According to Council of logistics management:
“Logistics is the process of planning, implementing and
controlling the efficient, effective flow and storage of goods,
services and related information from point of origin to point of
consumption for the purpose of conforming the customer
From the point of view of management, marketing logistics or
physical distribution has been described as „planning,
implementing and controlling the process of physical flows of
materials and final products from the point of origin to the
point of use in order to meet customer's needs at a profit.
Major logistics functions:
(i) Demand forecasting
(ii) Distribution communication
(iii) Inventory Control
(iv) Material Handling
(v) Order Processing
(vi) Part & Service Support
(vii) Plant and Warehouse side selection
SCOPE OF THE MARKETING
(x) Salvage & scrap disposal
(xi) Traffic & transportation
(xii)Warehousing & Storage
(xiii)Time & Place Utility
(xiv) Efficient Movement to Customer
(xv)Return goods handling
Order can be made by mails, post or via sales person.
It includes preparation of order invoices and order
Inventory- Any idle resource that could be put to some future use.
Inventory- A stock or store of goods
inventory includes raw material, work-in-process, finished goods and
stores and spares.
Institute of Chartered Accountants of India defines inventory in AS2
“Inventories as an assets held
- For sale in the ordinary course of business
- In the process of production for such sale
- In the form of materials and supplies to be consumed in the
production process or in rendering services.
Inventory Management and
Inventory Management involves the
“Development and administration of polices ,
systems and procedures which will minimize total
costs relative to inventory decisions and related
functions such as customer service requirements
,production scheduling , purchasing and traffic” .
Inventory control Techniques
1. Always better control (ABC) classification.
2. Vital, essential and desirable (VED)
3. Fast moving, slow moving and non-moving
4. Economic order quantity (EOQ).
Inventory costs includes ordering cost plus carrying costs.
1. Ordering Costs
2. Carrying Costs
Storage Space Costs
Inventory Service Costs
Inventory Risk Costs
3. Out-of-stock Costs or Shortage Cost
Key Inventory Terms
Lead time: time interval between ordering and
receiving the order
Holding (carrying) costs: cost to carry an item in
inventory for a length of time, usually a year
Ordering costs: costs of ordering and receiving
Shortage costs: costs when demand exceeds
“Warehousing and storage is an act of storing and assorting
the finished goods so as to create maximum time utility at
Now a days, many private firms are turning to distribution
centers rather than constructing the Warehouses.
Functions of a warehouse
Receiving the goods
While designing a warehouse, a manager
ought to keep in mind these elements
Land and Building
Management and staff
Operating methods and Procedures
Types of warehouses
Bulk storage warehouse
1. It improves operating efficiency and inventory control is
felt easier and effective
2. There is no need to carry large stock and there are no
dangers of stock outs resulting in low level inventories
3. Transport facilities are optimally used as routing and
scheduling becomes handy.
1. The firm serves the customers better positioning the inventory
in their proximity. This is the result of maximum time utility
created by it.
2. The firm is likely to effect savings in freight charges because of
3. It facilitates product movement by block rates
Transportation: Meaning and
“The process of moving an item from point
A to point B.”
“Safe, efficient, reliable, and sustainable
movement of persons and goods over time and
Transportation in Logistics:
The operation of transportation determines
the efficiency of moving products
The progress in techniques and management
principles improves the moving load, delivery
speed, service quality, operation costs, the
usage of facilities and energy saving.
Therefore, transportation is the base of
efficiency and economy in business logistics and
expands other functions of logistics system
Importance of Transportation:
Without well-developed transportation systems,
logistics could not bring its advantages into full play.
A good transport system in logistics activities could
provide better logistics efficiency, reduce operation
cost, and promote service quality.
A well-operated logistics system could increase both the
competitiveness of the government and enterprises.
Transport system is the most important economic
activity among the components of business logistics
Advantages of Rail transport:
It is a convenient mode of transport for travelling long
It is relatively faster than road transport.
It is suitable for carrying heavy goods in large quantities over
Its operation is less affected by adverse weathers conditions
like rain, floods, fog, etc.
Limitations of Railway transport:
It is relatively expensive for carrying goods and passengers over
It is not available in remote parts of the country.
It provides service according to fixed time schedule and is not
flexible for loading or unloading of goods at any place.
It involves heavy losses of life as well as goods in case of
It is a relatively cheaper mode of transport as compared to
Perishable goods can be transported at a faster speed by
road carriers over a short distance.
It is a flexible mode of transport as loading and unloading is
possible at any destination. It provides door-to-door service.
It helps people to travel and carry goods from one place to
another, in places which are not connected by other means
of transport like hilly areas.
Limitations of Road transport
Due to limited carrying capacity road transport is not
economical for long distance transportation of goods.
Transportation of heavy goods or goods in bulk by road
involves high cost.
It is a relatively economical mode of transport for bulky and heavy
It is a safe mode of transport with respect to occurrence of
The cost of maintaining and constructing routes is very low most of
them are naturally made.
It promotes international trade.
The depth and navigability of rivers and canals vary and thus, affect
operations of different transport vessels.
It is a slow moving mode of transport and therefore not suitable for
transport of perishable goods.
It is adversely affected by weather conditions.
Sea transport requires large investment on ships and their
It is the fastest mode of transport.
It is very useful in transporting goods and passengers to
the area, which are not accessible by any other means.
It is the most convenient mode of transport during natural
It provides vital support to the national security and
It is relatively more expensive mode of transport.
It is not suitable for transporting heavy and bulky
It is affected by adverse weather conditions.
It is not suitable for short distance travel.
In case of accidents, it results in heavy losses of goods,
property and life.
Transportation and logistics systems have interdependent
relationships that logistics management needs transportation
to perform its activities and meanwhile, a successful logistics
system could help to improve traffic environment and
Since transportation contributes the highest cost among the
related elements in logistics systems, the improvement of
transport efficiency could change the overall performance of a
Transportation plays an important role in logistics system and
its activities appear in various sections of logistics processes.
Without the linking of transportation, a powerful logistics
strategy cannot bring its capacity into full play
Wrightbus is the UK’s leading independent supplier of
accessible buses for public transportation systems. Earning a
reputation for producing vehicles which are stylish, durable,
high in quality and packed with innovative features Wrightbus
has significantly expanded since its foundation in 1946. The
company originated in Ballymena, Northern Ireland, and was
the location for the company’s factory and aftermarket
distribution centre (DC). With the ever-increasing number of
Wrightbus vehicle’s operating on mainland United Kingdom
roads the company’s aftermarket subsidiary, Custom care,
sought an innovative logistics solution to increase availability of
servicing and maintenance parts to minimise vehicle downtime
and whole life costs.
Customcare’s supply chain required re-designing to providethe
level of service their customers desired. The two main issues
requiring resolution were
the difficulty providing consistent levels of service from the
Northern Ireland DC to
the increasing number of mainland UK customers, and
.the associated operating costs from holding high levels of
Historically Customcare used a motor manufacturer’s UK
dealership network infrastructure to store and distribute parts
however the solution did not provide the level of flexibility,
visibility or service
Due to the geographical footprint of Wrightbus the solution
involved relocating the main distribution centre from Ballymena
to mainland Great Britain. The Automotiveshared-user
warehouse at Halewood, Liverpool, was identified as having
available storage capacity (15 000 sq ft) whilst providing a
strong fit with the distribution footprint.
From analysing distribution data it became clear that a
dedicated transport operation would not suit Customcare. The
fragmented nature of demand and geographical locations of
delivery points meant an alternative solution guaranteeing
‘Next Day’ service was required.