Logi project vish (final 1)


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Logi project vish (final 1)

  1. 1. Page | 1 CHAPTER 1 – LOGISTICS 1.1 INTRODUCTION Logistics is the management of the flow of resources between the point of origin and the point of consumption in order to meet some requirements, for example, of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, equipment, liquids, and staff, as well as abstract items, such as time, information, particles, and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation. What is logistics? Logistics is the management of the flow of resource between the point of origin and the point of destination in order to meet some requirements Planning implementing and controlling the physical flow of materials and finished goods from point of origin to point of use to meet customers need at profit. It is an interface between two companies which will fulfill the requirements Logistics can include physical items such as food, materials, equipments,liquids etc. Why logistics? It allows for smoother flow of company processes and procedures increase performance Brings profit to company Increases efficiency
  2. 2. Page | 2 1.2 HISTORY Logistics refers the movement of products or services to a designated location at the agreed upon time, cost, and condition. Over the years, an entire industry has developed and today companies hire professionals with training and experience in the field. Throughout the history of logistics, the effective process manager has been strategic and able to take the initiative to provide results within tight deadlines. Origins Ancient Roman and Greek wars are the backdrop to today's logistics. Military officers called "logistikas" were responsible for ensuring the supply and allocation of resources, so that soldiers could move forward efficiently. The art and science of logistics continued to find military applications throughout the years since then, and most importantly during World War II. The principles of military logistics have been refined for use in many industries. After WW II, business awakened to the importance of logistics in adding value to products and the marketing and manufacture of them. In the 1960s, it began to appear in business literature in discussions about physical distribution, with a focus on outbound activity. The next step was a focus on coordinating all aspects of supply chain management.
  3. 3. Page | 3 1.3Logistics Activities Today Today there are many activities that are included as part of logistics: • Filling orders • Distribution and transportation of product • Storage and warehousing • Physical location of plants and warehouses • handling materials • purchasing • Production planning • Service and parts support • Customer service Because of the critical nature of many of these activities, companies often rely on outsourcing some or all of their supply chain management activities. This has resulted in the development of third party logistics companies for the most efficient movement and tracking of goods.
  4. 4. Page | 4 1.4Logistics in different areas Logistics recognizes that all the activities of material movement across the business process areinterdependent and needs close coordination and these are to be maintained as a system and not the functional silos. System is shownas logistic mix including following functional areas. Order processing Information flow Warehousing Inventory control Packaging Transportation ORDER PROCESSING Order processing starts with the receipt of an order from a customer. It may be obtained by a salesperson, be telephoned in, or arrive by mail. Regular buyers and sellers are often linked electronically. As the buyer‘s inventories become low, an electronic purchase order is generated. It is communicated to the seller, whose computers will determine that the goods are available, and the seller will inform the buyer, still using electronic methods, that the order will be filled and shipped by a certain date. The first step in most order-processing systems is to verify the accuracy of the order—that is, to make certain that the document contains no internal errors that might mean the customer was uncertain about what he or she was ordering. The next step is to verify the customer‘s credit or ability to pay. After determining from which inventory point to ship the goods, instructions are sent to that warehouse to fill the order. At the warehouse an ―order picking list‖ is given to a warehouse worker, who assembles the specific order. In the packing area, it is checked and packed for shipment, and the package is labeled. The traffic manager prepares the transportation documents and notifies a carrier to pick up the shipment. An invoice for the goods is sent to the buyer, and various inventory and financial records are updated. The shipper uses the term ―order cycle‖ to indicate the span of time between receiving and shipping the order. The buyer uses the phrase to indicate the span of time between placing and receiving the order.
  5. 5. Page | 5 INFORMATION FLOW The physical distribution managers continuously need up-to-date information about inventory, transportation and warehousing. For example, in respect on inventory, information about present stock position at each location, future commitment and replenishment capabilities are constantly required. Similarly, before choosing a carrier, information about the availability of various modes of transport, theircost, services and suitability for particular product is needed. About warehousing information with respect to space utilization, work schedules, unit load, performances etc. is required. In order to receive all the information stated above, an efficient management information system would be of immense use in controlling costs, improving services and determining the overall effectiveness of distribution. Ofcourse, it is difficult to correctly assess the cost of physical distribution operations. But if correct information is available it can be analyzed systematically and a great deal of saving can be ensured. INVENTORY MANAGEMENT Definition of 'Inventory Management' The overseeing and controlling of the ordering, storage and use of components that a company will use in the production of the items it will sell as well as the overseeing and controlling of quantities of finished products for sale. A business's inventory is one of its major assets and represents an investment that is tied up until the item is sold or used in the production of an item that is sold. It also costs money to store, track and insure inventory. Inventories that are mismanaged can create significant financial problems for a business, whether the mismanagement results in an inventory glut or an inventory shortage. Storage for inventory If the company was to produce certain percentage of whole years output within in shorter time,theywould need to tremendous labor and materials. So they need lot of materials within shorter period. The goods they can get only from material inventory instead, they may produce in slower schedule and stock them as inventory. Some type of organization may carry inventory to ensure promptly delivery to customers.
  6. 6. Page | 6 Inventory decisions The important decisionsthat every company has to take regarding inventory is to order the right quantity at right time and minimum cost. Right quantity means how much quantity to be ordered keeping in view the demand, supply and cost aspect. TRANSPORTATION Transport or Transportation is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations. Transport is important since it enables trade between people, which in turn establishes civilizations. Transport infrastructure consists of the fixed installations necessary for transport, including roads, railways, airways, waterways, canals and pipelines and terminals such as airports ,railway stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations) and seaports. Terminals may be used both for interchange of passengers and cargo and for maintenance.Transportation helps to widen the scope of market and thereby widen the scope of business. Transportation helps to maintain price stability by ensuring proper balance between demand and supply. Due to efficient transport system, perishable goods can be quickly transported from one area to the other area. WAREHOUSING A warehouse is a commercial building for storage of goods. Warehouses are used bymanufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed ones standard pallets loaded into pallet racks. Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing and production.
