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Volume 1

Issue1

Inaugural Issue

January 2000

Directors Message.
It gives me immense pleasure in inaugurating "Logistix", the e-Newsletter of the
Centre for Logistics and Transportation Management at XLRI. With the launch of
"Logistix", a new leaf of professional and academic excellence has been put in place
at XLRI on this first day of the coming Millennium. While I congratulate Prof.
Vijayaraghavan for his pioneering work in developing and implementing such a
concept at XLRI, I wish him and the Centre he initiated all success. Bob Mingie, in his
notes on Continuous Learning, Culture, and Organizations, says, "in a time of drastic
change, it is the learners who inherit the future. Those who have stopped learning find
themselves equipped to live in a world that no longer exists". "Logistix" is going to be
that tool for continuous learning of large number of professional logisticians. May this
newsletter serve as a beacon for the professional world that is concerned with the
development of knowledge, concepts and methods that aim at the attainment of cost
efficient time and place utility.
Thomas P.D., S.J.

From the Editor's Desk.


Logistics is the collective name for a variety of activities with the
common goal of creating time and place utility for goods and services.
Industry and even we in our own every day lives perform a wide range
of these activities. Logistics is young as an academic discipline and has
its methodological and theoretical roots in the fields of mathematics,
engineering and business administration. The discipline is concerned with
the development of knowledge, concepts and methods aimed at the
attainment of cost efficient time and place utility.
Creating time and place utility is most frequently associated with the
need for effective transportation. However, transportation is only one of the many considerations
for an effective logistics system. The conditions for the attainment of time and place utility are
affected by many different factors. Supply of raw material and components, geographical location
of facilities, inventory management, control strategies in combination with market trends,
demand patterns and service requirements all play a vital role in determining to what extent
transport systems affect time and place utility.

In this Issue ..
3
5
13
19

Inauguration of the Centre for Logistics and Transportation Management


in XLRI
Universities in the Supply Chain for Logistics Managers
Addressing the Logistics Information
Geographic Information Systems-Applications in Marketing and
Distribution

We speak of manufacturing planning and control systems, lead-time reduction, the rationalisation
of financial resources, win-win strategies, Just-In-Time, supply chain management, inventory
management, and information technology. We use mathematical optimisation methods, among
other things, for locating plants and planning of transportation routes. We strive to attain an
understanding of quality in logistic systems and speak of Kaizen and TQM.
We speak of regional and national logistics when we analyse the effects of infrastructure
investments and determine the relevance of logistic systems for regional and national economic
development. The terms green logistics and reverse logistics have recently come into use as we
fumble our way towards an increased awareness of the extensive environmental problems which
the future holds for us. With the advent of e-Commerce, the business logistics may have to be
redefined to integrate the role of Information Technology in logistics. We consider logistics to be
an important area of study where increased knowledge can contribute not only to the creation of
competitive companies in an international market but also contribute to a society which tackles
the challenges of the future in an effective, resource conscious and environmental-friendly
manner.
The search for competitive advantage has lead to greater quality consciousness and the need for
cost effectiveness. The global nature of businesses now in the era of liberalisation has forced the
companies to recognize the critical role of logistics in todays marketplace. As companies are
advancing professionally in production, marketing and finance, a greater attention is required in
achieving customer satisfaction through effective logistics. Advancement in the Information
Technology would enhance this process further and logistics would become an integral part of eCommerce and e-Business. It is quite possible that some of the sub function of logistics
management would need a redefinition in the wake of IT-emergence. Most of the Order
Processing and Order Tracking would now be electronically done with the Internet/Intranet and
EDI/EFT technologies.
Some of the major issues in India are
The potential cost reduction and service level improvement through reduced regulation, logistics
should evolve as a function adapting the growing communications and computing technology,
factors affecting customer satisfaction directly by logistics , significance of logistics related costs
as a proportion of value added and important decision areas to reduce and/or improve customer
service, co-ordination of logistics function in industries along with production and marketing for
inbound and outbound logistics and importance of logistics in the overall supply chain
management, policies and regulations that inhibit smooth product flow and privatisation of
infrastructure developments and implementation, problems & issues in public sector transport
organisations across all modes viz. Road, Rail, Shipping, Air etc. and privatisation problems,
unorganised freight industry and related problems
More than the other functions, logistics seems to be catching up with the trend. LogistiX is in
this direction- the first e-Newsletter from XLRI, Jamshedpur to provide a forum for practitioners,
academicians and students to share and gain from each other. The purpose of this e-Newsletter
is to bring out news items, articles, events, conferences/seminar news and everything related to
the field of logistics. We hope to bring out this e-newsletter once in every two months. With the
gaining popularity of the Internet, we hope to reach every interested professional and reader to
be part of this e-newsletter and contribute to the growth of this field. Please feel free to send this
e-newsletter to your contacts and help us update our address books.
T.A .S.V ijay araghav a n

Co o rd inato r, Cent re f o r Log ist ics & Transp o rt at io n Manag ement

LogistiX

INAUGURATION O F THE CENTRE FOR LOGIS TICS AND TRANSPORTATION


MANAGEMENT (CLTM) IN XLRI, J AMS HEDPUR
The Centre was inaugurated on September 26, 1999 by Mr.Varun Jha, Head, ITS, Tata
Steel during the National Seminar on Information Technology held in XLRI,
Jamshedpur.
The Vision
The Centre for Logistics and Transportation Management will provide leadership for
evolving logistics profession through the development, dissemination, and advancement of
logistics knowledge
The Mission

to create a forum for the exchange of concepts and best practices among logistics
professionals through networking of related institutions and professional bodies
to conduct research that advances knowledge and leads to enhanced value for the society
to create a forum for policy review, consult on government initiatives, raise private sector
issues with government, and develop recommendations for both the public and private
sectors
to encourage innovation through co-ordinating research, promoting co-operation in research,
and ensuring excellence in the conduct of research
to develop an understanding of opportunities for improving the efficiency and effectiveness
of systems for managing the movement of materials, products, and people and thereby
developing, defining, understanding and enhancing the logistics process
to foster skills which enable the exploitation of these opportunities through research, training
and consulting
to act as a transportation community network, and provide information by focusing attention
on matters important to the transportation community, other industry sectors and the
general public

