This slide contains a brief explanation about the process of logistics audit in Supply Chain Management

1. LOGISTIC AUDIT AND
CONTROL
By
• Akshay O.J

2. LOGISTICS
• Logistics refer to the overall process of managing
how resources are acquired, stored, and transported
to their final destination. Logistics management
involves identifying prospective distributors and
suppliers and determining their effectiveness and
accessibility.
• In simple terms, the goal of logistics management is
to have the right amount of a resource or input at
the right time, getting it to the appropriate location
in proper condition and delivering it to the correct

3. LOGISTICS AUDIT
• Logistics audit is a managerial assessment of the condition of the company's
logistics or its designated aspect, such as distribution, warehouse or production.
Logistics audit makes it possible to conduct an in-depth diagnosis of the situation
and identify key problems in the examined area.
• The primary objective of Logistics Audit is to match the logistic requirements and
customer service expectations, taking the market dynamics into consideration, and
to identify areas for improvement to achieve customer service excellence.

4. BASIC FUNCTIONS OF LOGISTICS
AUDIT
• Identification of key data required to manage costs, service, cycle times, response
and quality
• It allows for a better understanding of the current environment
• It determines how well the system is meeting current business needs in a cost
effective, flexible and responsive manner, and how it is adapting to a changing
market place

5. LOGISTIC AUDIT PROCESS
The steps involved in logistics audit process includes;
1. Defining the Logistics Network Design Process
2. Performing a Logistics Audit
3. Examining the Logistics Network Alternatives
4. Conducting a Facility Location Analysis
5. Making decisions regarding the Network and Facility location
6. Developing an Implementation Plan

6. 1)DEFINING THE LOGISTICS
NETWORK DESIGN PROCESS
This step involves forming a team that will be responsible for all the elements of the
logistics network design process. This team has to establish parameters and objectives
of the logistic network design or redesign process itself. Doing this requires gathering
certain essential types of information that would be useful throughout the future steps
of decision making.

7. 2)PERFORMING A LOGISTICS
AUDIT
This helps the reengineering team with a comprehensive perspective of the firm’s
logistic process. It answers the following things
• The resources available such as storage, buildings, material-handling equipment
and budgeted capital expenditures.
• The constraints the activity faces, such as storage capacities, use of automation
systems, regulatory compliance requirements, surge requirements and capital
expenditure budget.
• The processes the activity uses, and the current standards governing those
processes.

8. 3)EXAMINING THE LOGISTICS
NETWORK ALTERNATIVES
This stage identifies and provides the basis for shortlisting the available alternatives
for logistics networks. These options are examined by applying suitable quantitative
models such as
I. Optimization model: Searches for the best solution
II. Simulation model: Replicates the functioning of the logistics network
III. Heuristic model: Accommodate broad problem definitions but do not provide
optimum solutions.
These models when used properly, provides an insight into the functioning and
cost/service effectiveness of the various possible network options.

9. 4)CONDUCTING A FACILITY
LOCATION ANALYSIS
The network and specific sites for the logistic facilities recommended need to be
evaluated for consistency with the network design objectives identified earlier. Moving
from the current logistics network to the desired one should ultimately create
revenues which cover or exceeds costs. The general configuration should be extended
to analyse the attributes of the specific areas and cities that are candidates for sites of
logistics facilities. Regional location selection teams collect information on specific
attributes and inspect potential sites in terms of topography, geology and facility
design thus eliminating many sites and focusing on a single site.

10. 5)MAKING DECISIONS
REGARDING THE NETWORK
AND FACILITY LOCATION
The network and specific sites for logistic facilities recommended in step 3 and 4
should be evaluated for consistency. The decision regarding the network and facility
location should be done while considering factors such as labour climate,
transportation issues, proximity to markets and customers, quality of life, taxes and
industrial development incentives etc.

11. 6)DEVELOPING AN
IMPLEMENTATION PLAN
Once the overall direction has been established the development of an effective
implementation plan is critical. This plan should serve as a useful road map for
moving for moving from the current logistics network to the desired one. The firm
should commit the resources necessary to ensure smooth and timely implementation.

12. CONCLUSION
• Thus we can say that logistic audit allows understanding logistic capability and
potential for improvement.
• Helps in identifying the strengths and weaknesses of the current logistic
organization.
• Helps the organization develop a continuous improvement towards the logistic
excellence

13. THANK YOU