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Distribution management: Introduction to Logistics Functions
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Distribution management: Introduction to Logistics Functions

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Introduction to logistic functions: Distribution Management serves as a link between procurement, manufacturing, marketing/sales and finance. Proper functioning of this stem synergizes the effects of ...

Introduction to logistic functions: Distribution Management serves as a link between procurement, manufacturing, marketing/sales and finance. Proper functioning of this stem synergizes the effects of all the related activities within an organization.

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Distribution management: Introduction to Logistics Functions Distribution management: Introduction to Logistics Functions Presentation Transcript

  • Chapter-01Introduction to Logistics Functions Introduction to Logistics Functions
  • Distribution Definition• Distribution Management can be defined as that arm or wind of management which serves as a link between procurement, manufacturing, marketing/sales, and finance, proper functioning of which synergizes the effects of all the activities, and absence of which cannot only reduce efficiencies but can lead to chaos in the organization Introduction to Logistics
  • Logistics• Logistics can be defined as the science of organizing the Distribution Function.• Any marketing organization, makes its profits through a combination of activities which includes sales , cost of sales, gross margins, and distribution. Introduction to Logistics
  • Marketing Organization Activities• Sales Rs.xxxxxxxxx• Less Cost Of Sales Rs. YYYYYYY• Gross Margins Rs. ZZZZZZ• Less marketing Cost Rs. SSSSSs• Net Margins Rs. PPPPP Introduction to Logis
  • Analysis of Marketing Activities• Sales is a function of Volume X Net Realization• Volume is dependent on Marketing Inputs Viz. Advertising, promotions, and sales efforts.• Net Realization is dependent on price, taxes and levies• Cost of Sales is an aggregate of Cost of Production Introduction to Logis
  • Analysis of Marketing Activities• Advertising spends have to keep on increasing, consumers have to be constantly indulged with promotions, cost of inputs keep on increasing Introduction to Logist
  • Scope for Reducing CostsA. Process OptimizationB. Optimization of TransportationC. Locating Distribution CentersD. Reducing the overall InventoryE. Improving the turn around of InventoryF. Effective DistributionG. Increasing Customer service levels Introduction to Log
  • Overview of Logistics Management Porter’s Value Chain Introduction to Logistics Functions
  • Value Chain• Inbound Logistics – Receiving, storing, and forwarding inputs to the manufacturing process• Operations – Activities associated with transforming inputs into the finished goods• Out bound Logistics – Collecting, storing, physically distributing products to the subsequent links in the supply chain Introduction to Logistics Functions
  • Value Chain• Marketing & Sales – Providing the condition in which the customers can buy or pick up the products, inducing and encouraging them to buy the products.• Service – Providing service to enhance, maintain the value of the product, involving activities such as installation, repair, parts supply, training etc. Introduction to Logistics Functions
  • Role of Logistics Manager• Improve profits• Increase market share• Improve cash flows• Introduce new products• Rapid coverage,• Better customer service• Materials Management, transportation, warehousing, distribution, inbound logistics etc. Introduction to Logistics Functions
  • Logistics InterfaceFunctional Interests Logistics Interface Business Impact Customer More Service Sales Less Production More Production Constraints Fewer High Asset Finance Investments Low Introduction to Logistics
  • Distribution Planning Where are Audit we Define distribution now? Distributionperformance Mission How do we know Where do arrived? We Want To be? How do we Design getdistribution Develop There? controls Distri. Strategy Introduction to Lo
  • Distribution Mission• The distribution mission can be described as a set of goals to be achieved by the system within a specific product/market context will get shaped by – The product – Production method – Nature of the product – The channel – Outlets – Customer service levels Introduction to Logistics
  • Distribution Strategy Corporate What biz. are objectives we in? Marketing Product/market strategies decisions Customer Cost service effectiveness strategies appraisals CustomerInventory Warehousing Transport Communicationstrategies strategies strategies strategy Introduction to Logist
  • Distribution Planning Cycle Operational Strategic planning Planning Manufacturing Products Customer service Markets Budgets channels Performance measurement Distribution Actual Vs. Plan management Midcourse Inventory corrections control Transport Introduction to Logistic
  • Summary• Distribution Management serves as a link between different organizational department• Logistics can be defined as the science of organizing the Distribution Function.• Porter’s Value chain discusses inbound logistics, operations, out bound logistics, marketing and service and support as well as primary activities Introduction to Logistics
  • Summary• The distribution mission can be described as a set of goals to be achieved by the system within a specific product/market context• In case of distribution strategies one has to examine the options in terms of cost effectiveness Introduction to Lo