Logistics and supply

chain Management
Unit 1
Chapter 1
Introduction to Logistics
management
 Logistics can be defined as right item in the
right quantity at the right time at the right
place .
 Logistics is the process of managing how

resources are acquired, stored, transported to

their final destination.
 The word logistics came from the greek word

logistike meaning the science of computing

and calculating.
 Definition of Logistics
 The process of planning, implementing,
controlling the efficient, effective flow and storage
of goods , services and related information right
from the point of origin to. point of consumption.
 Logistics management is the part of supply chain
management that plans, implements, controls the
efficient effective forward and reverse flows and
storage of goods and services and related
information between the point of origin and point
of consumption in order to meet the customer
requirements.
Origin of Logistics
 Logistics which is termed as military logistics
was originated in the II world war in 1940.
 Military logistics was originated to fight

global enemies and win the war in available

resources and in less time and protect the
military personnel and the country
 Example: British lost the American war of

independence due to bad logistics.

Logistics = Inbound logistics + Materials
management + Outbound logistics
 Inbound Logistics : Various activities that the
firm needs to procure raw materials and parts
from the vendor to the firm.
 Materials management: Managing the inventory
and inventory control of various goods like
raw materials, spare parts, semi finished
products etc.
 Outbound logistics: Various activities that are
associated with physical distribution cycle.
Evolution of Logistics management
 https://youtu.be/LUouKpLtgyw
Importance of Logistics management

 Logistics is the bed rock of trade and

business
 Leads to customer satisfaction through

superior customer service.

 Integrates logistical activities
 Competitive edge
 Logistics loses or wins war
 Supports critical functions like operations and

marketing.
 Logistics costs.
Importance of Logistics management in India

 Indian market has become global market due

to liberalization in 1991.
 Global business has long supply &

distribution lines.
 Changing Indian customer, aware, demanding

and less brand loyal.

 Competition ensures that product

differentiation in term of quality is difficult.

 Product life cycles are shirking
 Indian markets are shifting from sellers to buyers.
 Many consumer products are moving to
commodities market.
 Logistics performance has not been impressive.
 Fruits and vegetable are grown at various places
but do not enjoy access to market.
 India is a large country with less infrastructure.
All the commodities has to travel from FCI
warehouses to consumers through PDS.
Operating objectives of Logistics.
 Rapid response
 Minimum variance
 Minimum inventory
 Movement consolidation
 Quality
 Life cycle support
 Price stabilsation
 Creating Time, Place and Quantity utilities.
 Minimum product damage.
Inbound logistics
Out bound logistics
Distinguish between Inbound logistics and Out bound logistics
Inbound Logistics
 Pre production
logistics activities
 Upstream logistics
 Receiving, storing
disseminating inputs
to the product such as
material handling,
warehousing etc.,
vehicle scheduling and
returns to suppliers –
Activities.
 Movement of materials
from suppliers to
company’s receiving
Outbound Logistics
 Post production
logistics activities.
 Down stream logistics
 Collecting, storing,
physically distributing
the product such as
finished goods,
materials handling,
delivery vehicle
operation, order
processing and
scheduling.
 Movement of
Company’s finished
products from
 It is concerned with  It is concerned with
procurement physical distribution
perfromance cycle. cycle.
 It involves movement  It involves movement
of raw materials from of finished goods from
supplier to company warehouse to
customer.

Inbound logistics Outbound logistics

Reverse Logistics
 Reverse logistics involves the process of
moving a product from the point of
consumption to point of origin
 Flow of goods and services are reversed.
 Reverse logistics has an important tool to

gain competitive advantage.

Examples of reverse logistics

 Goods not meeting the customer

expectations
 TV Malfunctioning
 Customer did not like and hence sent back
 Faulty automobiles back to factories.
 Cold drinks- bottle return
 Furniture for marriage.
 Product packaging or pallets brought back.
 Computer for upgradation.
 Return of unsold goods- newspaper and
magazines.
 Refilling/Reusable packaging: eg: bottles for

milk, gas cylinder, printer Ink cartridges.

 Recycling- Newspapers, magazines and cans

are returned back to the company for the

purpose of recycling.
 Product recall.
 Scientific disposal of waste products.
Reverse logistics
Functions of logistics
 Order processing
 Inventory management
 Warehousing
 Transportation
 Materials handling
 Packaging
 Information Management
 Customer service
Logistics performance cycle
 Procurement Performance cycle -Inbound
logistics
 Manufacturing support performance cycle – In

Process logistics
 Physical distribution performance cycle –

Outbound logistics
Procurement performance cycle
 It involves all the activities associated with
the procurement of raw materials from
vendors.
 It is called as Inbound logistics.
 The various activities are: sourcing, order

placement, transportation, receiving, storage,

Issue.
Manufacturing support cycle
 It provides production logistics
 Between the inbound and outbound logistics
 Mainly concerned with work in progress

inventory.
 Making timely availability of raw materials.
 Transferring finished goods from

manufacturing plant to factory warehouse

once it is produced.
Physical distribution performance
cycle
 It involves all the activities associated with
physically distributing the product to the
customers.
 It is called as Outbound logistics
 The activities involved are: Customer order,

order transmission, order processing, order

selection, order transportation, customer
delivery.
Integrated logistics
 Integrated logistics is a technique which
utilizes various resource and channels in
time.
 There are two inter related activities:
 Inventory flow
 Information flow.
Integrated logistics
Seven pillars of logistics
 Information management
 Transportation
 Inventory management
 Warehousing
 Materials handling
 Packaging
 Network design
Green logistics
 Green logistics is the process of minimizing
damage to environment and society due to
logistics.
 It describes all attempts to measure and

minimize ecological impact of logistics

activities.
 Its aim is to strike balance between the

economic and environmental efficiency.

Green logistics
How to achieve green logistics
 Network optimization
 Alternative mode of transportation
 Alternative fuel.
 Building bypass roads.
 Paper usage reduction.
 New fleet induction.
 Waste recycling and scientific disposal.
The End