Major Thrust
The centre is being established to provide national and international focal point for advanced
teaching, training and research in the field of logistics and transportation. Major involvement of
the centre will be in the development of knowledge in logistics and transportation and to be
recognised as one of the leading centres for advanced research and teaching. The Centre will
provide resource, which encompasses programmes for MBA students and executives, research
and development capabilities, and a continuing commitment to the dissemination of ideas and
knowledge through publications and symposia.
Not e t o t he Cont r ibut ors
Please send your contributions to this e-Newsletter on themes that cover the entire gamut of
Logistics and Supply Chain Management areas. They could be your reflections on various
developments in the field, your own experience which you would like to share with other
professionals, the developments and innovations of yours or your organisation which may
provide a good learning for others, interesting websites on Logistics/SCM in the Internet, new
software in the market, your experience with the ERP implementations and solutions etc. Please
submit them as attachments in your e-mail with a proof of authenticity of your submission, your
name, background, other affiliations and scanned photograph of yours and any events to
Prof.T.A.S.Vijayaraghavan, Editor, LogistiX at cltm@xlri.ac.in

LogistiX

CONFERENCES/SEMINARS NEWS
q

The International Symposium on Product Quality and Integrity (Annual Reliability


and Maintainability Symposium) sponsored by SOLE and eight other technical societies,
Airport Marriott hotel, Los Angeles, CA, January 24-27, 2000. The theme is Advancing the
Technology-A Commitment to Life-long Learning . For details contact: L.M. Rabon-Tel 703806-7827-e-mail: wrabon@erols.com, Charles W.Plotkin, Chair( chair@rams.org ) and/or visit
website: http://www.rams.org

Third International Meeting for Research in Logistics (IMRL-2000): Trois-Rivieres,


Quebec,
Canada,
May
9-11,
2000.
Contact
Annick
Cossette:
e-mail:
Annick_Cosette@UQTR.Uquebec.CA.

Fourth International Conference on Maintenance Engineering Societies (ICOMS2000), sponsored by the Maintenance engineering Society-Australia (MESA), Wollongong,
NSW, Australia, May 23-26, 2000. Contact Professor Richard Dwight: e-mail:
richard_dwight@uow.edu.au.

Tenth Annual International Council on Systems Engineering (INCOSE)


Conference. sponsored by INCOSE, minneapolis, MN, July 16-20, 2000. Contact: INCOSE
Headquarters at Tel: (206) 361-6607 or at incose@halcyon.com.

Annual Industrial Engineering Solutions 2000 Conference, sponsored by the


Institute of Industrial Engineers (IIE), Cleveland Marriott Hotel, Cleveland, OH, May 2124, 2000. Contact Ellen Vagner at tel: (770) 449-0460; fax: (770) 263-8532; or website
http://www.iienet.org.

35th Annual International Logistics Conference And Exhibition (SOLE 2000),


Sheraton Hotel, New Orleans, LA, August 8-10, 2000. The theme is "Logistics: Cornerstone of
the Future." For further information, contact Charles L. Lindgren (tel: 310-364--5971; E-Mail:
clindgren@west.raytheon.com),
Francis
T.
Holmes
(tel:
781-238-2823;
E-Mail:
francis_holmes.rts@raytheon.com), or SOLE Headquarters

Publications Available through the Council of Logistics Management (CLM)


The Council of Logistics Management (CLM) has just released the 1999 Edition of Logistics
Software, available on CD-ROM only ($75 for members and $100 for non-members).
Additionally, the following items may be purchased: 21st Century Logistics: Making Supply
Chain Integration A Reality (1999- $35 for members/$70 for non-members); Growth And
Development Of Logistics Personnel (1999- $35/$70); Keeping Score: Measuring The
Business Value Of Logistics In The Supply Chain (1999- $35/$70); Development And
Implementation Of Reverse Logistics Programs (1998- $35/$70); Logistics: Careers With A
Challenge (30-minute video tape - $35/$35). The Annual Conference Proceedings for each
year (1993-1999) may also be purchased. Contact the Publications Department, Council of
Logistics Management, 3805 Butterfield Road, Suite 200, Oak Brook, IL 60523-1170 (Tel:
630-574-0985).

LogistiX

UNIVERSITIES IN THE SUP P LY CHAIN FOR LOGISTICS MANAGERS


Clyde Kenneth Waiter
From this article's title, you might assume the following statement defines supply chain
management (SCM): "The movement of goods and the co-ordination of demand and supply not
necessarily as activities carried on by or for one firm, but by and for firms at two or more levels
in a channel of logistics."1
The definition certainly seems to fit, but it is from Heskett, Glaskowsky and Ivie's discussion of
comprehensive logistics system design 26 years ago. The pioneers of logistics thought were
developing the area long before it became fashionable.
Joe Andraski, Vice President at Nabisco, a fellow skeptic, asks, Supply chain management?
What's left to talk about? It's been around for 20 or 25 years.... What's missing is management
interest, management commitment and sustainable interest."2
The temptation is to relegate supply chain management to buzzword status or management's
flavor of the month.
Is this too harsh an indictment? No, it is mild compared to the assessment by Jim Thomas of
Distribution magazine, Maybe buzzword is just too simple a term. It does not begin to evoke
the layers of ostentation and confusion that have occurred in industry jargon."3
Perhaps this article can solve some confusion about the supply chain for logistics managers. If
the term does not seem to fit with universities, be patient : another label will be forthcoming
from the next management guru.
A not her Def in it io n
Thomas explains supply chain management (SCM)buzzword or notas "the practice of
controlling all the interchanges in the logistics process from acquisition of raw materials to
delivery to end user. Ideally, a network of firms interact to deliver the product or service.
Although the term supply chain management has been used for years, only a handful of
companies excel in SCM."4
From where will managers familiar with this process come? How will they communicate with the
top management ranks that are becoming interested? While some may move from other
management positions or the ranks of specialists in operating departments (e.g., accounting,
finance, production, sales), the answer lies in university business programs. Yet only a handful of
universities offer logistics-related majors. Evidence supports three strong reasons for universities
to offer logistics programs:
Jobs are available.
Too few graduates major in logistics.
Logistics professionals value education.
Nee d for S CM Courses
High starting salaries for qualified college graduates prove the jobs exist. Tables-1 and 2 show
salary averages for bachelor's degree recipients from a national survey and Iowa State University
(ISU) records respectively.