  7. 7. Page | 7 FUNCTIONS OF WAREHOUSING 1. Receiving goods 2. Identifying goods 3. Sorting goods 4. Dispatching goods to storage 5. Holding goods 6. Selecting, retrieving, packaging 7. Marshalling goods 8. Dispatching good 9. Preparing records and advices
  8. 8. Page | 8 1.5 OBJECTIVE OF LOGISTIC MANAGEMENT RAPID RESPONSE F-flexibility objective of an organization: Some companies measure this as response time to customer‘s order. On an average how much time do we need to fulfill one particular type of customer‘s order in a year? This is a measure of rapid response.Logistics should ensure that the supplier is able to respond to the change in the demand very fast. Entire production should change from traditional push system to pull system to facilitate rapid response. Instead of stocking, the goods and supplying on demand, orders are executed on shipment to shipment basis information Technology plays an important role here as an enabler. IT helps management in producing and delivering goods when the consumer needs them. This results into reducing of inventory and exposes all operational deficiencies. Now the management resolves these deficiencies and slashes down costs. IMPORTANCE OF LOGISTICS Logistics is an essential function in every organization. It is easiest to imagine in a manufacturer, with forklift trucks unloading pallets from Lorries and moving them around warehouses – but the same principles apply in any other organization. When a rock band goes on tour they carry huge amounts of equipment. Procurement buys everything that is needed on the tour, transport pack it andMove it to the next destination, receiving make sure that everything arrives safely, warehousing keeps things safe until they are needed, materials handlingMoves things between trucks and the stage, location decides where to perform. The same types of decision are made with even the most intangible service, and An insurance company decides what kind of branch network to have, where to Locate offices, who to buy telephone and other services from, how to deliver information to customers, and so on. Christopher15 supports this view, saying that ‗Logistics‘ has always been a central and essential feature of all economic activity. ‗Shapiro and Heskett16 agree, saying that, ‗There are few aspectsof human activity that do not ultimately depend on the flow of goods from
  9. 9. Page | 9 point of origin to point of consumption.‘ Bowers OXET al.17 say that, ‗It is difficult to visualize accomplishing any marketing, manufacturing or . . . commerce without logistics.‘ To put it simply, without logistics, no materials move, no operations can be done, nothing is made, no products are delivered, and no customers are served. Figure 1.9 suggests the role of logistics is an essential part of every trade. Customers generate demand for products, which operations create using necessary Resources – and logistics move everything around this loop. Not only is logistics essential, but it is also expensive. Unfortunately, it is difficult to say exactly how expensive, because normal accounting conventions do Not separate logistics costs from other operating expenditure, and there is always disagreement about the activities to include. As a result, very few organizations can put precise figures on their logistics costs, and many have almost no idea of the amounts involved. One obvious point, though, is that expenditure onLogistics varies widely between different industries. Building materials, such as Sand and gravel, have very high logistics costs compared with, say, jewelry, Pharmaceuticals and cosmetics. We have already mentioned the rule of thumb that logistics accounts for10–20% of GDP, but you have to interpret such figures carefully. Malone18Suggests that the actual cost of US logistics reached US$1.2 trillion by 2005,accounting for 10% of GDP – but this estimate focuses on transport, which only accounts for 60% of total logistics costs.19 The UK government says that 11% ofthe GDP comes from wholesale and retail trades and another 4% from transport And storage, 20 suggesting that overall logistics costs are much higher.These national figures translate into high costs for each company, and although they differ in detail, everyone agrees that logistics is very expensive. Whether itis getting more expensive is open to debate. Some people say that fuel, land,safety, environmental protection and employee costs are rising and making logistics more expensive. They argue that this is a long-term trend that will inevitably continue. An opposing view says that improvements to logistics are more than compensating for price rises. This says that new and more efficient methods – such as lower stocks, more efficient vehicles, fewer empty journeys-business, lower overheads, and so on – mean that logistics costs are falling as a proportion of product value. The Council of Supply Chain Professionals21reports a mixed
  10. 10. Page | 10 picture suggesting that the cost of logistics in the USA more than doubled over the 20 years to 2006, but then fell from 16% to 9% of GDP. This is probably a common pattern, suggested that in 1980 logistics accounted for 32.5% of the UK‘s GDP, 22 but is now considerably lower.A broader survey in Europe23 suggests that logistics costs fell from an average of 14.3% of sales revenue in 1987 to 7.5% in 2003, but then began rising again
  11. 11. Page | 11 CHAPTER 2 FREIGHT FORWARDING 2.1 MEANING A freight forwarder, forwarder, or forwarding agent, is a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. . Freight forwarding services guarantee that products will get to the proper destination by an agreed upon date, and in good condition. The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability. A freight forwarding service generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder's bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination. A forwarder does not move the goods but acts as an expert in supply chain management . A forwarder contracts with carriers to move cargo ranging from raw agricultural products to manufactured goods. Freight can be booked on a variety of shipping providers, including ships, airplanes, trucks, and railroads. It is not unusual for a single shipment to move on multiple carrier types. 'International freight forwarders" typically handle international shipments. International freight forwarders have additional expertise in preparing and processing customs and other documentation and performing activities pertaining to international shipments. Information typically reviewed by a freight forwarder includes the commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, and/or transshipment. Much of this information is now processed in a paperless environment.
  12. 12. Page | 12 The FIATA shorthand description of the freight forwarder as the 'Architect of Transport' illustrates the commercial position of the forwarder relative to his client. In Europe, some forwarders specialize in 'niche' areas such as rail-freight, and collection and deliveries around a large port.Some forwarders handle domestic shipments only.
  13. 13. Page | 13 2.2 OVERVIEW OF FREIGHT FORWARDERS’ RESPONSIBILITIES Freight forwarders provide transport solutions to businesses wishing to send packages, crates and containers from one country to another.Forwarders act on behalf of importers and exporters to get their client‘s goods to their destination on time and in good condition. This means booking cargo with shipping lines, airlines, and rail or road carriers. Some freight forwarders have their own road transport and may actually carry the goods themselves. A forwarder‘s other responsibilities include preparing and checking bills of carriage, arranging insurance, ensuring the lowest possible customs charges are levied and - where necessary - arranging storage.This guide shows how trading conditions and insurance are used to limit the financial risk for forwarders. It also explains international trade finance and International Commercial Terms. TRADING CONDITIONS AND LIMITING LIABILITY FOR FREIGHT FORWARDERS All businesses are subject to a wide range of statutory regulations - such as employment law, health and safety, public liability and accounting standards. There are also legal issues which specifically affect freight forwarders and their customers. The role of the freight forwarder is to make arrangements which enable goods to travel from seller to buyer. This often involves a journey of several thousand miles, using more than one mode of transport. There must have been a sale - and contract - agreed between a seller and buyer for the supply of goods before a freight forwarder is needed. Many of the elements of this contract impact directly on the nature and detail of the contract eventually agreed between the forwarder and their client - which could be the seller or buyer of the goods.
