Strategic Logistics Management
 While looking at logistics management
strategically, it is essential to examine the
class...
Step of Strategic Logistics
1) Corporate Visioning
2) Strategic Logistics Analysis
3) Logistics planning and evolution
Corporate Visioning
 It start with definition of the
corporate vision about objectives
behind the potential use of logist...
Continue….
 Key element of corporate vision
towards strategic logistics
management.
1. Recognition of service requirement...
Strategic logistics analysis
 There are three key function of the step
are as follow.
1. Development of various strategic...
Logistics planning and evalution
 Logistics Planning is blueprint of total
logistics systems in term of:
 Functional goa...
Distribution System
Distribution System
 It is a physical route through which
product move from point of
production to point of consumption.
...
Types of distribution system
 Direct distribution system
(Field force, own retail outlet, direct
mailing, personal sellin...
Distribution System for Pharma
industries.
Manufacturer
C & F
OR
Super stockiest
Stickiest
OR
Distributor
Chemist
OR
Retai...
Carry n Forward Agent (C & F)
 C & F agent is distribution agency
which manage all distribution function
of company.
 It...
Function of C & F agent
 To store company goods safely as
specified in various schedule of drugs.
 To execute order to c...
Cont….
 To dispatch the company’s
promotional material to company’s
field force.
 To submit sales tax and other
returns ...
Why C & F agent
1) To manage distribution system
2) To provide better service to all
channel member.
3) To reduce cost of ...
Stockist
 Stickist is main channel partner of
company which is appointed for a
specific area to resell company
product to...
Function of stockist
 Maintenance of adequate stocks of
the company product, at all time, to
prevent stock out.
 To prov...
Cont….
 To provide details regarding sales and
stocks held by them at the end of
every month
 To collect the returned go...
Retailer
 Retailers in the Indian pharmaceutical
industry is also known as the chemists.
 Retailer who dispenses the pre...
Function of retailer
 To hold ready stocks of various
important and essential medicines
needed to cater to the prescripti...
Expectation of channel partner
 Strategic Factor
 Extend full assurance for best ROI.
 Commitment for long run associat...
Cont…
 Logistical factor
 Availability of goods as per requirement
 No stock-out situation
 Fixed and smaller order
 ...
Cont…
 Value Added Factors
 Financial support to its channel member.
 Flexibility in credit policy
 Organisation of tr...
Changing Face of distribution system
1) Distribution system in E-commerce
 Reducing transactional cost through sales
 Op...
E-commerce for consumer
 Wider product portfolio
 Product information
 Conscious about purchase decision
 Utilisation ...
Transportation Management
Transportation Management
 It is used for better movement of goods
from one location to another location.
 Objective of ...
Cont…
 In era of rapid innovation of in the field
of information and communication
technologies, their has been a
phenome...
Mode of Transport
1) Airways
2) Seaways
3) Railways
4) Roadways
Airways
 Goods are transported by air.
 Quick delivery of product.
 Prefer for perishable goods or for
emergency servic...
Seaways
 Goods are transported through the
water medium by ship.
 This mode has acquired for cheapest,
having a larger c...
Railways
 To efficiently transport large
quantities of goods over long distance
 Tariff of railways is very low, which
e...
Roadways
 The reliability and economy of this mode is
gradually increasing due to continuous
improvement in the quality o...
Functional requirement and
transportation
Functional Req. Location Preferred mode
Production
scheduling
Vendor to plant Ra...
Selection of transportation mode
 The strengths and weakness of the firm in
term of financial and production resources.
...
Cont…
 Quantity to be transported each time.
 Distance to be covered.
 Total transportation cost of various
mode of tra...
Thank you
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Second lecturer

