Logistics and Transportation - export and import

1. LOGISTICS AND SUPPLY CHAIN
BY AMIT KARRA
WHAT IS SUPPLY CHAIN MANAGEMENT?
To meet the customer demand of a product or service there
is a chain of processes involved right from the producer end
like say, Sourcing / Procurement, Distribution, Warehouse,
inventories, transportation etc and managing those
processes efficiently and effectively can be called ‘Supply
Chain Management’.

2. FEW FACTS ..
Logistics is one of the world’s largest industries.
There are nearly 50 lakh truck drivers moving freight
across the India, which means that one out of every 15
people working in the India is employed by the trucking
industry.
The logistics industry is actually made up of six
different sectors: road transport, rail, AIR, maritime,
warehousing and storage.

3. The Global Ranking of the World Bank's 2016 Logistics
Performance Index shows that India jumped to 35th rank in
2016 from 54th rank in 2014 in terms of overall logistics
performance.
The Indian logistics industry which provides employment to
more than 22 million people in last five years.
The Indian logistics market is expected to reach about USD
215 billion in 2020 economic survey said…

4. Primary objective for the Organisation or
business are….
 The increasing importance of customer service
 Maximizing profitability
 Increasing customer satisfaction
 Maximizing asset utilization
 Reducing costs
 increase number of customers

5.  Improve new product innovation
 Increase market share
 Improve service performance
 Demand forecasts
 Fast Order processing

6. INTRODUCTION
Have you ever wondered as to why so many
trucks running on highways, at all time during
the day and night?
The answer lies in the fact that they are engaged
in transporting goods from one part of the
country to another or state.

7. These goods may be either consumer goods
that we buy at a retail outlet OR industrial
goods that are meant as inputs to
manufacturing another product.
Therefore, the trucks are all engaged in very
important activity that influences our daily
personal lives and the functioning of business
organisation.

8. Without facilities how do we live our life…?
Drinking water supply through pipeline
Gas through gas line / gas cylinder
Tea leaf's / coffee
Milk / Vegetables / Fruits
Petrol / Diesel etc…….

9. A day when your morning newspaper is not
delivered to your doorstep, or when you are thirsty
and your favourite cola in not available in any of
the shops nearby.
Similarly, imagine a company that assembles
passenger cars is suddenly faced with shortage of
supply of engines because the country from which
these engines are imported has been struck by a
massive earthquake.

10. In all these examples, the interruption in the
regular flow of material and product etc.. can
result in a significant disruption to day to day
activities not only for us but also for
organisations and the nation as whole.
The common element all aforementioned
situation is a function known as logistics…

11. DO SUPPLY CHAIN AND LOGISTICS REQUIRED
TO ALL MENTIONED INDUSTRIES?
Energy / Chemical / Mining Company
Manufacturing – General
Manufacturing - Consumer products
Manufacturing - High technology
Manufacturing – Automotive
Manufacturing - Industrial

12. Warehousing - 3PL
Manufacturing - Pharmaceuticals
Transportation - 3PL
Other Transportation provider
All kind of Food Industry
Wholesaler/ Distributor and Other
etc…

13. The prime reasons for rising transactional cost in
India’s foreign trade are poor logistical
infrastructure, poor logistics management practices,
and lower use of technology in logistical operations.
The high cost of doing business adversely affects
India’s opportunities in global markets, profit of
business, economic growth, and development

14. Foreign investors have repeatedly complained
about the availability of inefficient physical and
virtual infrastructure of India as the major reason
for not setting up their manufacturing operations
here.

15. The supply chain includes not only the
manufacturer and suppliers, but also
transporters, warehouses, retailers and even
customer themselves.
Within each organisation, the supply chain
includes all functions involved in receiving and
filling a customer request.

16. These functions include, but are not limited to, new product
development, marketing operation, distribution, finance
and customer service.
Definition:
Art and science of obtaining, producing and distributing
Material and product in proper place and in proper quantities.
More Simply, the objective of a logistics system is that the
right product, reach the right place in the right quantity and at
the right time to satisfy customer demand.

17. Most Popular concept of logistics management is
the concept of (7) R’s
In a competitive environment, a firm’s success
depends on the ability to meet the requirement of
its customers.
Logistics plays an important role in ensuring the
achievement of these objectives of a firm.