  14. 14. Page | 14 TRADING CONDITIONS To ensure the client and the forwarder fully understand - and agree upon - their responsibilities in the transportation process, the client must be made aware of the forwarder‘s trading conditions. This needs to be done before details of the contract are agreed - ideally at the quotation stage. Trading conditions establish the circumstances under which any service is provided and usually include limiting the forwarder‘s liability in the event of a claim against them. Failure to do this could leave the forwarder with unlimited liability - which could prove very costly. Trading conditions also: ensure the client knows their goods are not automatically insured provide safeguards to help ensure the forwarder is paid once the job is done protect the forwarder if the client fails to fully disclose the contents of a consignment, egg hazardous material or goods of an exceptionally high value 2.3 FREIGHT AGENTS - AVOIDING THE RISK OF CUSTOMS CIVIL PENALTIES WHEN ARRANGING EXPORTS Freight agents act as third parties in arranging exports on behalf of exporters. These agents are advised to ask for certain information from the exporter so they do not face the risk of Customs Civil Penalties (CCPs). CCPs could apply because freight agents, as representatives of exporters, also hold responsibility for the accuracy of information in documents and/or the authenticity of documents attached to a shipment. HM Revenue & Customs (HMRC) recommend that freight agents should routinely request the following information from exporters: Their UK Economic Operator Registration and Identification (EORI) number (this used to be TURN) for use in box 2 of the declaration - see the guide on the Economic Details of whom the goods are to be consigned to, their name and address in full A commercial reference that can be incorporated into the Declaration Unique Consignment Reference (DUCR) to assist with the export audit trail
  15. 15. Page | 15 Details of where the goods are to be exported, i.e. country of final destination Shipping or flight details (if known) Correct value of goods and correct currency code The Commodity Code if known, and a clear and unambiguous description of the goods, their quantity, marks and numbers. If the goods have been previously imported, or are later to be re-imported to a Customs Relief, you need to know so that the correct export procedure code (CPC) can be applied. If an incorrect CPC is used, it can lead to any Customs relief on Duty and VAT granted at import, being liable for payment/repayment by the exporter or yourselves. If the appropriate CPC is known, then this should be quoted on the export papers supplied by yourselves yet, as specialists, you may still wish to verify that the code quoted is correct Any reference numbers previously issued by HMRC such as Inward Processing Relief, Outward Processing Relief authorizations or previous declarations should also be provided After checking all the information provided by the exporter, you should also: Where a UK EORI number is not provided, confirm that the exporter is not registered and give consideration to the correct procedure to be used for the goods - i.e. is the export a private export or, if commercial, should the exporter first obtain an EORI number? Incorrect use of PR or UNREG terms may restrict your clients‘ ability to zero rate their goods for VAT purposes Check that the destination is a third country and not an EU member state. Many exporters are unaware of which countries are members of the EU and look to their agents to confirm whether the goods qualify for export Ensure that an item is entered for each Commodity and not bulked for convenience Ensure that a declaration is made for each exporter and not bulked for convenience sake (unless approved to do so within Memorandum of Understanding (MOU) approved procedures). Where identity of the exporter cannot be confirmed, VAT zero rating may be affected. For more information on using an MOU, see the guide on International Trade Fast Parcel Operators When receiving details from your customers, please use any DUCR provided. If aDUCR is not provided then the guidance in the Tariff should be followed. In the air environment, air waybill (AWB) numbers are often used in the latter part of theDUCR yet
  16. 16. Page | 16 in other freight areas it is helpful, for audit purposes, to use exporters commercial reference(s) Owing to the increased use of official electronic records by HMRC, they strongly recommend that, to assist exporters, the actual DUCR or Master Unique Consignment Reference (MUCR) used or the CHIEF Export Entry Reference (EPU, Entry Number & Date) is notified to your clients. HMRC need to be able to trace the shipment through the traders‘ records to enable them to help verify claims for VAT zero rating on exports.Many shipments are notified via inventory booking references so these are also worth confirming with Port loaders. Where goods have been consolidated, the higher levelMUCR should always be used. MANAGING THE RISKS OF FREIGHT FORWARDING Freight forwarders have within their care - or control - goods and documents owned by third parties that often represent large sums of money. This means good risk management is the key to running a successful forwarding business.Freight forwarders can limit their liability and cover some of the risks with insurance policies. However, it can be easy to invalidate the benefits of limited liability through carelessness or ignorance. Also, some risks are uninsurable - such as losses caused by terrorism.Risks can never be eliminated completely, but with good practices and training, they can be minimised to acceptable levels. This reduces the likelihood of unwanted claims that could severely reduce profits.It is important that forwarders bring their trading conditions to the attention of the customer before the contract is concluded. Failure to do so could prejudice insurance cover and invalidate the protections of limited liability. Other areas of the business where a forwarder needs to establish clear procedures - which are understood by any staff involved - include: getting written instructions from customers controls over the issue and release of documents managing subcontractors - ideally involving written contracts handling dangerous goods - for more information, see the guide on freight forwarding - moving goods cargo security insurance claims
  17. 17. Page | 17 OPTIMIZE THE VALUE OF YOUR LOGISTICS DATA Transportation data used in supply chain analysis typically includes product volumes, lanes, cost per shipment and much more. Often, your freight audit and payment system is your only source of consolidated shipping and expense data – for domestic & international; inbound andoutbound.Cass turns large amounts of logistics data into valuable business intelligence that enables critical expense management initiatives and more informed decisions. Our analytics solution, CassPort, organizes data into a hierarchical OLAP (On- Line Analytic Processing) structure. The cube structure allows you to view data from multiple dimensions or perspectives. For example, you might want to view spend by product category, by location and mode. You can sort and filter the data to look for interesting patterns and trends. Such flexibility is the reason CassPort is frequently cited as the industry‘s most powerful BI engine. It‘s more detailed, more user friendly and more robust than any other. The data provided in CassPort includes: Expense detail down to the accessorial level Invoice and document images, including EDI templates Shipment details (origin, destination, mode, weight, SKU, stop-off location, etc.) Cost allocation detail for each move Payment details (including ACH/check number, adjustment amount and reason, scheduled payments, etc.)
