LOGISTICS MANAGEMENT

Doç. Dr. Bülent SEZEN

What is Logistics?
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

Is it different from SCM?
Not really!

“Supply Chain Management deals with the

management of materials, information, and
financial flows in a network consisting of
suppliers, manufacturers, distributors, and
customers.” (Stanford Supply Chain Forum)

So, Logistics and Supply Chain are

equivalent terms.
Logistics Functions

Purchasing / Facility Location /

Procurement Network Design

Inventory Control Transportation

Warehousing Customer Service

Materials Handling Order Processing

A List of Approaches in Log. Man.
 Just in Time Inventory
 Vendor Managed Inventory
 Quick Response
 Collaborative Planning,
Forecasting, and
Replenishment
 Outsourcing / 3PLs
 Cross-docking / Flow
Through Centers
 Build to Order
 SC Visibility Software
 Internet / EDI
 Collaborative
Transportation
Management
 Auctions / Exchanges
 Merge - In - Transit
 Partnerships / Alliances
Logistics firms in Turkey
A Sample Logistics Firm: EKOL
Value Added Services

Value added services, such as

quality control, labeling, sorting,
repacking, etc. can be included in the
logistics processes.
Video: EKOL Lojistik
Video: Borusan Logistics (VLC Player)
Bonded Warehouse
(In Turkish: “Antrepo”)
Bonded warehouse is a warehouse in which
goods are stored without customs duties
being paid until they are removed from the
warehouse.

Such warehouses are used for the storage

of import merchandise, subject to duty, until
the duties are paid or the goods reshipped
without entry.
Bonded Warehouse…
In accordance with the limitations and
authorities defined by laws of customs,
bonded warehouse stores merchandise,
not subject to free circulation, under
internationally acclaimed standards prior
to nationalization.

Operations in the warehouse may include

assembly, manipulation or storage but
usually not manufacturing.
Cross Docking
a logistics activity that attempts to reduce
costs and total lead time.

breaks down received items on the

loading dock and immediately matches
them with outgoing shipment
requirements, instead of stocking the
items in warehouse locations and
returning to pick for orders at a later time.
Cross Docking…

eliminates the need to place

inventory in storage.

This can mean moving pallets across

the docking areas (hence the name)
for loading onto delivery vehicles.
Cross Docking…
Crossdocking essentially eliminates the
inventory-holding function of a warehouse
while still allowing it to serve its
consolidation and shipping functions. 

The idea is to transfer incoming

shipments directly to outgoing trailers
without storing them in between. 
Cross Docking…
In a traditional warehouse, goods are
received from vendors and stored in
devices like pallet racks or shelving. 

When a customer (e.g., the consumer or

perhaps a retail outlet) requests an item,
workers pick it from the shelves and send
it to the destination. 
Cross Docking…
In a crossdock, goods arriving from the
vendor already have a customer assigned,
so workers need only move the shipment
from the inbound trailer to an outbound
trailer bound for the appropriate
destination. 

The already part should make you think of

information system requirements--a chief
obstacle to implementing crossdocking
successfully.
Cross Docking…(classification)
One way to classify crossdocking operations is
according to when the customer is assigned to
an individual pallet or product. 

In pre-distribution crossdocking, the customer is

assigned before the shipment leaves the vendor,
so it arrives to the crossdock bagged and tagged
for transfer. 

In post-distribution crossdocking, the crossdock

itself allocates material to its stores. 
Cross Docking…(classification)
Pre-distribution is definitely more difficult to
implement because the vendors of the crossdock
must know which customers of the crossdock
need what before they send the shipment. 

This involves quite a bit of information transfer,

system integration, and coordination. 

For a distributor with hundreds of vendors, the

problem is big, big, big!
Logistics Experience will be
different from one sector to another
Textiles
– speed and variety due to seasonality concerns
Retailing (FMCG)
– prevents stores from having empty shelves or shelves with
overstocks
– Frozen storage and transportation
Health
– hygienic, have limited shelf life, require special storage
conditions and entertain high inventory risks
Automotive
– just in time (JIT), delivering parts from thousands of
kilometers, special packaging
Fuel and Petroleum Transportation
– very special tanker security systems
Fuel and Petroleum
Transportation
 Fuel tankers have bodies, including the
chassis, made of aluminum alloy and are
the lightest tankers in weight and highest
in volume (20.000 to 38.000 liters).