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Second lecturer

  1. 1. Strategic Logistics Management  While looking at logistics management strategically, it is essential to examine the classic approach to formulating a logistics strategy that begins with the firm’s overall strategy and then defining the logistics strategy that will enable the firm to reach its overall objectives.  It is a subset of the overall corporate strategy that deals with the management of the flow of materials/product in downward approach.
  2. 2. Step of Strategic Logistics 1) Corporate Visioning 2) Strategic Logistics Analysis 3) Logistics planning and evolution
  3. 3. Corporate Visioning  It start with definition of the corporate vision about objectives behind the potential use of logistics for gaining differential advantage and long term performance of the firm.  It reflect corporate mindset about logistics in term of planning process, identification of potential, alternative logistics approach.
  4. 4. Continue….  Key element of corporate vision towards strategic logistics management. 1. Recognition of service requirement for different market segment. 2. Understanding of key external environmental forces along with their impact.
  5. 5. Strategic logistics analysis  There are three key function of the step are as follow. 1. Development of various strategic alternatives 2. Evaluation and review of each developed alternatives for their capabilities for attainment of corporate vision, risk involved and additional resources required. 3. Final selection of the best alternatives and formulation of detailed logistics plan.
  6. 6. Logistics planning and evalution  Logistics Planning is blueprint of total logistics systems in term of:  Functional goals to achieve.  Programme and procedures for implementation of new logistics system.  Time for framework.  Authorities and responsibility  Continuous evaluation and measurement of performance for further improvement.
  7. 7. Distribution System
  8. 8. Distribution System  It is a physical route through which product move from point of production to point of consumption.  To make the product available at the right place and at the right time with less cost is the key objective of any distribution system.
  9. 9. Types of distribution system  Direct distribution system (Field force, own retail outlet, direct mailing, personal selling, telemarketing, website)  Indirect distribution system (Marketing intermediaries such as C & F, stockist, retailer)
  10. 10. Distribution System for Pharma industries. Manufacturer C & F OR Super stockiest Stickiest OR Distributor Chemist OR Retailers Consumer
  11. 11. Carry n Forward Agent (C & F)  C & F agent is distribution agency which manage all distribution function of company.  Its work virtually like a company distribution office.  It is appointed by the company on mutually acceptable agreement.
  12. 12. Function of C & F agent  To store company goods safely as specified in various schedule of drugs.  To execute order to company.  To follow up documentation procedure.  To provide all detail about sales to company.
  13. 13. Cont….  To dispatch the company’s promotional material to company’s field force.  To submit sales tax and other returns to respective authority.  To provide all feedback regarding all matters concerning the business.
  14. 14. Why C & F agent 1) To manage distribution system 2) To provide better service to all channel member. 3) To reduce cost of distribution and company cost because  No sales transaction taking place  To avoid trade margin  Wages are very less of staff  Warehouse rent
  15. 15. Stockist  Stickist is main channel partner of company which is appointed for a specific area to resell company product to chemist or retailer.
  16. 16. Function of stockist  Maintenance of adequate stocks of the company product, at all time, to prevent stock out.  To provide proper storage facilities in term of maintaining the specific temperature.  To resell company product among retailers, nursing homes and hospital.
  17. 17. Cont….  To provide details regarding sales and stocks held by them at the end of every month  To collect the returned goods from retailers and other parties.  To provide feedback regarding consumer reactions to company.
  18. 18. Retailer  Retailers in the Indian pharmaceutical industry is also known as the chemists.  Retailer who dispenses the prescription of a medical practitioner and sell medicines to a patient.  Retailers is very important source of information regarding the prescribing behaviors of doctors and competitor activities.
  19. 19. Function of retailer  To hold ready stocks of various important and essential medicines needed to cater to the prescription of doctors.  To provides supplementary information required by patient regarding the dosage and side effect.
  20. 20. Expectation of channel partner  Strategic Factor  Extend full assurance for best ROI.  Commitment for long run association.  Efforts for continuous improvement in quality if service.
  21. 21. Cont…  Logistical factor  Availability of goods as per requirement  No stock-out situation  Fixed and smaller order  Offering zero defect delivery  Point to point information sharing
  22. 22. Cont…  Value Added Factors  Financial support to its channel member.  Flexibility in credit policy  Organisation of training programmes from time to time for channel partners.  Assignment of certain power to channel partners for settlement of warranty claim on the spot.
  23. 23. Changing Face of distribution system 1) Distribution system in E-commerce  Reducing transactional cost through sales  Opportunity to enter in new market.  Elimination of physical limitation.  Fast interaction.  Fast promotional communication at least cost.
  24. 24. E-commerce for consumer  Wider product portfolio  Product information  Conscious about purchase decision  Utilisation of time. 2) Cash & carry system
  25. 25. Transportation Management
  26. 26. Transportation Management  It is used for better movement of goods from one location to another location.  Objective of logistics and supply chain management is to make available the right quantity of right product at the right time and place at least cost.  Share of transportation cost is 40% of total logistics cost.
  27. 27. Cont…  In era of rapid innovation of in the field of information and communication technologies, their has been a phenomenal growth in E-commerce and online selling which need more specific and value-added transportation services like tracking of shipment, in order to meet delivery commitment.
  28. 28. Mode of Transport 1) Airways 2) Seaways 3) Railways 4) Roadways
  29. 29. Airways  Goods are transported by air.  Quick delivery of product.  Prefer for perishable goods or for emergency services.  Cost is very high.
  30. 30. Seaways  Goods are transported through the water medium by ship.  This mode has acquired for cheapest, having a larger capacity and flexibility.
  31. 31. Railways  To efficiently transport large quantities of goods over long distance  Tariff of railways is very low, which encourage large shipment for longer distance, product like fertiliser, cement, food grains and petroleum product.
  32. 32. Roadways  The reliability and economy of this mode is gradually increasing due to continuous improvement in the quality of motor vehicles and the condition of road.  These facilitate in the achievement of logistics objective like lower transit time, lower total logistical cost and improved customer service.
  33. 33. Functional requirement and transportation Functional Req. Location Preferred mode Production scheduling Vendor to plant Rail / Road Replenishing stock Plant to warehouse Rail / Road Balancing stock Warehouse to warehouse Road Distribution service Warehouse to customer Road Export / import Country to country Sea / Air Emergency service Plant to customer Air
  34. 34. Selection of transportation mode  The strengths and weakness of the firm in term of financial and production resources.  Market information including the competitive scenario, geographical structure.  Product features and suitability to various modes of transportation such as Weight, size, shape.
  35. 35. Cont…  Quantity to be transported each time.  Distance to be covered.  Total transportation cost of various mode of transportation.  Carrier performance in term of speed, availability, flexibility, frequency, reliability, safety and logistics service capabilities.
  36. 36. Thank you

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