  18. 18. Page | 18 CassPort gives shippers one authoritative source of accurate spend and related data. Slice and dice the details any way you like. HOW CAN YOU USE THIS DATA? Once you have visibility to reliable transportation data, you can Prepare for contract negotiations Reduce accessorial expenses Reduce or eliminate rogue spending Determine landed costs Feed upstream supply chain and financial analysis Improve control of inbound spend Aid in location analysis Understand each component of your transportation Improve capacity planning FREIGHT AUDIT AND PAYMENT Achieve Best Practices in Freight Audit and Payment A best-in-class freight audit and payment solution gives shippers the tools they need for effective transportation expense management. From easing the administrative tasks of invoice processing, to creating cost savings through invoice audits, to delivering actionable business intelligence, the benefits of an automated, best practice freight audit and payment solution are many. Choosing a freight audit and payment provider is a strategic decision. Although many aspects of the solution are certainly tactical and task-oriented, the ability to deliver complex solutions and powerful business intelligence is not. Why Cass is the Industry Leader in Freight Audit and Payment
  19. 19. Page | 19 After more than 50 years, Cass remains the largest provider, as well as the innovator, in the freight payment industry. The world‘s largest shippers continue to choose Cass for the following reasons: Expertise in all modes, including ocean, rail, parcel and multimodal Processing and reporting for all move types, including outbound, inbound, third party, intercompany and more Advanced accounting capabilities Global freight payment for all geographies and currencies Commitment to process improvement Advanced systems for the most complex transportation infrastructures and business rules Detailed and accurate business intelligence to support supply chain analysis Financial strength and stability, which gives Cass the ability to scale our operations to meet even the largest shippers‘ needs GLOBAL FREIGHT PAYMENT SOLUTIONS Cass: Your Global Freight Audit & Payment Provider Organizations with global transportation networks have much to gain by consolidating freight invoice payment with one provider. Global visibility and operating standards top the list. One Authoritative Source of Global Spend Data Visibility to global transportation spend is essential for effective supply chain management. The single best source for gaining this visibility is a robust, best-practice, global freight payment solution. Our global business intelligence platform, CassPort, provides an integrated, global view for transportation spend, usage, and trend information. Asingle source of global spend information will help you: Gain a better understanding of how your transportation costs differ country to country
  20. 20. Page | 20 Bring clarity to the complex business of managing ocean, forwarder and heavy air shipping Make accurately-informed international supply chain decisions Better understand the impact of freight costs and volatile fuel costs on individual products or raw materials Determine landed costs for global shipments A Global Standard for Invoice Payment Standardizing processes globally brings efficiency and control to organizations. So does decreasing the number of vendors providing critical services. Cass‘ best-practice systems create uniformity in reporting, accounting practices, invoice audit rules and much more. THE CASS GLOBAL SOLUTION All origin-destination pairs All currencies Currency conversion Single global reporting platform World‘s largest global benchmarking database
  21. 21. Page | 21 FREIGHT RATING Superior Freight Rating Tightens Cost Controls The Cass freight rating application, Ratemaker,is used to rate tens of thousands of shipments each day for movements all over the world. Meeting the highest standards in freight rating, Ratemaker supports all modes, complex geographical and mileage exceptions, all currencies all rate types and accessorial charges. During implementation, the Cass account team assists each client in extracting rate information from its contracts and loading it into Ratemaker, the Cass freight rating engine, to produce accurate rate tables. Rates must be precise and well maintained in order to facilitate an accurate audit. Cass leverages extensive expertise in understanding all transportation modes and billing terms, including Incoterms that will affect rating. A comprehensive freight rating system is essential to maintaining tight cost controls. The goal in freight audit and payment is to automate processes as much as possible. Freight rating is key to achieving a high level of automation. Your freight rating system serves two main functions; it enables the automated audit of carrier invoices and freight accrual calculations. Freight Rating for Invoice Audit Purposes Cass clients inform Cass of their shipment activities electronically. Through secure system integration between the Cass freight payment system and the client‘s transportation management systems (TMS), our clients transfer shipment files. Using Ratemaker, Cass rates the cost of each shipment and creates a record within our freight payment system to later audit against received freight invoices. Freight Rating for Accrual Purposes Cass clients can easily accrue for logistical expenses that have been incurred but not yet paid. Cass provides accruals for:
  22. 22. Page | 22 Shipments in which an invoice has been received, but not yet paid, because it is scheduled for future payment. Shipments that have taken place, but an invoice has not yet been received. In this case, the Cass freight payment system is ―aware‖ of the shipment because it has previously received a shipment record from the customer‘s TMS or other system. The Cass freight audit and payment application reviews all invoices and distinguishes between paid and non-paid shipments, and generates accrual files for each client. These detailed files, customized to each client‘s accounting rules, are delivered directly into the client‘s ERP or accounting system.
  23. 23. Page | 23 CHAPTER 3 COMPANY PROFILE 3.1 INTRODUCTION ARABITAL was born in 1989 in Milano, European center of all international business. Arabital's President and partner Mr. EmilioCambiati has 30 years of experience in the Middle Eastern market. He is in close contact with clients and agents alike and is experienced with all transport needs whether it be special project to container movement to any Middle Eastern port.Thanks to the president experience Arabital has thus achieved a leading position throughout the Middle East and it is recognized in the forwarding world as closely linked to the Middle Eastern workplace. Arabital‘s Managing Director and partner Dr. Francesco Gariboldi is graduated master bachelor's degree in Business Administration at the Bocconi University in Milan. His financial background has been fundamental in the difficult task of coordinating the administrative, financial and fiscal sector of arabital‘s operations, harmonizing financial and company strategy with the synergy and resources available.In this way ARABITAL and its partners have built a commercial and financial alliance ideally placedto achieve a prestigious operating level. We ―Arabital logistics India private limited‖ are one of the most trusted companies engaged in rendering logistics solution and cargo transportation services such as ocean freight forwarding services, professional freight forwarding services, air and sea freight forwarding services, domestic freight services, open top shipping container, shipping reefer containers, flat rack container, flat rack collapsible containers, cargo transportation services, hazardous material packaging , hazardous handling agent, dangerous goods transportation and many more. Our logistic services are known for being reliable, planned and cost-effective. We operate through 90 offices across the globe, which enables us to fulfill the good movement requirements to that clients. Due to our strong financial position we are able to coordinate administrative, financial and fiscal sector to accomplish company objectives.
  24. 24. Page | 24 Our organization has a separate warehouse, where different types of client‘s products can be safely stored. While rendering our logistics services, we are abide by norms laid down by the regulatory bodies. Moreover, we are able to timely deliver our consignments as our business is spread across Central America, North Europe, the Middle East, South-America, south/west Europe, south East-Asia and North America. We are backed by 1000 dexterous professionals, who enables us to carry out the entire business operations in a streamlined manner. Owing to their constant support, we have been successful in creating a remarkable position in this domain.
  25. 25. Page | 25 Basic information Business type: service provider Year of establishment: 1989 Legal status: limited company Warehouse services: we are offering warehouse services. The system includes modules to cover all complex operations within the freight forwarding industry covering air freight, sea freight, finance, sales, stores and hard functions. Logistics services: Our logistics services is the only solution that can address all your requirements and much more with the highest level of flexibility. Freight services: we are offering freight services catering to freight forwarding industry developed using latest technology. The system includes modules to cover all complex operations within the freight forwarding industry covering air freight, sea freight, finance, sales, stores and hard functions.
  26. 26. Page | 26 Freight forwarder: As a freight forwarder are you worried of managing the multi-location operations we wants to have an integrated modular facility to avoid double entries, a system that dose not allow you to fail in any of the activities that you are suppose to perform. Forwarding and logistics services is the only solution that can address all your requirements and much more with the highest level of flexibility. Freight forwarding is a service catering to freight forwarding industry developed using latest technology. The system includes modules to cover all complex operations within the freight forwarding industry covering air freight, sea freight, finance, sales and stores.
  27. 27. Page | 27 3.2 CORPORATE PHILOSOPHY OUR MENTORS We have progressed immensely under the guidance of our mentor ―Mr. EmidioCambiati‖ and ―Dr. Francesco Gariboldi‖. Mr. EmidioCambiati holds vast experience of 30 years in the Middle Eastern markets. Being the president and partner of our organization, he maintains close coordination with the clients and agents, so that the containers are safely delivered to the clients' premises. Dr. Francesco Gariboldi is the managing director and a partner, who is responsible for coordinating the administrative, financial and fiscal sector of our company. From Bocconi University in Milan, he has completed his master bachelor's degree in business administration. With the maximum utilization of available resources, he has achieved the company objectives. Our Mission "Our mission statement is to be the most efficient and comprehensive distribution services network through a continuous effort in upgrading the key elements that form the very basis of service. Service Portfolio We are one of the leading organizations, engaged in rendering Cargo Transportation Services. Our organization has wide spread network spread across the different parts of the globe, which helps us in transporting clients goods, within the predetermined time-frame. We are capable of transporting goods by the medium of road, air and sea transport. Moreover, we handle all kinds of complex documentation issues, while rendering these services.