18. Right Product :
Customers want a product that fulfils their needs, wants, desires and demands.
For eg.
 Germans are known for their high technology luxury cars
 American are known for high speed utility vehicles,
 Japanese are known for cost efficient budget cars,
With tags such as “Made in Germany” / “Made in America” / “Made in Japan”
Customer will decide his product requirement which one falls as the right
product in his criteria. Now supplier / manufacturer will manufacture the goods
accordingly.
Right Place :
International firm has to place the product where it is needed by the customer
or where customer will use the product.
Increase in e-commerce due to information technology in trade, logistics
operations helped in effective distribution strategy to delivery the right product.
Eg. Amazon / Flipkart is able to sell more then 8000 cells xyz company in a one
minute and deliver the same where customer has requested.

19. Right Quantity :
The overall objective of ensuring the right quantity is to be dispatched to
customers by using various inventory management techniques.
Right Condition:
Logistics not only transporting goods from place of production to place of
consumption, but also ensures the safe and secure delivery of goods to his
customers.
To ensure proper packing and packaging, palletization and stowage of cargo so
as to protect it from physical and climate related hazards during its international
journey to the place of consumption.
Right Time:
On time delivery in logistics promotes sales in international markets. Logistic
team has to ensure to deliver the cargo exactly on the expected schedule and
time.

20. Eg.
Christians all over the globe start shopping at least a month ahead of Christmas.
Muslims shop extensively at the time of ID and
Hindus consider it auspicious to shop during Diwali.
If these are delivered late, it has not utility for the buyers!
If these are delivered early, means additional cost of handling storage and
warehousing the product or may bear demurrage and detention to shipping lines.
Right customer:
Organisation has to ensure before dispatching who is the actual consignee who
take the delivery and dispatch the material accordingly.
Eg. The buyer may be sitting in Dubai and ordering the product for his US market
or may be the place where he want the material. Without ensuring supplier
dispatch the product to Dubai will attract additional cost, delay in delivery, wasting
of time and energy, may result loos of customer next order.

21. Right Price / Cost :
Organisation has to ensure urgency of material to customer whether its
required in short period or not? For e.g. Water transport is a cheaper mode of
transport but it increase the lead time of service.
Air transport is an expensive mode of transportation but has lower the lead
time .
Under such circumstances, organisation has to take proper decision on modal of
choices and quote the price to customer accordingly.

22. Logistics Management means………
Distinction between logistics and supply chain can be
understood from the definition of logistics proposed by the
Council for supply chain management professionals., as that
part of supply chain management that
PLANNING ------ IMPLIMENTING ------- CONTROLLING
The efficient and effective, forward flow and reverse flow and
storage of goods and services and related information between
the point of origin and the point of consumption order to meet
customer requirement.

23. Point of Origin
Forward
logistics flow
Supplier -------- Manufacturer ------warehouse------Distributer ----- Customer
Reverse
Logistics flow
Point of consumption

24. PLANNING : This First Step > Kept in mind geographical location > distance b/w
point of origin to point of consumption.
Also > Nature of product > physical attributes such as weight > volume >
perishability - All above play an important role in the logistics planning
process.
IMPLEMENTTING: Second step > Theory aside, in a real life situation it is found
that even the best plans go out of control due to unforeseen circumstances. >
Contingency plans should also be in place in case needed.
Implementation of a logistics plan is a group process, where different agencies
and people located in different geographical locations have to coordinate their
activities with each other > precise instructions, quick communication and
mutual understanding are the key ingredients of the successful implementation
of a logistics plan.
CONTROLLING: Third step > Controlling the flow of goods >> Timely arrival of
cargo is very important > early arrival may perish the goods, incur
demmurage or storage >> Late arrival dissatisfaction of customer and loss of
next order > this can be control by keeping in transit record from point of origin
to point of destination.

25. LOGISTICS MANAGEMENT - BOUNDARIES AND
RELATIONSHIPS
Logistics is perhaps the most complex business function, bring with
Challenges and surprises.
1) ORDER PROCESSING:
Once the order is received, a firm performs many activities aimed at
ensuring prompt delivery to its customers.
Customers expect the order to be delivered within a specific time
frame from the date of placement of an order.
The firm begins the process of manufacturing the product based on
customer orders and then delivers the product once it is ready..
Improper order processing can result in customer dis-satisfaction.