LogistiX

Table-1 : Salary Offers for Bachelor's Degree Recipients


National Survey
Curriculum
Management information systems
Economics and finance
Distribution management
Accounting
Business administration
Marketing and marketing management
Human resources
Merchandising management

Average
$38,830
$34,043
$33,251
$32,872
$31,437
$29,148
$27,626
$26,796

Source: National Association of Colleges and Employers. Salary Survey, July 1998, p.4

Table-2: Salaries of ISU College of Business Graduates


Curriculum
Management Information systems
Transportation and logistics
Management
Accounting
Finance
Marketing

Average
$38,805
$29,577
$28,607
$28,359
$27,957
$27,297

Source: Career Service, Iowa State University, Annual Report 1996- 97,p.42.
The National average offer for distribution management positions (the category closest to
logistics or supply chain management) was $33,251, behind only management information
systems (MI5) and finance (and ahead of the perennially strong accounting majors).
Iowa State graduates in transportation and logistics trail only MI5 in starting salaries. Is the
supply of qualified applicants sufficient to meet demand? This answer is "no," relative to
graduates with the traditional majors. The Career Services office at Iowa State surveys students
within a year after graduation and asks if they are employed professionally (including military and
graduate school) or still looking.
Table-3 shows that 93 per cent of the transportation and logistics majors reporting were
employed, topping all majors. (The 7 per cent unemployed may include some with poor gradepoint averages, low motivation, and poor interview skills.) This near absence of a "slack" job
supply suggests that enough career-ready graduates are not available to fill openings.
The third reason that universities should have degrees in logistics or supply chain management is
that education is important to logistics professionals. A survey of Council of Logistics
Management (CLM) members revealed that 91 per cent have bachelor's degrees. Only 24 were
logistics majors and 36 per cent were other business majors; the remaining one-third converted
to logistics after graduating. Fifty one per cent of CLM members have graduate degrees, and
21 per cent have professional certificates.5

LogistiX

Table-3 : Results of ISU College of Business Inquiries


Curriculum
Transportation and logistics
MIS
Finance
Multiple majors
Accounting
Management
Marketing
Total

Employed Professionally
93
91
85
84
83
78
78
85

Source: Career Service, Iowa State University Annual Report 1996-97, p.42.
Facu lt y A dv ice
Many university faculty members of every business major. Professor Thomas Speh of Miami
University in Ohio said, "Given the way the business world works today, everybody would benefit
from an understanding of logistics."6 According to Professor Jim Stock of the University of South
Florida. "The material has got to be covered somewhere. Otherwise a students educational
coverage is incomplete."7
Beyond personal achievement, Frank Breslin of the Institute of Logistical Management connects
education and logistics improvements in our economy this way: "Think of the essentially clumsy
way goods were transported merely a century ago compared to the speed of today. At the core
of this change are education, creativity and applied knowledge."8
IS U Exa mp le
ISU's College of Business offers a bachelor of science degree program with a major in
transportation and logistics (or other majors in accounting, finance, management, MIS,
marketing and production/operations management). The minimum number of credit hours is
124.5 (Table-4).
Table-4 : Minimum Credit Hours
Academic area
Foundation (math, computer science, economics, statistics, accounting)
General education (communications, humanities, natural and behavioral
sciences, global perspectives)
Professional program

Hours
27.5
45.0

42.0

Business core (accounting, finance, management, marketing,


transportation and logistics)
Transportation and logistics major (six courses)

Electives
Total

LogistiX

10.0
124.5

ISU's business core requires each student to complete an introductory course in business
logistics. The course is often the first (and only) introduction to transportation and logistics that
many students receive.
Because logistics (unlike accounting, management or marketing) is not a household word, the
required course has become the key recruiting tool for the major. Without it, the Iowa State
program would risk languishing with limited participation as experienced at other schools.
The transportation and logistics major is composed of six courses (or 18 credit hours). Two
courses are required:
Advanced Logistics Management
Transport Economics.
The remaining courses for the major are selected from the courses in Table-5 (one
selection does not need to be a transportation and logistics course).
Table-5 : Remaining ISU Courses
Transportation and Logistics Courses
Transportation Carrier Management

Other Courses
Business Law-II

Industrial Purchasing

Advanced Managerial Accounting

International Transportation and Logistics

Advanced Business Finance

Transportation and Public Policy

Inventory Planning and Control

Transportation and Logistics Issues

Social Responsibility of Business

Independent Study

Personal Sales

Note : Inventory planning and control is offered as a management course.