  28. 28. Page | 28 SERVICES COMPRISES: • Sea Freight Services • Air Freight Services • Project Forwarding • Freight Forwarding Services • Custom Clearance • Transport Logistics • Air Import & Export • Warehouse Service Some highlighting features of our services are: • Consignment handled are insured ensuring no loss to customers • Deliveries made within shortest time period • "Door to door" delivery services • 24 hours cargo pick up services by use of well maintained vehicles • Custom clearance services delivered for transportation of cargo through air • Based on specific cargo requirements as well as their budgetary constraints, carrier Options provided to client • Competitively priced services We provide Air Freight services to many international destinations such as North America, Latin and South America, Europe, Australia, New Zealand, the Middle East, the Indian Sub- Continent, and South Africa.
  29. 29. Page | 29 The steps of our Sea Freight Services are: • Cargo Booking & Pick-up • Delivery Verification • Destination Customs Clearance • Export Customs Clearance • Export Documentation Preparation • Forwarding • Freight Consolidation • Insurance Services OUR TEAM We have a team of 1000 expert professional, which is well aware about the business demands and service implications. Hence, they can fulfill the logistic demands of various business segments like: • Institutional establishments • Export as well as import establishments • Corporate business houses • Other companies who requires supply chain and logistics services In order to provide status report of import as well as export shipments, our team members follow through each & every shipment.
  30. 30. Page | 30 Team: Quality controllers R & D personnel Packaging experts Administrative officials Unskilled and other support service personnel Skilled workers Technical & Semi Skilled Workers Moreover, these professionals work hard to attain the organizational objectives, under the able guidance of the management. QUALITY ASSURANCE Being a quality conscious organization, we ensure that the Cargo Transportation Services are rendered as per the guidelines laid down by the regulatory bodies. We ensure complete safety of client‘s consignments during transportation. Our organization has a capacious warehouse, where the client‘s products are stored safely. Being aware about the custom rules, we handle complex paper works for our clients. Moreover, our quality controllers ensure that the logistic services are rendered to the clients on the basis of ethical grounds. We undertake the following steps, to maintain consistency in our logistic services: Providing complete logistic solutions that fulfill complete packing assistance & cargo movement requirements Well defined process approach for safety of shipped consignment Maximum precaution is taken while packing as well as unpacking of breakable and bulk goods
  31. 31. Page | 31 FACILITIES We have required facilities that help us in rendering effective Cargo Transportation Services to the clients. Our company operates through 90 offices across the globe, which enables us to render the logistic services to the clients. These offices are equipped with latest communication facilities, which enable us to communicate with partner, colleagues and customers. Our company provides solution for cargo, storage transportation and clearing of all kinds of perishable & delicate goods, electronic components and heavy duty machines. Moreover, for successful handling of stocks in safe manner, we have set up a voluminous warehouse. We have developed excellent warehouse management system to handle our processes. Our warehouse professionals conduct the task of reports information and data-collection on inventories, processing and order placement. BUSINESS NETWORK The business network of our company is spread across the different parts of the world, enabling us to render effective logistic services. We have 90 offices across different destination for managing the consignments transported to various international destinations. Owing to our excellent network, we are capable of transporting goods safely to client‘s premises. The network of our company is spread across the following international destinations: East Asia Central America East Europe North Europe South/West Africa Middle East North Africa South America East/Middle Africa South/West Europe Caribbean South East Asia Indian Subcontinent North America Australia/NZ
  32. 32. Page | 32 We execute our logistic services through the below mentioned offices: 6 African offices 17 Middle East offices 22 Far East offices 9 Indian offices 6 Italian offices 26 European offices 3 North American offices Client Satisfaction Being a client centric organization, we ensure that the requirements of the clients are fulfilled in the best possible manner. Our logistic services are offered to the clients at cost effective rates. By use of well maintained vehicle, we ensure 24 hours cargo pick up. We have a network spread across Australia/NZ, the Indian Subcontinent, Caribbean, East/Middle Africa, North Africa, South/West Africa and East Europe, which enable us to timely deliver the shipment. Moreover, we have set up 90 offices across the different corners of the globe to serve the clients more efficiently. We also follow a set of actions for ensuring highly effective services to our clients such as: Answering inquiries of clients Complete documentation support Consultancy for most effective mode of shipment Complete customs clearance made prior to shipment Constant tracking of cargo during transit stage Timely delivery
  33. 33. Page | 33 WHY ARABITAL? Being a renowned Freight Forwarder company, we fulfill the goods movement requirements of the clients regarding packaging, transportation, warehousing, loading & unloading and insurance of goods. We have attained immense market appreciation, owing to our effective logistic services. Some our strengths, which differ us from our competitors are: Rich industry experience in good movement and various aspects of relocation Operations handled by experienced industry professionals Delivering efficient, reliable and affordable logistic solutions, we adopt consistent service approach Extensive destinations covered in India and abroad Extensive experience in successfully handling different commodities Customer centric business policy and actions Committed to achieve customers' delight Highly efficient working procedures Strong internal working systems
  34. 34. Page | 34 Import/Export Sea Freight General Agent of Arabital Lines Corporation Full container load service (FCL) + consolidation service, less than container loads (LCL) to/from Europe, Middle Eastern countries and Far Eastern countries CFS Operation in all our warehouses Cargo expediting: Readiness date Vessel departure and arrival details Documentation flow Final delivery at site Door to door service Cargo quality control center for big customers Packing Service Warehousing Customs clearance Embassy and consulate legalizations CFS import operations at port area, or handled in all our Arabital warehouse
