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Topic No 2 Logistics
Topic No 2 Logistics
Topic No 2 Logistics
LOGISTICS
Overview of logistics
Logistical operations
Flexible structure
LOGISTICS
DEFINED
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
BY PHILIP KOTLER
IT IS ESSENTIALLY A PLANNING PROCESS AND AN INFORMATION
ACTIVITY
SO A INTEGRATIVE PROCESS THAT OPTIMIZES THE FLOW OF
MATERIAL AND SUPPLIES THROUGH THE ORGANIZATION AND ITS
OPERATIONS TO THE CUSTOMER
What is logistics?
To satisfy customer
expectations for delivery
of products (or services)
while minimizing the
total cost
SCOPE OF LOGISTIC
IT IS OF CRITICAL IMPORTANCE TO THE ORGANIZATION
HOW IT DELIVERS PRODUCTS & SERVICES TO THE
CUSTOMER , WHETHER THE PRODUCT IS TANGIBLE OR
INTANGIBLE.
EFFECTIVE & EFFICIENT PHYSICAL MOVEMENT OF THE
TANGIBLE PRODUCT WILL SPEAK OF INTANGIBLE
SERVICES ASSOCIATED WITH THE PRODUCT AND THE
ORGANIZATION WHICH IS DELIVERING IT.
IN CASE OF INTANGIBLE PRODUCT , THE DELIVERY OF
TANGIBLES AT THE RIGHT PLACE & RIGHT TIME WILL
SPEAK ABOUT ITS QUALITY.
ON THE MACRO LEVEL INFRASTRUCTURE SUCH AS
VARIOUS MODES OF TRANSPORT , TRANSPORTATION
EQUIP., STORAGE FACILITIES, CONNECTIVITY &
INFORMATION PROCESSING ARE CONTRIBUTING TO A
LARG3E EXTENT IN THE PHYSICAL MOVEMENT OF
GOODS PRODUCED IN MANUFACTURING , MINING &
AGRICULTURE SECTORS.
SCOPE OF LOGISTICS
INDIA SPENT NEARLY $ 50 BILLION TO MOVE MATERIAL FROM
ONE USE TO ANOTHER.
SCOPE OF LOGISTICS
THIS SPEED & RELIABILITY IN DISTRIBUTION OF PRODUCTS
& SERVICES CONTRIBUTE TO A GREAT EXTENT IN THE
GROWTH OF A COUNTRY`S DOMESTIC & INTERNATIONAL
TRADE . LOGISTIC COST AS A PERCENTAGE OF GDP ACROSS
THE WORLD IS SHOWN IN THE FOLLOWING TABLE
COUNTRY
KOREA
CHINA
JAPAN
INDIA
FRANCE
UK
USA
16
15
14
13
12
11
10
Logistics Operations
Inventory Flow
Enterprise
Customers
Customer
Service
Manufacturing Procurement
Support
(Purchasing)
Information Flow
Suppliers
Integrated logistics
framework
e-Commerce (1998-Present)
LOGISTIC
HR
A/Cs
Fin.
Uti.
Mark. PPC
QC
IT
M.M
Others
Organizational Functions
In process Log.
Suppliers
Procurement
In Bound Log.
Processing
Distribution
Customer
Warehousing
Information
Inventory Mang.
LOGISTIC FUNCTION
Order Processing
Order processing
Inventory
Product profitability
Transportation integration
Time-based performance
Competitive performance
Transportation
Warehousing, materials
handling and packaging
Facilities network
Manufacturing plants,
warehouses, cross-dock
operations and retail
stores
Information flow
Information flow
identifies specific locations
within a logistical system
that have requirements
Information facilitates
coordination of planning
and control of day-to-day
operations
Logistical information has
two major components
Planning / coordination
information
Operational information
needed to complete work
Logistics Value
Proposition
Service
Cost Minimization
Logistics Value
Proposition
Service
Cost Minimization
Logistics Value
Proposition
Service
Cost Minimization
Logistics Value
Proposition
Service
Procedures
Contact
Information
Discrepancy
Cost Minimization
Logistics Value
Proposition
Service
Timeliness
Availability
Condition
Accuracy
Cost Minimization
Logistics Value
Proposition
Service Benefits
Cost Minimization
Supply chain
synchronization is the
operational integration
of multiple firms across
a supply chain
Nodes
Links
Inventory
Base stock
Safety stock
Performance cycle
uncertainty
Operating conditions
Ways to improve
performance cycle times
Performance cycle
synchronization seeks to
achieve planned time
Delayed or faster performance at any point
performance
along the supply chain results in potential
disruption of operations
Logisti
cs % of
GDP
16.1
198
5
4.22
227
274
20
521
12.3
199
0
5.80
283
351
25
659
11.4
199
5
7.40
302
441
30
773
10.4
200
9.82
374
594
39
1007
10.3
0
Source:
Adapted from
Wilson, 22nd Annual
State
200
12.43
395 Rosalyn 739
46
1180of
9.5
5 Logistics Report Council of Supply Chain Management Professionals
and Penske: Oak Brook, IL, 2011.
201
14.60
396
769
47
1212
8.3
Different perspectives on
cost minimization
Logistical integration
requires achieving six
objectives
simultaneously
Responsiveness
Variance reduction
Inventory reduction
Shipment consolidation
Quality