26. 2) INVENTORY MANAGEMENT:
In most cases, the processes of production and distribution involve
considerable time and effort, so a firm has to ensure that finished products are
available for supply to customers within a reasonable time.
In some cases, unavailability of a product would tempt the customer to settle
for competitor’s product.
To avoid such contingencies, firms are required to maintain inventories of
finished goods at several locations within their distribution network
Inventory decision is very crucial because there are costs associated with
them.
In recent decades, the concept of just in time (JIT) delivery has assisted
firms to keep the levels of inventory low. However, a firm must maintain
certain levels of inventory with its supply chain to maintain its operations
such as production and distribution , to achieve high levels of customers
service.

27. 3) WAREHOUSING:
Warehouses are facilities that are meant for storage of material at
different locations.
They can bridge the time and distance gap between the production
and demand functions and the production facilities of a firm.
Warehouse allows firms to store the products in a location, which
can compress the time to transport goods to the markets.
Inventory and warehousing are closely linked with each other as
the inventory that a firm carries is dependent on the number of
warehouse that it has.

28. 4) TRANSPORTATION:
We have highlighted the importance of the transportation function
in logistics.
Goods produced must reach the intended customers.
In addition, the raw material must reach the firm so that it can start
production.
Both the cases require directly transporting the goods –
either from suppliers premises to the manufacturing units of a firm
or
From the production centres to either warehouse or the distribution
channel or customers.

29. Transportation related decision are no longer simple, because firms
are faced with several choices in terms of transportation modes
where time and cost both involved.
For Example:
Transportation by ship may be the lowest cost option available for a
firm to export goods but sometime the exigencies of time may
compel a firm to choose a more costly option like Air
transportation.
Similarly, for domestics transportation, even if the cost and time
may be in favour of rail transport, but other related issues such as
handling and delivery to the final destination may compel a firm to
opt of road transport..

30. FACTORS IMPACTING LOGISTICS
Logistics involves co-ordination and interaction with
multiple member such as SUPPLIER,
MANUFACTURERS and DISTRIBUTERS.
On the other hand, logistics operation impacted by
internal operational characteristics like nature of the
product,
the operations can be impacted by external factors also
such as government policies and the state of the
infrastructure in the country.

31. 1) Nature of product
What is the Product?
What is the Type of packaging required?
Material handling system?
Mode and Cost of Transportation?
Nature of Warehousing required?
E.g. High Value and Low
Volume MATERIAL can
be shipped - By Air
E.g. BUT Low Value
High Volume Can be
shipped - By Sea

32. If By Sea
Absence of Air service
Carry refrigerated
containers
Over longer distance
To carry cargo to the
nearest port
If delay in arrival may
perish the goods.
By Air
Flower and vegetable
Reach desired overseas
destination
In fresh condition
And on time
Meet their overseas
Commitment
More efficiently.

33. In addition, depending on whether goods are in the solid or
liquid state, or are inflammable in nature.

36. International Standards For Phytosanitary
Measures No. 15 (ISPM 15)

38. HAZARDOUS MATERIAL PACKING AND SHIPPING SYMBOLS

39. 2) Availability of infrastructure
a) It’s a back bone of any country
b) Quality of Good roads, railways, ports, airports,
conditions affect on transport of goods
c) Help speed of movement of cargo
d) Capability to handle all type of containerized and break
bulk cargo
e) Good port faculties with suitable material handling system
help the cargo move without wastage and damage of
cargo.
f) “Save time” Turn around time”

40. g) Addresses the growing demand for use of larger
vessels by shipping liners, can accommodate super
capesize vessels.
h) Fast discharge / loading of cargo to ensure minimum
turnaround time of vessels.
i) Abundant storage facilities
j) Ports, road and rail ensuring speed and efficiency for
delivery
k) Online portal for logging service requests, vessel
status updates, billing etc..

41. Poor infrastructure may be less competitive in the market place
as compared to its competitors exporters and importers.
3) Mode of Transport available
The choice of the mode of transportation and the nature of
products are linked
Movement of goods may required multiple mode of transport
in case of international trade.
E.g. If an company deal with perishable products, which need
to quickly transported to the customer location, it will have to
seek air cargo services.
If such service not available, the company may suffer a
setback.