The general education portion has more courses than the professional program. In addition, the
special transportation and logistics courses are only about 15 per cent of total credits.
With elective credits, students may include internships. Critics who say today's students have too
narrow a span of interest or background have not looked at their curricula. The first two years
are a liberal arts education; serious study in an area of expertise occurs in the following two (and
even later) years.
More venturesome (or persevering, as their credit hours swell above the minimum) students take
a double major, or a major and a minor (the second program can be within or outside the
College of Business). The variety of combinations is astounding as students expand their interests
and abilities.
The Iowa State program is accredited by AACSB The International Association for
Management Education, a body that establishes criteria for U.S. business education. (AACSB does
not, however, require logistics courses.)
The College of Business recently re organized to form a Department of Logistics, Operations and
Management Information Systems. This alignment reflects the flows of materials and information

LogistiX

more accurately Other ISU programs grouped together are Accounting and Finance (dollar
denominated"), and Management and Marketing ("people oriented").9
Sup p ly Cha in a nd Log ist ics
Several universities have adopted "supply chain as part of their majors (or concentrations
meaning a smaller group of specialized courses).10 For example, Supply Chain Management is
the title (or part) at Arizona State University11 and Michigan State University, while University of
Cincinnati has "Product, Information & Supply Management."
Supply chain executive programs are offered by Northwestern University (Transportation and
Supply Chain Marketing Strategy),12 Pennsylvania State University (Supply Chain Management for
Logistics Services Providers)13 and the University of Tennessee (Global Supply Chains).14
Others, like Iowa State's Transportation and Logistics" major, have retained "Logistics" as part
of their program name, sometimes solo and other times pairing it with Transportation or
Distribution (or Physical Distribution), or in combination, as "Business Logistics or "Logistics
Management."
The schools span the continent. In addition, many schools offer logistics- related coursework in
another major, most often in a marketing department (Table-6).
Table-6 : Schools with Supply Chain and Logistics Majors and Programs
Logistics in Program Name
University of Alabama
John Carroll University
Aluburn University
University of Maryland
University of Arkansas
Massachusetts Institute
Of Technology
Case Western Reserve
University
Northeastern University
Central Michigan University
Ohio State University
Duquesne University
Pennsylvania State University
Georgia Southern University
University of North Texas
Georgia Tech
University of Wisconsin-

Logistics-Related coursework in Another Major


California State University
Northridge
University of Georgia
Marshall University
University of Northern Colorado
Northern Illinois University
University of South Floria
University of Texas at Arlington
Virginia Tech
Wayne State University
Western Illinois University
Western Michigan University

Madison(continuing education)

This situation is a good-news, bad- news predicament. It is good because, as noted by Kent and
Flint, scholars in marketing completed much work in logistics.17 They deserve the recognition. In
addition, many marketing texts include an introductory chapter on physical distribution.18 The
four Ps of the marketing mix product, price, promotion and place are a standard mnemonic
for business students.19

LogistiX

Determining where markets are to be served the fourth P has been grandly interpreted by
some marketing writers as having expanded to mean physical distribution management. The 4-P
approach to marketing is so universal that it has been misapplied, such as when Inbound
Logistics described the 4Ps of logistics product, price, promotion and place which
inextricably ties inbound logistics to marketing."20
Co nfus io n
Some business schools have placed logistics courses in marketing departments not surprising
because logistics found an initial place in marketing texts. The organization of these colleges of
business are thus unlike that of most businesses, leading to confusion among students and
faculty about the roles of marketing, logistics and operations.
The roles were clarified by Rider and Ostrom 28 years ago: "Marketing in the development of its
marketing strategy is responsible for the channel management decisions, but not the physical
distribution management decisions.... The need for a separate management within the firm to
solve these problems appears mandatory.21
Considering logistics to be a part of marketing also ignores the integrative role of logistics within
and among firms. Stock said, "Logistics is viewed as a boundary spanning activity."22 Just as
spanning the boundaries is important, the boundaries themselves are important.
Perhaps the strongest argument for separating logistics study from marketing is that logistics
topics appeal to a different group of students in terms of personalities, skills and interests.
Students will not be exposed to the area if they attend a university where logistics is buried in
the marketing department. This recognition of the diversity of interests and individuals is
consistent with the re organization of departments in the ISU College of Business to group the
material and information flow courses, faculty and students together.
Success Ele me nt s
Here is my top ten list of success elements for a university logistics program. It is a starting
point rather than a complete recipe.
1.

Introduce students to logistics early business colleges serious about logistics education do.
Karl Manrodt of the University of Tennessee voices a common complaint: "We don't get
exposure to students until their third year in school."23 By then many have selected their
majors, thus setting their career path. We can argue that they can change majors, but the
prospects decline as the semesters flow by.

2.

Assign a heavy dose of information technology, an area cited as the "number one factor
affecting the growth and development of logistics."24 Approaches include computer
programming, spreadsheet modeling and Penn State's "integrated paradigm."25 Businesses
try to substitute information for inventory; students must learn the tradeoffs.

3.

Provide a global logistics perspective for meeting challenges of serving world markets and
solving humanitarian problems.26

4.

Do not forget communications skills in special courses. Be consistent in using terminology


and slow to adopt buzzwords. Cottrill warns, "Don't lose me in the jargon."27 When
employers demand graduates who can communicate, faculty members cannot delegate the
task of teaching communicative skills to the Speech Department.

LogistiX

10

5.

Experiment with alternative teaching models using student participation (e.g., collaborative
learning).28 Even the most fascinating subjects grow dull with a droning prof. in a large
lecture room. Today's students grew up with MTV and the Internet. We can pique their
interest or put them to sleep.

6.

Involve industry practitioners in the learning process through guest lecturers, special-interest
campus organizations, internships and co-ops. The "real world" need not wait for graduation
day. Colleges need to meet, invite and promote industry guests, and advise students on
internships and co-ops. Iowa State has followed the lead of others by granting credit hours
for outside experiences, even though faculty monitoring is required.

7.

Acknowledge the potential of female students for taking active roles in logistics leadership.29
Let's face it: many transportation and logistics firms (may be some that you invite to the
classroom) have been less than enthusiastic about diversifying their management ranks. But
even the crustiest curmudgeon will recognize that female students are talented after seeing
their grade-point averages and academic awards.

8.

Give a separate identity to logistics or supply chain management programs. If this is not
possible, align them with closely related programs, such as production and operations or
MI5; dismiss the marketing slant.

9.

Build public awareness of the topic and educational programs through published research in
academic and industry periodicals and through participation in professional organizations
(such as SOLE The International Society of Logistics). When you write for publication,
editors will ensure that you can explain your topic to others, which means you are doubly
sure of the concepts.