  35. 35. Page | 35 3.3FORWARDING PROCEDURE In this procedure initially the exporter or the shipper (who wants to export the goods)contacts a particular CHA by sending all the details of consignment such as port of loading and port of discharge, nature of contract, insurance, freight, gross weight, net weight, description of goods will be exported. Total amount of government benefits will also be allowed.The CHA then informs the particular freight forwarding agent about the proposal. The forwarder then contacts the shipping company regarding the vessel, containers etc. and then sends the quotation to the CHA.The CHA forwards it to the shipper. If he agrees the order is then finalized and the final booking of the containers is being done. The shipping company then send a booking list to the forwarder which containsdetails such as the nature of product, size of container, vessel, port of loading,port of destination etc. The forwarder the contacts its transporter to collect the empty containers from the port and Then goods are stuffed and arrangement are made to send containers in load port. After getting containers inside the port goods are loaded on planned vessel for its transport towards destination. After that bill of lading is released from carrier arranged for transporting of goods. The main documents required during this procedure are: 1. Invoice packing list 2. SDF form (statutory declaration form) 3. Shipping bill In order to carry out any export procedure the export company/forwarding agent needs to create an A.D code at the initial stage that is during the first consignment…and the A.D code is then valid till the existence of the company/forwarding agent. The documents required for generation of A.D code are: 1. IEC Copy 2. Bank details 3. Pan card of organization
  36. 36. Page | 36 4. Authority letter DOCUMENTATION TO, THE DY COMMISSIONER OF CUSTOMS EDI SECTION, EXPORT DEPT. NHAVA SHEVA. SUB:-A.D CODE AND ITS IFS CODE REIGN. Respected sir, With reference to above, we are enclosing herewith the relevant document for and code, drawback A/C and IFS. Code registration We here by our authorize CHA STANDARD SHIPPING AGENCY 11/1010, HANDLE THE SAME ON OUR BEHALF. Thanking you, Yours faithfully Bank account registration form (For drawback purpose)
  37. 37. Page | 37 TO BE TYPE ON BANK LETTER HEAD NO HANDWRITING ALLOWED DT. The Asst. Commissioner of Custom Export Dept, NhavaSheva, Sub - Registration of AD. Code, DBK A/C. & I.F.S. CODE This is to certify that the M/S. ------ maintaining Current Account in our (Branch name) since ----- IEC NO : ---- BANK NAME : ---- BANK ADD : ---- A/C. NO : ---- A.D.CODE NO. : ---- IFS.CODE NO. : ---- We certify that the above details are correct. For: (EXPORTER name) For: (bank name) proprietor
  38. 38. Page | 38 AUTHORITY LETTER TO CHA TO, The DY.COMMISSIONER OF CUSTOM EXPORT/SIIB DEPT. J.N CUSTOM HOUSE DISR: RAIGAD Sub-authority letter for export custom clearance Dear Sir We hereby authorize you, M/S.STANDARD SHIPPING AGENCY(CHA NO.;11/1010)as our customs house agent henceforth to represent us in customs to complete customs and other related formalities in connection with our export consignments. IEC.NO. ------ PAN NO------- Thanking you Yours faithfully Exporter name and stamp
  39. 39. Page | 39 COMPANY NAME IEC NO: IFS NO: BANK NAME: BANK ACCOUNT NO: BANK ADDRESS: A.D CODE NO: I declare that the above details are correct. For – (PARTY NAME) PROPRITOR (NAME) We certified that the above details are correct Signature of the bank manager along with the official seal no.
  40. 40. Page | 40 CHAPTER 4 IMPORTANT LOGISTIC FUNCTIONS OF ARABITAL 4.1FUNCTIONS 1-TOTAL LOGISTICS Total Logistics is an independent management consultancy specializing in all aspects of commercial supply chains. Our work encompasses the complete scope of logistics, from strategy definition to implementation and project management. Supported by class-leading modeling tools, our experienced consultants deliver step change improvements to our customers' operations. Our experience covers all industry sectors, from electronics to FMCG, heavy industry, automotive and specialist retail. Our clients comprise major companies such as Nestlé, Adidas, Coty, TK Maxx, Oxford University Press, Tesco, Unilever, Serco and Coca-Cola Hellenic. Arabitaloperate on an international scale and have offices in the middle- east and gulf countries, Specialties- Supply- chain, logistics, consultancy, network modeling, distribution strategy, warehouse design, inventory management, benchmarking, project management, change management 2.SEA FREIGHT FORWARDING
  41. 41. Page | 41 Our organization provides different types of Sea Freight Services to the clients at cost effective rates. We are associated with reliable carriers, which enable us to safely deliver clients' goods within the predetermined time frame. Our organization controls different types corridors for better coverage, cost-effective rates, more sailing and flexible closing. Goods are transported on reliable liners and till the final destination, we take maximum care of goods. Advantages Export license Commodity inspection Customs clearance Prompt delivery Careful transportation 3.-Warehouse Services We are offering Warehouse Services. The system includes modules to cover all complex operations within the freight forwarding industry covering air freight, sea freight, finance, sales, stores and hard functions. Warehouse Rental Services We are engaged in rendering Warehouse Services to the clients, so that they can safely store their goods. Our services are availed by renowned manufacturers, traders and
  42. 42. Page | 42 suppliers from different parts of the country. Moreover, our warehouse is free from pests and rodents as we take various pest cleaning measures. Bonded Warehouse Services We are one of chief organizations when it comes to providing all kinds of temporary Warehousing services. Our niche lies in the fact that we give warehouses for long as well as for short durations of time to store staple items like sugar, grains and other items. Warehouse Management Service We are also engaged in offering trained and experienced professionals for efficient Management of Warehouse.
  43. 43. Page | 43 Cargo Warehousing Services We are one of the top ranked Logistic companies of India engaged in providing Cargo Warehousing Services. Dangerous Goods Inspection Services Cargo and inspection are two complimentary and interrelated tasks. No cargo can start off without being inspected, and similarly, the inspection process also happens at the destination location. The inspection officer must make sure that the dangerous goods are well organized, so that they do not reach with each other. Any damages and contamination possibilities have to be eliminated at the preliminary stage itself.
  44. 44. Page | 44 4-Custom Clearance Services We are involved in rendering different types ofCustom Clearance services to the clients. Being an authorized custom house agent, we handle documentation, custom broking and inland clearance for our clients. Our custom freight and custom clearance services include carting / receiving goods, custom documentation and examination of shipments. Furthermore, we handle all kinds of Custom Clearance paper works for our clients. With ample experience and domain knowledge,we specialize in providing pour customs with a range of custom clearance services. these solutions are delivered as per the exact needs and requirements of our customers. These quick ,prompt and hassle-free services include end to end solutions include the following duty drawback DEPB registration advance license verification (DEEC AUDIT) bond cancellation adv.EPCG discharge of bank guarantee.EPCG focus market registration focus product registration drawback.
  45. 45. Page | 45 5- Cargo Transportation Services Cargo Transportation Services We are engaged in offering a wide range of Cargo Transportation Services to our clients. The wide range of these services include discharge and loading of bulk, baggage, container and other commodities. We transport the cargo to the loading location, upload the cargo in containers and other material, and complete the related shipping documents. Dangerous Goods Transportation Dangerous Goods Transportation products may include: Combustible products. Toxic poisonous substances. Corrosives and all kinds of oxidizing agents.