42. 4) Knowledge of
Govt. Policies
Exim Policy & procedure
Focus Market Scheme
Focus Product Scheme
EPCG / Advance licence / MEIS /
Drawback etc
Sales Tax
Excise Tax - GST / Eway bill
Octroi Tax
Etc…
Motor Transport Act
Motor transport (MT) refers to the
operation and maintenance of a
vehicle fleet (especially trucks /
trailers etc)
Knowledge of taxes reduce cost

43. Select most efficient combination of transport that create
value for customers…….

45. .
Transportation Element in Logistics
Transportation play a role of movement of goods.
Transportation is crucial element in logistics, in both
domestic and international movements, because of the large
distances over which physical products have to shifted.
1) OCEAN TRANSPORT:
Majority of goods are transported by sea across
international borders.
Its accounts for 95 per cent of the total trade by volume
AND
70 per cent by Value.

46. 1) Technological advancement has contributed to the increase in the
average size of ships used world wide for marine transport.
2) Larger ships allow for achieving economies of scale and lowering
the cost per unit of transport.
COASTAL SHIPPING
India has a long coastline of 5,560 Kms., having access to the sea with
11 major and 168 minor/intermediate ports. ...
India lies in geographical proximity to important shipping routes which
gives a natural advantage to the country's shipping.
“Gujarat Ambuja Cement “has been able to bring down its logistics
cost by opting to transport cement by sea from GUJARAT TO
KERALA.

48. 2) AIR TRANSPORT:
An expensive mode of transportation, offer the benefits of
tremendous saving in time and higher level of security and
safety of cargo.
It is most suitable mode for transporting high value cargo and
goods with a limited shelf life.
Transportation cargo by air was first achieved via passenger
aeroplanes. But increased need of transportation of goods by
air, aircrafts introduced, known as freighter meant only for
transporting cargo.
Over the years, airlines industries has a significant growth not
only in passenger traffic but also in freight traffic.

49. 3) Road Transport:
Road transport is the most popular mode used in India
because of its ability to create door to door service within
a reasonable time frame, even to remote locations that
are unreachable by other mode.
Like in Europe, roads are primary mode of international
transportation. Truck travelling from one country have to
pass several international borders, before delivering the
cargo at the destination.
As per the National Highways Authority of India, about
65% of cargo and 80% passenger traffic is carried
by the roads.

50. 4) Rail Transport:
This is particularly suited for bulk commodities. However in
India this mode has not been popular because of last mile
delivery issues, infrequent movement of trains and lack of
flexibility, etc.
Rail transport is not cost efficient over short distances. This
mode of transportation can be very economical for long
distances.
In recent years, the port connectivity provided by the railways
has also benefited to exporters and ICD (inland container
depot) operators in transporting cargo by rail.

51. On a daily basis, more than 20 million passengers and 2.8
million tonnes of cargo are carried by the Indian railways.
The railways are expected to play a significantly larger role in
cargo movement.
5. Inland Waterways / Coastal :
Inland water transport is concerned with the transportation of
goods using natural waterways such as rivers and canals.
In India, the length of navigable canals, rivers etc is about 14500
km.
However this is not a very popular mode of transportation.

52. 6. Pipeline Transportation :
This mode of transportation is suitable for liquid, gaseous, and
semi solid materials and is used mainly for transporting
petroleum and natural gas.
This is most economical modes of transportation of bulk liquid or
gas products, but due to their vast expanse, they are exposed to
various kinds of risks of damage.

53. Factors affecting choice of transport mode
Transportation cost: This includes rates, minimum weight,
loading and unloading charges.
Transit Time: Transit time is the total time that required
from the time the consigner makes the goods available for
dispatch until the carrier delivers to the consignee.
Reliability: Reliability refers to the consistency of the
transit time that a carrier provides.
Capability: Capability refers to the carrier’s ability to
provide the equipment and facilities that is required for the
movement of particular commodity.

54. Accessibility: Accessibility refers to carrier’s physical
access or geographical limits.
Security: Security refers to the arrival of goods in the
same condition.

