LOGISTICS MANAGEMENT

Presented By:

WHAT IS THIS LOGISTICS ALL ABOUT??

Distribution logistics

MATERIAL

PRODUCTION

DISTRIBUTION

IMMEDIATES UPPLIER

IMMEDIATE CONSUMER

DEFINITION

Planning ,implementing and controlling the physical flow of material and finished goods from point of origin to point of use to meet customer`s need at a profit

Global Logistics

7 RIGHTS OF LOGISTIC MANAGEMENT

RIGHT QUANTITY RIGHT QUALITY

RIGHT PLACE

CUSTOMER

RIGHT PRICE

RIGHT SERVICE
RIGHT RELATION

RIGHT TIME

ORDER PROCESSING

WAREHOUSING

INVENTORY MANAGEMENT

System is shown as logistic Mix including following

PACKAGING

TRANSPORTATION

Logistic
HR
A/Cs Finance Utilities Marketing PPC

QC

Mat. Mng.

IT

Others

Organizational Functions
In process Log.

Suppliers

Procurement
In Bound Log.

Processing

Distribution

Customer

Out Bound Logistic

Logistic System Component

Transportation Material Handling & Storage Logistical Packaging

Warehousing Information Inventory Mang.

LOGISTIC FUNCTION
Order Processing

TRANSPORTATION
HOW MUCH TO MOVE? WHEN TO MOVE? WHERE TO MOVE? BY WHAT MODE, OR COMBINATION OF MODES TO MOVE?

Transportation
For the movement of goods from supplier to buyer , transportation is the most fundamental and important component of logistic. E.g. for low unit value products the transportation cost component is 20% of the product cost. In logistic cost its share varies up to 65-70% in case of mass consumed very low unit price products. Mode of transportation ( Cost & time factor) Own fleet or Outsourcing

Route Planning
Vehicle scheduling Are the few decision which are involved in transportation

STEPS INVOLVED IN DESIGNIMG A DISTRIBUTION LOGISTICS SYSTEM

ARTICULATING DISTRIBUTION OBJECTIVES AND PRESCRIBING THE SERVICE LEVEL IN PRODUCT DELIVERY

FINDING OUT WHAT THE CUSTOMERS AND CHANNELS WANT IN PRODUCT DELIVERY

FINDING OUT WHAT THE COMPETITORS DO

OPTIMIZING THE COSTS AND TACKLING THE COST SERVICE TUSSLE

PROVIDING THE FLEXIBILITY IN THE SYSTEM

MAIN TASKS IN TRANSPORT MANAGEMENT

CHOOSING THE MIX OF TRANSPORT MODES ROUTING OPERATIONAL PLANS CONTROL OF TRANSPORT COSTS

Transportation Modes
Nations largest carrier, cost-effective for shipping bulk products, piggyback

Rail

Truck
Flexible in routing & time schedules, efficient for short-hauls of high value goods

Water
Low cost for shipping bulky, low-value goods, slowest form

Pipeline
Ship petroleum, natural gas, and chemicals from sources to markets

Air
High cost, ideal when speed is needed or to ship high-value, low-bulk items

Warehousing
A storage place wherein finished goods are stored till they are sold.Effectiveness of an organization`s marketing strategy depends on making the right decision regarding warehouse. Nowadays Warehouse are treated as switching facilities rather than storage place.It is a major cost center, many customer problem are the direct result of improper warehousing management. Major decision of ware house are as follows:HOW MANY WAREHOUSES SHOULD WE HAVE?

WHERE SHOULD WE LOCATE THEM?

WHAT SHOULD BE THE SIZE OR CAPACITY OF EACH OF THEM?

Warehousing Function
3 Functions
Material Handling Function Material Storage Function

Information Handling Function

Material Handling function

This involves three function Loading & unloading Material Movement Order filing

Information handling function

For this following information is required Goods inward Inspection & auditing Goods outward Excess Stock Invoicing Warehouse expenses Transit damage & Breakage Consignment tracking

Material and information flow

Material and information flow

Material flow

Information flow

Order Processing
Involve following activities

Order checking for any deviation in agreed on negotiated term

Technical details;price;delivery period;payment terms;taxes etc

Checking the availability of material in stock (material requisition) Production & material scheduling for shortage Acknowledging the order, indicating deviation if any It is routine operation but require great deal of planning training of people involved and investment to bring about efficiency & accuracy In a large organization a system capable of handling thousands of voluminous orders with minimum human involvement or without human involvement is a must involving shortened order fulfillment cycle to have edge over rivals

Inventory management
HOW MUCH TO ORDER? WHEN TO ORDER?

1.OPERATIONAL STOCKS KEPT FOR MEETING READY DEMAND

2.STOCKS IN TRANSIT AT ANY POINT OF TIME

3.THERE WILL BE STOCKS AWAITING SHIPMENT 4.THERE WILL BE THE BUFFER STOCKS KEPT FOR MEETING UNANTICIPATED REQUIREMENTS

ELEMENTS OF INVENTORY COSTS

DECIDING THE OPTIMUM INVENTORY (lost sales due to stock out) OPTIMUM INVENTORY IS A COMPROMISE BETWEEN COST AND SERVICE MINIMUM INVENTORY/SAFETY STOCK (lead time) ORDERING TIME ORDER QUALITY(ORDER PROCESSING TIME VS. INVENTORY COST) ECONOMIC ORDER QUANTITY(EOQ) A BALANCING ACT (sales to inventory ratio)

Inventory vs Service levels

100%

Reorder point should balance the risks of stockouts against costs of overstocking Company needs to balance ordering costs vs inventory carrying costs inventory

COST PER UNIT

TOTAL COST PER UNIT

INVENTORY COST PER UNIT

ORDER PROCESSING COST PER UNIT EOQ ORDER QUANTITY

Packaging
It is also a critical element in physical distribution of the product , which influences the efficiency of the logistic system this is done with the view of following : For handling and damage prevention For communications For inter modal transportation

Storage space economy

Logistics and Security

After the terrorist attacks of 2001, companies have to deal with the fact that the pace of international transactions has slowed down and that formerly routine steps will now take longer.

Logistics systems and modern transportation systems are often the targets of attacks.
The need to institute new safeguards for international shipments will affect the ability of firms to efficiently plan their international shipments.

Logistic A system approach

Logistic recognizes that all the activities of material movement across the business process are interdependent and needs close coordination and these are to be maintained as a system and not the functional Silos.

OUTSOURCING OF DISTRIBUTION LOGISTICS

IT HELPS TO ACHIEVE A HIGHER SERVICE STANDARD IN DISTRIBUTION

IT HELPS CUT DISTRIBUTION COSTS

Thanks For Tolerating me

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