicate they will be rethinking sourcing
points," according to the key findings.
In MFG.com's MFGWatch Survey earlier this year, 64 percent of
industrial professionals said they prefer to source with North
American manufacturers, while 19 percent of respondents favor China
for their sourcing needs and 7 percent conduct their sourcing business
in Europe. The remaining 10 percent source in South America, Africa
and other countries. Prime Advantage Group Outlook Survey found
that 80 percent of industrial manufacturers agreed that the level of
direct goods they purchase from U.S.-based vendors over the next 12
months will either stay the same (52 percent) or rise (28 percent).
For non-U.S.-based vendor purchases: 66 percent
said they will look to China as their low-cost country
of choice; 14 percent said they will look to Mexico; 5
percent said they will look to India; and 15 percent
said they will look outside these three locations.
According to Prime Advantage's findings, top
sourcing concerns for the second half of 2009
include focusing on such business process issues as
cost savings and efficiency measurement (36
percent), followed by managing costs of raw
materials (32 percent) and components (31 percent).
Following a review of overall responses, the 2009 Global Survey of
Supply Chain Progress offered the following calls for action as firms
move forward with their supply chain sourcing efforts,
1. Don't let the drive to overcome poor economic conditions destroy
good work that went into supply chain collaboration and supplier
relationships. When looking for savings in the market, work with
suppliers who show an inclination to seek mutual values. They need
new savings as much as the buyers, and the best results often come
from a joint effort to reduce mutual costs.
2. Use the downturn as an opportunity to find new values by
collaborating with network partners. CSC's report provides strong
evidence that supply chain leaders simply do not accept economic
conditions as an excuse for poor performance and are hard at work
finding the next level of savings in their supply chains. Rather, they
have taken a proactive approach to working with important network
constituents to find new values.
3. Take a lead from the European respondents and use post-sales
support for customers as an example of how to enhance relationships
with key customers. Dig into the source problems and reduce the need
for returns, repairs and maintenance.
4. Rid the firm of the technology paradox. While only 46 percent of
respondents said technology enablement (i.e., applying technology to
the supply chain management effort to create added value) is helping,
leaders have demonstrated that a close working relationship between
supply chain professionals and IT and the CFO yield superior results.
5. Although greater attention is being applied to lessons learned from
past failures and analyzing root causes for failure, risk management is
no closer to where it should be across supply chains. It's time to have
an understanding of the potential supply chain risks and have a
contingency plan ready for action when problems are encountered.