 The tanks have a bottom loading and

unloading system and all the necessary
security equipments for overloading.
Fuel and Petroleum
Transportation…
 The tanks have capacities between 20.000 and
38.000 liters, 4 to 7 compartments and 3.200 to
7.000 liters of compartment capacities.

 Along with these tankers there are three-level

security systems, bottom loading equipments,
anti-rolling system, a security system locking the
brakes when the API drum is opened and the
valves when it is closed, emergency buttons at
three sides and an EBS brake system.
Fuel and Petroleum
Transportation…
There are also:

Emergency power switch,

Emergency valve locking switch,

6 rear-view mirrors
Fuel and Petroleum
Transportation…
The drivers clothes have long sleeves and long
trousers.

The fabric is 100% cotton to avoid static

electricity.

In addition, all drivers wear anti-static shoes.

The drivers’ equipments also include gloves

resistant to the material they carry, a helmet
compliant to EN norms and glasses against the
material vapor.
Video: Shell Oil Tanker Distribution
 Vehicle Logistics
Vehicle logistics services include:

– Vehicle Transportation

– Marine Transportation (RO-RO)

– Ship Loading and Unloading

– Storage and Parking Lot Services

– Dealer Distributions

– Information Systems and Reporting

Vehicle Logistics …
Special transportation
services are:

Inter-dealer transportation,

Fair exhibitions,

Sports competitions,

Collection vehicles
Vehicle Logistics …
During the placement of
vehicles on to the
ship;

Minimum parking
distances,

Installation of the safety

equipment

should be realized.
 Vehicle Logistics …
Storage and Parking Lot
Services:

- Transfer to addressed area,

- Transfer to the dispatch area,

- Transfer of the out of order

vehicles to the service area,

- Transfer from the service

area to the addressed area
Video: Interview with People at
Omsan Vehicle Logistics Dept.
Video: Şahsuvaroğlu Tractor
Shipment
Case Studies with EKOL:
Intra Medikal
Intra Medikal used to perform inventory,
warehouse and distribution management
internally before Ekol partnership.

After a comprehensive project, logistics

processes are outsourced to Ekol.

The first value obtained by this project was

eliminating the short distance transportation
costs of bonded goods from customs area to
warehouse.
Case Studies with EKOL:
Intra Medikal…
The inventory records database enables a
systematical display of shelf lives and other
product specific information.

Before export and internal distribution, products

are barcode labeled according to the accepting
criteria of customers and hospitals.

Customers in Istanbul receive daily deliveries,

while customers out of Istanbul receive cargo
shipments.
Case Studies with EKOL:
Çarşı (Boyner)
Carsı, one of Turkey's leading retailer chain
stores, has become a pioneer in the field of
logistics outsourcing.

On its quest for a logistics partner, Carsı looked

out for many candidates and finally preferred
Ekol.

By consolidating Carsı store supply strategies

according to the product groups as "cross-dock",
"flow thru" and "replenishment" strategies, EKOL
achieved inventory minimization and delivery
efficiency.
Case Studies with EKOL:
Çarşı (Boyner)…
Interfaces have been built between EKOL
and Carsı softwares which have different
infrastructures running independently and
a data processing structure has been
established enabling both parties to
monitor all processes, create work orders
and report the results simultaneously.

Thanks to this system, any data Carsı

keys in to the software can be utilized for
generating work orders to EKOL.
Case Studies with EKOL:
Braun
Operating within Gillette group, Braun is the
world's largest electric shaving machines, small
kitchen appliances and blood pressure and fever
measurement devices provider.

Braun was working with a company for supplying

spare parts, after sales support and product
change under insurance coverage.

Spare parts purchased by service supplier from

Braun's center in Germany were later transported
by freight forwarder companies.
Case Studies with EKOL:
Braun…
After being cleared of customs by customs
broker firms they were sent to Braun technical
services via cargo companies.

There was hardly any integration achieved on

these steps, and no advantage of automation
technologies for computer and product flow.