  46. 46. Page | 46 4.2CONTAINER DIMENSION Our dry containers come in several sizes and designs: • 20‘ with payload up to 28.2 metric tons • 40‘ 8‘ 6‖ with payload up to 28.8 metric tons • 45‘ 9‘ 6‖ high with a total capacity of 85 cubic meters We offer various types of extra equipment: • Hanger beams which allow transport of garments on Hangers without further packing Our dry containers come in several sizes and designs: • 20‘ with payload up to 28.2 metric tons • 40‘ 8‘ 6‖ with payload up to 28.8 metric tons • 45‘ 9‘ 6‖ high with a total capacity of 85 cubic meters We offer various types of extra equipment:
  47. 47. Page | 47 • Hanger beams which allow transport of garments on Hangers without further packing • Lashing bars and lashing rings to give your cargo
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  50. 50. Page | 50 CHAPTER 5 SUPPLY CHAIN 5.1 INTRODUCTION TO SUPPLY CHAIN MANAGEMENT A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished goods, and the distribution of these finished products to customers. Supply- chain exist in both services and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm. Another definition is provided by the APICS dictionary when it defines SCM as the design, planning, execution, control and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing with demand and measuring performance globally.Supply chain management is the process of planning, implementing and controlling the operations of the supply chain with the purpose of satisfying the customer‘s requirement as efficiently as possible, supply chain spans all movement and storage of raw materials, work in progress, inventory and finished goods from the point of origin to the point of consumption. Supply chain is a system by which organizations source, make and deliver their products or services according to market demand. Supply chain management operations and decisions are ultimately triggered by demand signals at the ultimate consumer level. In other words supply chain management is a set of approaches used to efficiently integrate.So that the product is produced and distributed Suppliers Manufacturers Warehouses Distribution centers In the right quantities To the right locations And at the right time
  51. 51. Page | 51 5.2 SUPPLY CHAIN MANAGEMENT TODAY If we take the view that supply chain management is what supply chain management people do, then in 1997 supply chain management has a firm hand on all aspects of physical distribution and materials management. Seventy-five percent or more of respondents included the following activities as part of their company‘s supply chain management department functions: Inventory management Transportation services procurement Materials handling Inbound transportation Transportation operations management Warehousing management Moreover the supply chain management department is expected to increase its range of responsibilities, most often in line with the thinking that sees the order fulfillment process as one coordination set of activities. Thus the functions most often cited as planning to formally include in the supply chain management are: Customer service performance monitoring Order processing/customer service Supply chain management budget forecasting On the other hand, there are certain functions which some of us might feel logically belong to supply chain management which companies feel are the proper domain of other department. Most difficult to bring under umbrella of supply chain management are: Third party invoice payment/audit Sales forecasting Master production planning
  52. 52. Page | 52 5.3 IMPORTANCE OF SUPPLYCHAIN MANAGEMENT 1. Reduced inventories along the chain efficiently supply chain management helps to reduce the inventory level to be maintained by each member in the chain. This is possible due to good co-operation and coordination among the members in the chain. 2. Better flow of informationSupply chain leads to a better flow of information among the members of the chain rightfrom the supplier of raw materials up to the final customers. In supply chain Management the information flows from top to bottom as well as from bottom to top.Hence, the firm is able to adopt to changes and provide response whenever needed. 3. Customer satisfaction when a particular product is introduced and advertised in the market,then the product hastobe made available in all the markets of the country so as to make product accessible to the customer. Thus, the supply chain management helps in customer satisfaction by creating place utility and providing the customers with demanded products at convenient locations. 4. Competitive edgeSCM provides a competitive edge to the company in the market by facilitating the availability of goods in all the convenient locations easily accessible to the customers. 5. Builds trustSCM builds trust and cooperation among members of supply chain by sharing true information. Better trust among members leads to a win- win situations. 6. Avoids wastageDue to adaption of supply chain management techniques, the level of wastage gets reduced which adversely reduces the manufacturing cost, inventory cost, labour cost etc. 7. Quick responsesthe SCM helps the company in giving quick response to their customer due to adoption of activities like JIT and EDI etc.
  53. 53. Page | 53 5.4 OBJECTIVES OF SUPPLY CHAIN MANAGEMENT Supply chain management is consists of all parties (including manufacturer, marketer, suppliers, transporters, warehouses, retailers and even customers) directly or indirectly involved in fulfillment of a customer. The main objectives of supply chain management are to improve the overall organization performance and customer satisfaction by improving product or service delivery to consumers.Supply chain management involves movement and storage of all materials including raw materials, work in progress and finished goods. The fundamental objective of supply chain management is to add value or to maximize the overall value generated. Supply chain management becomes a tool to help accomplish corporate strategic objectives. The other objectives of supply chain management are: Replenishment of the material or product whenever required Cost quality improvement Shortening time to order Faster speed to market Enhancing customer service Expanding sales revenue Reducing inventory cost Improving on-time delivery Reducing order to delivery cycle Reducing lead time Reducing transportation cost Reducing warehouse cost Reducing /rationalize supplier base Expanding width/depth of distribution Reducing working capital Taking assets of the balance sheet Accelerating cash to cash cycles Increasing inventory turns To look for sources of revenue and cost
  54. 54. Page | 54 5.5APPLICATION OF SUPPLY CHAIN MANAGEMENT IN ORGANIZATION The most important thing is to first understand the customer‘s true needs. Companies that want to improve their competitive position by reducing their order-to delivery cycle are looking to supply-chain management to help them achieve that goal. Because SCM encompasses all processes involved in producing and delivering a product to the customer, it offers the opportunity to identify bottlenecks that can slow down activities along the entire supply chain. Young berg gives the example of an automaker that wants to build individual cars to order for delivery within one week. A supply chain analysis might discover that the seat supplier doesn‘t have the capability to produce and deliver seats in a variable colourquence — jeopardising the car manufacturers ability to offer its customers the kind of services its envisions. Inevitability, such problems will affect delivery to the final customers, much as a domino falling at the front of a line eventually causes the one at the end to topple too. To obtain the greatest possible improvement in the total product cycle, it may be helpful to think of the supply-chain dominoes falling backward. In other words, under a supply chain management philosophy, customer demand is what drives the activities required to fulfill that customers demand, all the way back to raw materials suppliers at the beginning of the production process. That is why it is important to first understand the customer‘s true needs, then work back from that, more house says: once the correct information is in hand, companies can design their supply chain processes to provide what the customer truly needs. Without that information says young berg, companies risk falling into the ‗wasted excellence‘ trap, providing a higher service level or faster cycle time than is necessary. ―It doesn‘t provide you with a competitive advantage, but it saddles you with costs that may not yield you anything,‖ he explains The process delivers an error free shipment, completed in one handling step. Provides a direct quality feedback to the operator and allows you to manage each worker based on his or her individual performance=quality input.
  55. 55. Page | 55 CHAPTER 6 TIME MANAGEMENT 6.1 MEANING Just in Time or JIT method creates the movement of material into a specific location at the required time, i.e. just before the material is needed in the manufacturing process. The technique works when each operation is closely synchronized with the subsequent ones to make that operation possible. JIT is a method of inventory control that brings material into the production process, warehouse or to the customer just in time to be used, which reduces the need to store excessive levels of material in the warehouse. JIT is a method to plan the time and optimize the complete supply chain from raw material (production) until the purchase of the good to the end customer. Many advance industries are using just in time protocols to reduce cost by managing inventories. Any firm assisting in the implementation of just in time inventory management will see increasing demand over time. The basic idea of this method, which was developed in the years around 1980 in Japanese companies, is to decentralize the material procurement and to adjust it in the short run, depending on the manufacturing and order situation. Thus, stocks can be reduced and resulting cost reduction takes place. JIT is mainly used in high volume industries such as automotive industry. JIT Case example: Production and Logistic of SMART Smart-vile located in Hambach (FR) is unique in view of logistics, because they have completely no stock. Only a small buffer at the assembly line. Nearly all suppliers are located around the assembly line within Smart-vile and deliver their parts just-in-time or even just-in- sequence. The assembly line looks like a ―+‖ and the suppliers are located in the corners between the lines. Have a look on the following graphic. Nearly all supplier equip smart with ready modules. This is called ―Modular Sourcing‖.