55. What is the customers expectation….?

56. Every body struggling with transportation challenges
 Shorter lead time
 On time delivery
 Low cost
 Consolidate shipments to reduce their cost
 Required estimate time when you will deliver the
product!
 Required status / update for every movement via email /
SMS!
 Try to Save their time and Money!

57. But what happened most of the time …..?
 Fuel Cost rising –
Higher cost reduce profit
 Ocean Freight cost increases –
Freight cost per unit high
Operation cost increase
 Increase in traffic, road jam –
Fuel consumption increases.
 Managing driver performance
 Vehicle maintenance
 Safety issue –Vehicle theft, break down or
unfortunate accident.
 Vehicle insurance and Fitness certificate
 Toll cost

59. Vehicle Check list…
• Is GPS system is available in vehicle or not ?
• Is cleaner available along with container truck ?
• Is safety shoes & helmet available with driver and
cleaner ?
• Is vehicle Road worthy ? (Check for Tyre, tanker
body, lights etc.)
• Is driver under influence of alcohol ? No

60. • Is PUC available ?
• Is First aid box available ?
• Is fire extinguisher available ?
• Is Oil leakage observed in vehicle ?
• Is vehicle Tyre damaged or worn out ?
• Is tarpaulin / cover roof available in case of local
loading vehicle ?
• Is rope available in case of open lorry / truck ?

61. • Is driver explained about do's & don'ts while in
premises ?
• Drivers must have minimum 3-4 Years of
Experience of vehicle?
• Pick up containers well in advance to allow for
slower speeds.
• Maintain speed limit up to 50 - 55 to prevent
dangerous situation.

62. • Be familiar with the maintenance procedures for your
vehicle and ensure it is kept in good running order.
• Keep a safe distance behind the vehicle in front.
• Adjust speed as necessary to allow for the type of road,
traffic density, visibility and weather conditions.
• Ensure proper maintenance of vehicles – Check PRE
AND POST CHECK LIST before leaving premises.

63. 3 PL LOGISTICS:
Provide one or more services in logistics…..OR in
combination of any below mentioned services..
a) Transportation
b) Forwarding
c) Warehousing
d) Clearance etc…..

64. 4 PL LOGISTICS:
They are specialized in entire projects..

66. Difference b/w supply chain and
logistics
Supply chain
– Transforming a
raw material into
product and
getting into
customers.
logistics
–Movement of
material in
whole supply
chain.

67. Customer service and cost are two elements in logistics.
Customer
Service
Cost
On time Delivery
Without mistake
And without
any breakages
Not only
maintain
Inventory
level low
But also
improve
The over all
Gain to the
Company.
On time
delivery
Without
any cost
Over runs
Logistics Value proposition
Need to Balance between
customer service and Cost

68. Logistics share the goal of supply chain management to meet customer
requirement.
(8) Flexible
service delivery
and Information
of material flow
Time and
Distance

69. E.g. Effective & Control Logistics
Late
Arrival of
Cargo
Early
Arrival of
Cargo
Or Product
may
perish
Customer
dis-satisfy
Loss of
opportunity
for 2nd order
Incur Demurrage &
Detention / storage
on port
Warehouse
cost
increases

70. SUPPLY CHAIN MACRO PROCESSES IN A FIRM
1. CUSTOMER RELATIONSHIP MANAGEMENT (CRM) : All processes at the
interface between the firm and its customers.
2. Internal Supply Chain Management (ISCM) : All processes that are internal to
the firm.
3. Supplier Relationship Management (SRM) : All processes at the interface
between the firm and its suppliers.
1. Source 1. Strategic planning 1. Market research
2. Negotiate 2. Demand Planning 2. Price
3. Buy 3. Supply planning 3. Sell
4. Design Collaboration 4. Fulfilment 4. Call Centre
5. Supply Collaboration 5. Field Services 5. Other Management

71. (1) Integrating supply chain…..
Flow of Goods and information internally and forecasting
Purchasing
Inbound
Logistics &
Outbound
Logistics
Production
Marketin
g / Sales Distribution
Accounting
Maintain
cash
inflow /
outflow
Customer
ServicePlant
maintenance
Store
What are the Logistics Strategies……?