Transportation, customs handling, stock and

order management is taken over by Ekol
providing roofconsolidation.
Case Studies with EKOL:
Braun…
Taking 3rd Party Logistic service provider
concept one step further, EKOL imports Braun
products and takes the burden of all inventory
and financial costs and risks.

In this context, EKOL proved that Third Party

Logistic service suppliers can be relied on, in
maintaining minimum inventory levels, financing
inventory keeping costs, assuming stock risks,
and making direct sales decisions.
What is Ro-Ro?
Roll-on/roll-off (RORO) ships are
designed to carry wheeled cargo
such as automobiles, trailers or
railway carriages.

This is in contrast to lo-lo (lift on-lift

off) vessels which use a crane to
load and unload cargo.
What is Ro-Ro?
RORO vessels have built-in ramps which
allow the cargo to be efficiently "rolled on"
and "rolled off" the vessel when in port.

While smaller ferries that operate across

rivers and other short distances still often
have built-in ramps, the term RORO is
generally reserved for larger ocean-going
vessels.
What is Intermodal (Combined)
Transport?
It is a transport method that more than
one transport mode is used for the same
transport container.

The process can also be defined as a

transportation method where transport
mode changes for the same transport
container or land vehicle, but the goods
themselves are not handled during these
changes.
What is Intermodal (Combined)
Transport?

In other words, it is a transport method

that integrates advantages of different
transport modes.

In intermodal transport, the aim is to

achieve an effective combination of cost,
delivery time and service quality.
Features of Intermodal Transport
Using standard transport units (like standard
containers, trailers or pallet).

The suitability of the transport units for loading,

carriage and unloading.

The compatibility of the technological, legal and

organizational parts of the process chain within
the transport system.

The goods inside the transportation container are

not handled
Advantages of Land-Railway
Intermodal Transport
Guarentee of long-term fixed price

Secure shipping

Minimum interference by weather conditions and

traffic constraints

Easier border crossing

Cost and equipment supply advantage in high

volume and planned shippings
Omsan Lojistik’s Intermodal
Transport
Omsan Lojistik’s Intermodal
Transport (cont’d)
What is Milk Run Distribution?
It is the combination of shipments
from multiple vendors in close
geographic proximity into one
shipment received by the customer,
normally done for a defined route on a
recurring basis.
What is Milk Run Distribution?...
Milk Run Distribution…
What is a Freight Forwarder?
An independent business that handles
export/import shipments for a fee.

A freight forwarder is among the best sources of

information and assistance on export regulations
and documentation, shipping methods, and
foreign import regulations.

Forwarder assembles, collects and consolidates

less-than-truckload (LTL) freight .
What is a Freight Forwarder?...
Forwarder consolidates freight for many
shippers, arranges for shipment and delivery via
LTL carriers and gets lower (freight) rates based
on volume than the individual shippers could
obtain.

At the request of the shipper, the forwarder

makes the actual arrangements and provides the
necessary services for expediting the shipment
to its overseas destination.

It also clears the freight through customs.

What is a Freight Forwarder?...
The freight forwarder does not actually carry the
cargo or conduct business for the ship.

It is an intermediary between carrier and owner of

goods being transported.

The forwarding agent assists the exporter in

finding the most economic and efficient methods
of transporting and storing cargo.
E-marketplace, Online Auctions and
Exchanges
An E-marketplace is a virtual online
market where organizations register as
buyers or sellers to conduct B2B e-
commerce over Internet.

They can be operated by an independent

party, or be run by some form of industry
consortium that has been set-up to serve
a particular sector.
An Online Marketplace:
Equipnet.com
Online Auctions
Online auctions are computerized
versions of traditional auctions
where prices are set by buyers
bidding against each other.

Online auctions use Internet

technology, so, vast numbers of
businesses can bid.
Online Exchanges
Online Exchanges are websites
where buyers and sellers trade
goods and services online.

There are successful exchanges in

markets as diverse as energy,
textiles and logistics.
Online Exchanges…
Types of exchanges:

– Request for quotation

• An invitation to suppliers to provide a quote for a
specific product or service

– Request for bid

• An invitation to buyers to bid for a specific product
or service that you are able to provide