10. Regain a leadership position by being proactive instead

of reactive. "Logistics" may have


been yesterday's term, and "supply chain" is today's. "Supply-chain synthesis" has been
suggested as the replacement to optimize performance of the overall chain rather than its
links.30 Centers of logistics thought, operating through teaching and research, can give
practitioners the language and tools to lead industrynot follow itin service improvements.

References
1.

James L. Heskett, Nicholas A. Glaskowsky, Jr., and Robert M. Ivie, Business Logistics, 2nd
ed., Ronald Press, New York, 1973, p. 529.
2. Jim Thomas, "Change Agent at Work, " Distribution, April 1996, p. 52.
3. Jim Thomas, 'The Latest Buzz," Distribution, January 1996, p. 45.
4. Thomas, 'The Latest Buzz,' p. 45.
5. Helen L. Richardson, "Logistics: A Stable Future," Transportation & Distribution, February
1998.
6. Chris Isidore, "Educators Want More Instruction in Logistics," Journal of Commerce, April 8,
1997, p. 5A.
7. Isidore, "Educators Want More Instruction in Logistics,' p. 7A.
8. Frank R. Breslin, "Education: Catalyst for a Successful Career," Inbound Logistics, June
1998, p. 18.
9. Iowa State University Bulletin: Courses and Programs 1997-1999, April1997, p. 72.
10. Compiled from "Logistics Education Handbook," Inbound Logistics, April 1997, pp. 31-34;
and Yoshi Suzuki (notes).
11. Arizona State University, "Supply Chain Management" (brochure), 1997-1998.
12. Northwestern University, "Transportation/Logistics Executive Programs" (brochure), 19981999.

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11

13. Pennsylvania State University, Smeal College of Business Administration, "Penn State
Executive Programs" (brochure), 1997.
14. University of Tennessee, Management Development Center, "Global Supply Chains: The
Strategic Advantage" (brochure), 1998.
15. John L. Kent, Jr., and Daniel J. Flint, "Perspectives on the Evolution of Logistics Thought,"
Journal of Business Logistics, Vol. 18, No. 2, 1997.
16. William J. Stanton, Michael J. Etzel and Bruce J. Walker, Fundamentals of Marketing, 9th
ed., McGraw-Hill, Inc., New York, 1991, pp. 380-401; Steven J. Skinner, Marketing, 2nd ed.,
Houghton Mifflin Co., Boston, 1994, pp. 476-513; Charles W. Lamb, Jr., Joseph F. Hair, Jr.,
and Carl McDaniel, Principles of Marketing, South- Western Publishing Co., Cincinnati, 1992,
pp. 381-416.
17. William F: Schoell, Marketing: Contemporary Concepts and Practices, 2nd ed. Allyn and
Becon, Inc., Boston, 1985, pp.79-81.
18. Keith Biondo, "Making Customers Your Salesforce," Inbound Logistics, July 1998, p. 4.
19. Graham W. Rider and Lonnie L. Ostrom, "Logistics: A New Era of Competition," International
Journal of Physical Distribution, Vol. 2, October 1971, p. 44.
20. James R. Stock, "Editorial," International Journal of Physical Distribution & Logistics
Management, Vol. 28, 1998, p. 233.
21. Isidore, "Educators Want More Instruction in Logistics," p. 7A.
22. Richardson, "Logistics: A Stable Future," p. 58.
23. Kant Rao, Alan J. Stenger and Haw-Jan Wu, "Integrating the Use of Computers in Logistics
Education," International Journal of Physical Distribution & Logistics Management, Vol. 22,
1992, pp. 3-15.
24. Roger Morton,"Heading North: Conducting Commerce in Canada," Transportation &
Distribution, November 1997, p. 32; Mark Roe, Marc Weinstein, Jon Bumstead and Heather
Charron, "Forging a Strong European Chain," Transportation & Distribution, June 1998, p.
100; Kofie Q. Dadzie, 'Transfer of Logistics Knowledge to Third World Countries,"
International Journal of Physical Distribution & Logistics Management, Vol. 20, 1990, pp. 1016.
25. Ken Cottrill, "Logisticians Learn to Deliver the Message," Distribution, December 1997, p. 42.
26. Evelyn Thomchick, "The Use of Collaborative Learning in Logistics Classes," Journal of
Business Logistics, Vol. 18, No. 2, 1997, p. 191.
27. Richardson, "Logistics: A Stable Future,' p. 54.
28. Ray Kulwiec, "A Chain Stronger Than Its Links," Modern Materials Handling, July 1998, p.3.

A ut hor' s Biograp hy
Clyde Kenneth Waiter is an Associate Professor in the Department of Transportation and
Logistics, College of Business, Iowa State University. He has a Ph.D. in Business Administration
and an M.B.A. from the Ohio State Unive", an M. E. from Pennsylvania State Univesity, and a
B.S.E.E. from Case Institute of Technologv. His prior positions were at University of Nebraska
Lincoln, Western Illinois University and Cranfield Institute of Technology in Bedfordshire,
England, where he was a Visiting Research Fellow in the School of Management.

Paper appeared in Logistics Spectrum published by SOLE- International Society of Logistics


volume 33 Issue 2 April -June 1999 pp-8-11

Reproduced with the kind permission of the author and the editor of Logistics Spectrum

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ADDRESSING THE LOGISTICS OF INFORMATION