  56. 56. Page | 56 About Just-In-Time (JIT) concept What is the Just-In-Time concept? Since the emergence of this term it was difficult for sciences and business people to define it. Companies are using JIT concept, but actually, they are not realizing that JIT must be integrated in company philosophy and no just dead letters. Just in Time (JIT) production is a manufacturing philosophy which eliminates wasteAssociated with time, labor, and storage space. Basics of the concept are that the Company produces only what is needed, when it is needed and in the quantity that is needed. The company produces only what the customer requests, to actual orders, not to forecast. JIT can also be defined as producing the necessary units, with the required quality, in the necessary quantities, at the last safe moment. It means that Company can manage with their own resources and allocate them very easily. Following figure shows a drawing of the JIT concept. Smart is the car-manufacturer with the lowest vertical integration, worldwide (only 10%). About 70% of all needed materials are produced from suppliers within Smart-vile and delivered straight to the production line. 20 % is delivered in JIT-principle from suppliers located outside of Smart-vile.
  57. 57. Page | 57 As a positive result, no warehousing is needed at all. Every supplier has access to the individual Order-data of each car. Thus, they can deliver the modules in the exactly needed order. Even ready cars are stored only few days, as smart only produces on order. Smart has its own train station to ship their cars worldwide.
  58. 58. Page | 58 6.2 BENEFITS AND PROBLEMS Benefits that JIT concept can provide to the company are huge and very diverse. The Main benefits of JIT are listed below: 1. Reduced set up times in warehouse - the company in this case can focusesOn other processes that might need improvement; 2. Improved flows of goods in/through/out warehouse - employees will be able To process goods faster; 3. Employees who possess multi-skills are utilized more efficiently - the Company can use workers in situations when they are needed, when there Is a shortage of workers and a high demand for a particular product? 4. Better consistency of scheduling and consistency of employee work hours If there is no demand for a product at the time, workers don‘t have to be Working. This can save the company money by not having to pay workers For a job not completed or could have them focus on other jobs around the Warehouse that would not necessarily be done on a normal day; 5. Increased emphasis on supplier relationships - having a trusting supplier Relationship is important for the company because it is possible to rely on Goods being there when they are needed; 6. Supplies continue around the clock keeping workers productive and Businesses focused on turnover - employees will work hard to meet the Company goals. Also, the benefits of JIT include: better quality products, higher productivity and lower production costs. For better understanding of JIT benefits, figure 3 shows comparing between flexible systems (based on Just-In-Time systems) and buffered/rigid Systems.It is certainly that JIT concept can improve business performance and efficiency. Employee morale is likely increased and that is one most important benefit that comes from using the foregoing concept. Of course, we must not forget that now the Company is allowed to remain competitive.There are several problems which are connected within JIT concept. Maybe the Major problem with JIT operation is that it leaves the supplier and downstream Consumers open to supply shocks. With shipments coming in sometimes several Times per day, the company is especially
  59. 59. Page | 59 susceptible to an interruption in the flow. For that reason, some companies are careful to use two or more suppliers for most of their assemblies. The hidden costs are present and they include labor union Leverage, problems with flexible manufacturing systems (FMS), problems developing For the flexible workforce, difficulties with supplying commodities using JIT, increased Expenses for suppliers.
  60. 60. Page | 60 6.3 FINDINGS As I visited the organization I found that the organization has around 1000 expert professionals working for the organization who are well aware about the entire business. They know how to fulfill the logical demands of various business segments through effective strategy n efficient decision making. ARABITAL INDIA PVT is on the path of success and can become the leading freight forwarding organization through their sincere efforts.
  61. 61. Page | 61 Personal interview 1. How do you feel working in this organization?  I am very much satisfied and comfortable working in this organization and wish to render service for many more future years in this organization 2. Has the firm always been successful in delivering the products without delay in said time?  Yes the firm has always been successful in delivering the services on time due to proper scheduling and planning. 3. Do you carry out your business activities with only one particular shipping company?  No, we have tie- up with many other shipping companies also. 4. Who is the other third party involved in your business activities?  The other third party involved in our business activities is CHA and BROKER. 5. What is the mode of payment offered to the clients by the Arabital?  The mode of payment offered to our clients is through cheques,RTGS,NESP. 6. How many clients do you have in total?  Most of our clients are from the gulf countries. 7. What are the benefits provided by the government in this sector?  There are no benefits provided by the government in this sector. 8. How do you cope up with the natural calamities?  We cope up with the natural calamities by maintaining proper warehouse facilities, by proper adequate storage planning and proper packaging of goods. 9. What is the future of logistics in India?  The future of logistics is very bright in India as logistics is now becoming an important part in the economy.
  62. 62. Page | 62 10.What about the career aspect for students in this field?  Students interested in logistics and freight forwarding have a bright future in this field. One can gain immense knowledge relating to transportation n freight forwarding activities in this field.
  63. 63. Page | 63 6.4 CONCLUSION AND RECOMMENDATONS. Implementation of any project related to logistic is just like a magician‘s trick of pulling a scarf out of his hand, and as he pulls it the scarf keeps going and going. It is a good way to think of planning and running a project related to logistic. At first you see the initial scarf – the need to plan the logistics flow of a product through a supply chain –and while it may be large you think you understand the scope of it. But as you pull at it, many more scarves – many aspects of the project – become apparent, and like watching the magician, you‘re not always sure where they are coming from. Based on the recommendations and suggestions for logistics arrangements, till date more than 70% of material has been dispatched by siemens. More than 450 no‘s of vehicles have moved and LR‘s have been issued under this project and all the LR‘s have been duly receipted at site without any misplacement and damage to material. All this has beenachieved with proper planning and co-ordination amongst the entire channel partners i.e. Siemens, suppliers and logistic service provider. Main recommendations to handle logistics activities 1. Complete transparency amongst all the channel partners. Proper co-ordination and transparency is very much required amongst all the channels partners, so that effective utilization of resources can be done at all the stages of the logistic. Along with this timeliness of the information flow is very much important in such type of project. For example the information about the exact size and weight of the consignment should be available from supplier to the transporter for enabling him to finalize the most suitable vehicle 2. A sense of mutual trust and risk sharing mechanism. Since in this type of logistic project three main parties are involved and the main priorities are different of each of them. For success of the project in the most cost effective way, a sense of mutual trust and risk bearing ability should be their.
  64. 64. Page | 64 3. Selection of feasible and practical approach. One of the most important thing in such type of project is to evaluate no of feasible options and then selecting the most practical option or the approach. Before planning any activity, select no of options available considering the various resources available and the limitations. And then the most feasible approach should by implemented.
  65. 65. Page | 65 WEBLIOGRAPHY: www.arabital.com