72. What to do next?
 Internal Planning process accurately and properly.
 Flow of information properly co-ordinated between each
department of organisation.
 Using forecast Method for demand and Supply.
 On time delivery by maintaining proper inventory.
 Inventory cost control
 Reduce in inventory may impact on customer time delivery
so maintain proper inventory in w/hs’.
 Raw material available on time to manufacturing on time.

73. (2) IMPROVE CO-ORDINATION FUNCTIONS WITH
VENDORS, TRANSPORTERS AND SUPPLIERS
Relationships should be strong and deep. Make sure to
maintain strong and regular communication with each of
your suppliers, vendors and transporters.
Keep them regularly informed and up to date, on your
strategy and plans so that they know where they fit in and
how they can help, plan for and benefit from those plans.
Make them your partner.

74. They are your partners, and this partnership should be based
not only on financial transactions, but also on mutual trust
and loyalty. Make your suppliers / vendors / transporter feel
like they are a part of your business. Inform them about your
processes, such as releases of new products and promotions,
and listen to their concerns.
 So first Improve your communication
 Talk with Suppliers regularly and discussion plan with
them.
 Meet with Suppliers and Vendors regularly

75.  Discuss strategies and future planning
 Build relationship on personal level too
 Go out for lunch and dinner and discuss some family
background on a personal level.
 Documentation with 100% accuracy.
 Collaborate with suppliers and use continuous improvement
tools and share observation about latest trends.
 Arrange proper transportation – Give them planning well in
advance!

76. (3) Pooling method:
When manufactures and retailers expenses high
variability in demand for their products, they can pool
together common inventory components.
Reduce stock
out risks
Storage
cost
Manufacturer Retailers
Centralise
warehouse
(All products pool
together)
e.g. Camera
Mobile
Laptop
And accessories
printer
e.g. Camera
Mobile
Laptop
And
accessories
printer

77. Firms /
Suppliers
Fright Forwarder
3&4th party
logistics
Warehouses Retailers
Wholesalers
(4) Reduce no of partners..
More partners, there are in chain more difficult and
expensive the chain is to manage.
Reduce
cycle Time
Reduce
Operating
cost
Reduce Inventory
holding cost

78. (5) Track Inventory
It could be done
by using
BAR code or
GPS code
system
Reduce
Inventory cost
by tracking
system

79. (6) Postponement area
Avoid filling warehouse with wrong mix of
goods, setting postponement centres.
[It should happen later date or time]

80. (7) Mix shipments to match customer needs
(8) Don’t in Line at custom
Use different BAR codes or unique
identification code or code that refer to
the particular stock by mixing shipment.
Reduce the time spent in custom
clearance by doing proper
documentation.

81. (9) Inventory in Transit
Keep inventory in transit
It reduce storage cost of Inventory
(10) Select proper transportation modes
and carrier that connect easily to …..
And Forward and Reverse
logistics can be done easily.

82. A part from above …….
 Properly select Location of warehouses and no of
locations.
 Strengthen operations
 Ensure that all stakeholders are working toward
Common goals,
 Reliable forecasts.

83.  Locate in the right country where forward and reverse
logistics can be done easily.
 Develop an effective export and import strategy and
volume, inventory that reduce ocean freight cost.
 Maintain location of warehouses and no of warehouses
that help customer, fast delivery.
 Set priorities
 Effective demand planning can guide users to improve
the accuracy of revenue forecasts, align inventory
levels.

84.  Determining how to best fulfil the requirements
created from the demand plan. The objective is to
balance supply and demand in a manner that
achieves the financial and service objectives of the
organisation.

85. IS SUPPLY CHAIN MANAGEMENT A GOOD OPTION AS A CAREER?
Supply Chain Management is the next big thing in the Indian industrial
scenario. According to Management Experts there is a lot of scope for
supply chain management (SCM) in India due to increasing uncertainty
of supply networks, globalization of businesses, rapid increase of
product variety and shortening of product life cycles. Personalized
content and services for customers add to the cause.
WHERE CAN I BE PLACED AFTER STUDYING SUPPLY CHAIN
MANAGEMENT?
Any business, be it retail, or manufacturing, FMCG, healthcare,
transportation and logistics or even e-commerce, all thrives on the
expertise of Supply Chain and Logistics. So you can join any industry of
your liking. You can even make your career in Supply Chain
Management in any Indian and MNC company.