Logistics – an overview


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  • It is critical to the success of every organization. Companies like Wal-Mart, Coca Cola and Nike attribute a great deal of their success to their global logistics systems. Logistics in the service industry
  • Value chain analysis describes the activities the organization performs and links them to the organization’s competitive position. The Value Chain is a systematic approach to examining the development of competitive advantage
  • A feedback loop ensures that progress towards achieving plan goals is being monitored and that appropriate strategy adjustments are made to account for changing conditions
  • OO are short term organizational objectives necessary to achieve longer-term tactical and strategic goals. They are linked to the logistics plan of the firm
  • And Government to some extent. Organizing the unorganized sectors, streamlining the taxes. Shippers – Demand driven supply chain. Suppliers – know about cost, provide accurate & timely price, reduce costly returns, target most promising markets, monitor duty and tax changes, check competition, reduce inventories. Transport – Speed, globalization and consolidation, RFID
  • Logistics – an overview

    2. 2. Logistics - Definition <ul><li>Logistics is one of those aspects of business, whose importance is many times greater than what it would seem to be. </li></ul><ul><li>It involves the technique of managing and controlling the flow of goods, energy, information and other resources like products, services and people from the source of production to the marketplace. </li></ul><ul><li>It is the time related positioning of resources </li></ul><ul><li>It is the design and operation of the physical, managerial and informational systems needed to allow goods to overcome time and spaces </li></ul>
    3. 3. Logistics
    4. 4. Business Logistics
    5. 5. Importance of Logistics <ul><li>Create Customer Value & Loyalty </li></ul><ul><li>Build strong relationships with product suppliers </li></ul><ul><li>Logistics managers are involved in </li></ul><ul><ul><li>Boundary & organization spanning teams </li></ul></ul><ul><ul><li>Strategic Planning </li></ul></ul><ul><ul><li>Alliance Building </li></ul></ul>
    6. 6. Importance of Logistics <ul><li>Logistics has a Huge Impact on the Domestic & Global Economy </li></ul><ul><li>Logistics is of Critical Importance to Human Survival </li></ul><ul><li>Logistics Greatly Impacts our Quality of Life </li></ul><ul><li>Logistics Affects our Success in a Wide Variety of Endeavors </li></ul>
    7. 7. Logistical Competitive Advantage <ul><li>Logistics activities are represented as part of the value chain </li></ul><ul><li>The Chain consists of a series of activities that create and build value </li></ul><ul><li>They culminate in the total value delivered by an Organization </li></ul>
    8. 8. The Value Chain
    9. 9. Receiving stores V1 V2 Operation Finished Goods Stores W1 W2 W3 R1 R2 R3 R4 R5 V3 V5 V4 R6 Market I NFO I NFO I NFO I NFO I NFO I NV I NV I NV I NV I NV Outbound Logistics Inbound Logistics PROCUREMENT OPERATION DISTRIBUTION V W R3 Vendor Warehouse Retailer
    10. 10. Strategic Logistics Planning Process Communication with stake holders and Executives Getting Started Preliminary Planning Strategizing Authoring Monitoring and Marketing Strategic Plan Document Yes Feedback Yes No
    11. 11. Components of the strategic logistics plan <ul><li>A management overview describing the logistics strategy and its relationship to the other major business functions. </li></ul><ul><li>A statement of logistics objectives related to cost and service for both products and customers. </li></ul><ul><li>A description of the individual customer service, inventory, warehousing, transportation, supplier partnership and supplier development strategies to support the overall plan. </li></ul><ul><li>An outline of the major logistics programmes or operational plans. </li></ul><ul><li>Forecasts of necessary labour resources and capital requirements. </li></ul><ul><li>Financial Performance Criteria </li></ul>
    12. 12. Life Cycle Support <ul><li>Logistics functions is also expected to provide life cycle support to the product after sale, that includes: </li></ul><ul><ul><li>After sales service </li></ul></ul><ul><ul><li>Reverse logistics or Product Recall </li></ul></ul>
    13. 13. Operational Objectives <ul><li>Rapid Response </li></ul><ul><li>Minimum Variance </li></ul><ul><li>Minimum Inventory </li></ul><ul><li>Movement Consolidation </li></ul><ul><li>Quality </li></ul>
    14. 14. Components of Logistics Management <ul><li>Customers </li></ul><ul><li>Shippers </li></ul><ul><li>Suppliers </li></ul><ul><li>Transport Providers </li></ul><ul><li>Transport Infrastructure Operators & Providers </li></ul>
    15. 15. Functions of Logistics Management <ul><li>Inventory </li></ul><ul><li>Sales </li></ul><ul><li>Transportation </li></ul><ul><li>Import / Export </li></ul><ul><li>Purchasing </li></ul><ul><li>Functional Management </li></ul><ul><li>Utility/Value/Warehousing </li></ul><ul><li>Information Systems </li></ul>
    16. 16. LOGISTICS FUNCTIONS WARE HOUSING - Storage, Handling, Packing & Distribution INFORMATION SYSTEMS - Internal & External Information flow INVENTORY - When to order? How much to order? Just In Time TRANSPORTATION - Water, Road, Rail, Pipeline & Air NETWORK DESIGN - Suppliers, operations, warehouses
    17. 17. Logistics Integration <ul><li>In order to perform various functions of logistics bringing all functions of logistics under one operational command is important. </li></ul><ul><li>Performance in isolation loses sight of overall picture. </li></ul><ul><li>It is like trying to solve a jigsaw puzzle without complete picture before you. </li></ul><ul><li>What do we integrate? Information flow, inventory flow, procurement, operations support, physical distribution . </li></ul>
    18. 18. Logistics Integration Inventory flow Physical distribution Manufacturing support Procurement Information flow Customer Suppliers If we view the above graphic we see all internal logistical operations in an organization. We also see their close relationship with each other and the need to perform them in an orchestrated fashion.