David A. Grover, CPL and Todd M. Grover
Peter E Drucker says, "We know that the source of wealth is something specifically human:
knowledge. If we apply knowledge to tasks we already know how to do, we call it productivity. If
we apply knowledge to tasks that are new and different, we call it innovation. Only knowledge
allows us to achieve those two goals."
Today's successful corporations manage their core businesses well to achieve the needed
productivity levels. Tomorrow's successful corporations will not only manage their core
businesses well, but also their information resources to achieve the innovation for survival in the
next century.
Information is a valuable but affordable commodity. In most fields, leading companies
outperform their competitors behind the scenes with the successful, cost- effective management
of information.
Corporations are finding they have to do more with less. They are relying on geographically
dispersed elements that take advantage of regional cost benefits. instead of having a massive
corporate office complex next to manufacturing and shipping-receiving facilities, corporations
locate corporate offices in tax advantageous locations. The manufacturing and shipping-receiving
facilities are located close to suppliers and buyers, where they are cost-effective.
Manufacturing corporations are not the only business entities required to make adjustments.
Most major industries place executing elements close to their customers and suppliers.
Customers and suppliers are now global, not regional. This article contrasts the traditional
approach to information management with a Web-based approach using a fictitious
manufacturing organization.
Trad it io na l A pproach
Major system development can be a daunting task. Defining requirements can take months. After
requirements are defined, system development can take years. Design meetings are held to reevaluate requirements and demonstrate portions of the 'soon to be completed' system.
After the system is delivered, many users find it is only a partial solution. The need for
information may have changed since the initial requirements were identified.
The requirements are redefined and the system is altered over the next months or years. This
process suited for very specific functions in specific operating elements of a
corporationcannot keep up with the changing demand for information throughout a
corporation.
Because most systems are independent, supporting them across a geographically dispersed
corporation has traditionally been very expensive to implement and maintain. Networking
decisions for a whole corporation and buy-in from different elements may not always be easy. In
addition to the information-sharing hurdles, providing information to outside entities, such as
suppliers, subcontractors and customers, can be nearly impossible.

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Eliminating the existing information technology infrastructure is not the answer. Many systems
are extremely complex and have been refined over several years. Unfortunately, the costs of
making systems more accessible to outside elements have traditionally been greater than the
benefits received. Therefore, a lot of information is transferred via fax, phone and courier.

MANAGEMENT

MANUFACTURING

SHIPPING/RECEIVING

Operating System:
Mainframe with
terminal on the factory
floor
__________________

Operating System:
Unix server with terminal
on the shipping dock
_____________________

IMS:
Tracks production
lines, estimates leadtimes, identifies
bottlenecks, monitors
finished and
unfinished inventory

IMS
Tracks all incoming and
outgoing goods, monitors
costs, establishes schedules

SALES
Operating System:
PC-based
client/server
application
_________________
IMS
Maintains domestic
and overseas
customer
requirements,
records sales, tracks
leads

Fig.1. ABC Industries


Simp le Exa mp le
To clarify the situation, consider a simple example of a traditional information infrastructure for a
fictitious corporation we will call ABC Industries. The organization has three distinct 'frontline'
elements (Figure-1). Each has its own cost centers, operating budgets and infrastructure.
Each segment of the company has developed information management tools appropriate for its
missions. The hardware was purchased and positioned to maximize its use within the division.
A typical business day includes continuous interaction among all three elements. Susan, a sales
manager in Los Angeles, is working with a major customer, XYZ Inc. She is almost ready to close
the deal on an order for 200,000 units of Product-1 A. They have agreed on a price, but if the
units can't be delivered in 21 days, no deal. Susan tells XYZ she will get back to them; she has to
check on the availability of the units. She has until the end of the day; then XYZ has promised to
look elsewhere.
Susan calls Vijay, a manufacturing manager in Detroit. Vijay brings up the manufacturing system
and tells her they only have 100,000 units of Product-A and the next batch (50,000 units) will not
be completed for 10 days. In addition, no other batches are scheduled within the next 21 days.
Susan asks Vijay to schedule a batch of 50,000 to be produced because she has a customer that
needs 200,000. Vijay cannot schedule the production. He is already near capacity and has been
directed not to put products into production until the deal is signed.

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Vijay assures Susan that once he has the order, he can produce the additional 50,000 units A
within the 21-day window. He gives her the estimated full absorption costs for the 200,000 units
plus the cost to store the 150,000 units until the last 50,000 are completed.
A lt ernat iv e So lut io n
Susan calls John, a shipping-receiving manager in Detroit, and explains the situation. John pulls
up his system, tells Susan he can accommodate her schedule and gives her the cost for shipping
200,000. John gives her an alternative as well. ABC can make three separate shipments of
100,000 and two 50,000-unit batches. It will cost a bit more, but the customer would receive
some products ahead of schedule.
Susan works the numbers. Because an additional 50,000 units need to be manufactured on an
accelerated schedule, the absorption costs are more than she anticipated, not to mention the
additional storage costs. If she ships the 200,000 units, the costs are about what she expected.
She knows XYZ would appreciate receiving at least a portion of the order ahead of schedule, but
that is more expensive than she had anticipated-ABC would lose money if she sold XYZ 200,000
units at the quoted price. She has to tell XYZ she can't meet the order or she must adjust the
original quote.
She calls XYZ and says the original quoted price is too low and needs to be raised. As can he
expected, this news does not sit well with her customer.
Susan convinces XYZ that her company is committed to its success and it will receive three
shipments; the first for 100,000 units will arrive by the end of the week. She cuts the price as
close as she can, but knows her manager will be upset. The deal is signed and Susan gets to
work.
Co nt inu ing A ct io ns
Vijay gets a call from Susan. She informs him the deal is closed. She faxes the sales information
and Vijay schedules the job.
Next John gets a call. Susan taxes the sales information to John and he schedules the three
shipping dates. But he needs to confirm this with Vijay, so John calls Vijay and asks for a
complete manufacturing schedule for the next 21 days.
Vijay tells him he will print and courier it to John by the end of the week. John says that's OK,
but he would like to make sure the deliveries won't he affected by other completed products
scheduled for delivery.
John calls Susan and lets her know that the order will be done, but some juggling may be needed
for the third shipment. For the next 21 days, Susan worries the third shipment will not go out on
time. Every few days she calls Vijay and John and asks them about the orders. She receives
queries from her customer at XYZ on the status of the last shipment.
In this example, each element of ABC Industries has established very effective systems for
maintaining information to perform its jobs. But this information is not readily available to outside
elements. Couriers, fax machines, emails and telephone calls are the methods for moving
required information. This process is time- consuming and inefficient.

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Web- Based Infor mat ion


Although a corporation is geo- graphically dispersed, information should move throughout the
organization as if it existed under one roof. Synchronized calendars, providing real-time
information allows users to schedule meetings, identify conflicts and maintain personal and
organizational calendars.
Suspense tracking and workflow applications provide users with automated mechanisms to
process documents and accommodate serial and parallel, dynamic and "canned" work
processing. Electronic signatures, audit trails and a growing selection of security mechanisms
provide several levels of security to protect proprietary processes, applications and data.
Companies need to avoid flying associates in to work on a proposal or a major requirements
document. Collaborative tools allow users to work from remote sites on the same application.
Enhanced collaboration may also include desktop video conferencing, text-based chat capabilities
and white boards.
Most importantly, a corporation requires company-wide access to legacy systems. Elements in a
corporation use distinct information systems to manage their parts of the business. The
information should be available throughout a corporation at minimal cost to the requester and
no additional workload for the provider.
Web technology provides corporations the ability to manage information. Most users are familiar
With the Internet. It is quickly becoming the most common form of information transfer and the
most obvious demonstration of Web technology. Users retrieve information from remote entities
over a basic network architecture. The Web's major shortcoming is the security of an
organization's sensitive information.
Instead of the Internet, consider a private network with similar architecture, except all elements
of the network exist within the corporation. A private network such as this is called an intranet.
It is internal to the corporation and serves users who belong to the corporation. It is secure from
the outside world and accommodates levels of security within the corporation. Unlike the
Internet, which provides an infinite amount and variety of information, intranets provide
information critical to achieving the goals of a corporation. Effective intranets can move incredible
amounts of information, but segregate the information so users have access to the information
they need.
Elements of an intranet can benefit users outside the corporation. Consider a direct line of
communication to suppliers, subcontractors or customers. Suppliers and subcontractors are
equipped with tools to be more successful at meeting the demands of the corporation, and the
customers are better informed.
A network, which is primarily private and secure, but shares a limited amount of information with
users outside the corporation, is called an extranct. Boeing revolutionized this concept with a
totally open line of communication to its suppliers, subcontractors and customers during the
development of the 777 aircraft. The results-new planes were delivered ahead of schedule and
under budget. Boeing has since captured a large share of the market from its chief competitors.
In an aggressive marketplace, the effective management of information separates the winners
from the losers. Intranets and extranets can help corporations gain a competitive edge by:

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Doing more with less


Coping with geographic dispersion
Leveraging technology infrastructures
Supporting several operating systems
Supporting diverse levels of user technical experience
Ensuring security and sensitivity issues are adequately addressed.

Ne w St ruct ure
Let's return to ABC Industries, but this time assume that a basic intranet and extranet structure is
in place as shown in Figure-2.

Fig.2. New Approach to Information Management

Ideally Susan would look at the manufacturing and shipping-receiving information online. She
would submit contingent plans to meet her customer's requirements, receive estimated costs,
and be able to quote a more appropriate price. These steps would have been done quickly,
possibly while she is still on the phone with her customer.
After the order is placed, Vijay and John would be alerted to the sales activity and would have
the information to take appropriate actions. To serve XYZ better, access to the status of its order
would allow it to track progress and make necessary plans.

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To take the example a step further, manufacturing information can be made available to ABC's
suppliers. This information would allow the suppliers to react to the accelerated production
schedule for the last 50,000 units.
Parts or raw materials to produce the 50,000 units would be shipped automatically to ABC's
manufacturing facility. When Vijay begins production on the last 50,000 units, all necessary
materials would be delivered the day before and staged for production.
This type of communication infrastructure can be established via an intranet, extranet and even
the Internet. The solutions are platform-independent and built quickly and inexpensively.
They use Web technology and commercially available tools to create interfaces to traditionally
isolated information resources. In addition, business tools (such as calendars, collaboration tools
and desktop video conferencing) can be made available throughout the corporation.
Web-based systems are very scaleable. As requirements for information change and increase, the
systems can easily evolve to meet the demands. This evolution is defined in weeks to months,
not months to years.
Su mmary
Web-based information systems facilitate communications among elements in a corporation, its
suppliers, subcontractors and customers. Because the systems are not resource-intensive, they
generate an immediate return on investment.
They provide a corporation with tools to cope with geographic dispersion, leverage existing
technology infrastructures, support several operating systems and diverse user experience, and
ensure security and sensitivity.
If you need information to succeed, you need to step up to Web-based information management.
Information is one of your most valuable resources; manage it accordingly
A ut hors' Biograp hy
David A. Grover, CPL, is co-founder of Washington Square Associates, Inc. He is a Senior
Member of SOLE and a member of the Society's Board of Directors.
Todd M. Grover is Vice President Information Technology, Washington Square Associates, Inc.
He directs its development of Web-based architectures and productivity tools.

Paper appeared in Logistics Spectrum published by SOLE- International Society of Logistics


volume 33 Issue 3 July -September 1999 pp-8-11

Reproduced with the kind permission of the authors and the editor of Logistics Spectrum

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GEOGRAP HICAL INFORMATION SYSTEM (GIS) AP P LICATION IN


MARKETING AND DISTRIBUTION
Kadambi Balaji
A Geographical Information System is a computer system for capturing, storing, checking,
integrating, manipulating, analyzing and displaying data related to positions on the earths
surface. In a GIS, the data is represented in the form of several different layers where each layer
holds data about a particular kind of feature (E.g. Road Network, Contours). Each feature is
linked to a position on the graphical image of a map. The data can be analysed using different
statistical tools to generate valuable information. If you could relate information about the rainfall
of a state or region to aerial photographs of the region, it will be possible to find out which
wetlands dry up at certain times of the year. A GIS, which can use information from many
different sources and in many different forms can help with such analyses. The primary
requirement for the source data is that the locations for the variables should be known. Location
may be annotated by x,y and z coordinates of longitude, latitude, and elevation, or by such
systems as ZIP codes or highway mile markers. Any variable that can be located spatially can be
fed into a GIS.
These capabilities of the system to analyse spatial data find application in many areas. At
present, it is primarily being used by the various departments in the Government for town
planning, public utility management, environment management, forest management and other
related areas. The Department of Science and Technology(DST) has launched Natural Resources
Data Management System(an S&T programme of the Government of India) and it aims to
promote R&D in spatial data management technology. NRDMS is currently developing district
level resource profiles on natural resources and other allied sectors based on the concepts of
Geographical Information System.
In business, GIS finds application in Marketing and Distribution. The system can represent sales
data, distribution sectors, customer profiling, retail catchment areas, media regions or any other
land-related information. This stored data is used to carry out complex market profiling for
planning direct mail or door drop campaigns. A statistical analysis can be carried out on the sales
data and the area-wise demand can be forecasted with better accuracy. The companies can
analyse the areas covered by its wholesalers. It helps location planning. If a store is in a bad
location, GIS can be used to identify better sites. If there is a need for an additional store, the
most suitable location can be identified. It is a very good tool to get a good grasp of local
catchment areas. There are many GIS packages available in the market and some of them are
developed to specifically aid a particular application. ESRI, a major developer of GIS software,
has come out with a vehicle routing and scheduling system called Arc Logistics Route. This
system can create and manage complex fleet route operations. Using customer order information
imported from standard databases, the software package geocodes addresses and assign orders
to vehicles. It determines optimal routes to vehicle based on customer requirements and vehicle
characteristics. It generates route summary reports, route overview maps, street level directions
and driver manifests. It can also export routes and schedules to standard ODBC databases and
SAP R/3.
The inputs to the GIS system are the most expensive part of the equation. The software costs
are falling all the time, as are hardware costs, but it is the data that will decide the usefulness of
this system. GIS requires digitized maps as input to store data and perform the analysis. To map
the whole country down to the level of address points will cost more than 1000 crore rupees. To
utilize the system effectively, the company should have its own distribution network and also its
own fleet of trucks. In the 1990s, companies have started giving importance to IT enabled supply

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chain management. Coke is presently attempting to use GIS to study its sales data. If the costs
of obtaining input data comes down to an affordable level, GIS can be a very effective tool for
companies to reduce costs through effectively managing the supply chain.
Co mpa n ies in Ind ia w h ich dea l d irect ly or in d irect ly w it h GIS

www.rmsinet.com - RMSI, New Delhi, Service provided by RMSI- Map & drawing data
conversion. Digital Mapping and Automated Cartography, Digital Map Data Products which
are State/Country Maps with district, towns, national and state highways, water bodies and
demographic information. City Map with transportation networks (roads, streets, railways),
land use & morphology showing urban sprawl, and terrain heights (contours,spot elevations
and DEMs). www.webindia.com/theovel - Theovel Surveys, Bangalore
www.patni.com - PCS, Pune
www.mlinfomap.com - ML Infomap, New Delhi, You will find with them data relating to
industry, work force, demographics, elections, agriculture, village infrastructure, road and rail
networks, and more. Their map databases are for creating presentations, demographic
profiling; developing applications for transportation networks and rural marketing; planning
telecommunication facilities.
www.mapsofindia.com - Find out maps and maps of India, which are not to scale in this
site. You can get maps of Air Network, Railway Network, National Highway, Mineral, Power,
District Map and many more. You can also find tourist location and hill stations in India and a
map of all 5 star hotels in India. Check their Distance Calculator between selected cities and
towns in India.
www.tide-india.org - TIDE is a GIS organisation based in Bangalore. They have helped in
setting up a GIS centre at Bangalore Metropolitan Regional Development Authority (BMRDA)
for assisting them in development of Bangalore city. They have also worked on some
interesting projects, for details visit their web site.

GIS relat ed Int ernet sit es

www.esriindia.com - The Arcinfo People in India,


www.mapinfo.com - Most popular Desktop GIS Software,
www.autodesk.com - Known for AutoCAD; checkout for AutoCAD Map and Autodesk
World.
www.rolta.com - Intergraph Products in India
members.rediff.com/isg - Indian Society of Geomatics

So me Po pu lar A ssociat ions e ngage d in Log ist ics an d Transport at ion


q
q
q
q

CLM- The Council of Logistics Management : http://www.clm1.org


SOLE- The International Society of Logistics: http://www.sole.org
CALM- Canadian Association of Logistics Management: http://www.calm.org
AST&M-American Society of Transportation & Logistics: http://www.astl.org

Ma jor L in ks t o usefu l webs it es on Lo g ist ics an d Transp ort at ion are av ailab le in
t he Int ernet at
q
q

The Worldwide directory of Transportation & Logistics-http://www.logisticsworld.com


The Directory of Transportation Resources- http://www.njtide.org/links/index.html

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www.csdms.org - Publishers of GIS@Development, South Asia's first GIS/GPS bimonthly


magazine
GIS India - A GIS journal published by an organisation based in Hyderabad. (This web page
and the journal are independent to each other)
www.ibsaxena.com/sanjay/index.htm-(Sanjay GPS will navigate you around Delhi,
using GIS, GPS technology)
www.miningindia.com - Mining in India detail editorials, news, companies, vendors etc.

A ut hor' s Biograp hy
Kadambi Balaji is an Engineer from the Indian Institute of Technology, Chennai and presently
in the second year of his Postgraduate Programme in Business Management in XLRI,
Jamshedpur. His key interests are in Information Technology in Supply Chain Management and
Distribution Management.

Logistix e-Newsletter is published by


The Centre for Logistics & Transportation Management
(CLTM)
XLRI, Jamshedpur, C.H.Area(East), Jamshedpur 831 001
India, Tel: 91-657-225506 Fax: 91-657-227814
e-mail: cltm@xlri.ac.in
Website: http://www.xlri.ac.in/cltm.htm
Editor: Prof.T.A.S.Vijayaraghavan
Coordinator, CLTM
Information Systems & Operations Management Area
e-mail: tasviji@xlri.ac.in

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