Logistics management is a critical imperative for organizations. It involves planning and coordinating the efficient movement of materials and resources. An effective logistics system can lower costs and improve customer service by ensuring the right products are delivered to the right places at the right time. Several forces such as globalization, supply chain management, and outsourcing of non-core functions have increased the importance of logistics.

1. L o g i s t i c M n a g e me n t
a
An S u ppl y Ch a i n I mpe r a t i v e
By
Rajeev Sharma
Asstt. Prof.
Center of Business Management
Bimtech
rajeev.sharma@bimtech.ac.in

2. LOGISTICS
Defined
Pln in im e e t ga dcntol t phys a fo o mtr la f he go
a n g plmnin n o rling he icl lwf aeia nd inis d ods
fo po to oig t po o uet me cso e`sneda aprf
rm in f r in o int f s o et utmr e t oit
B y “ ipKolr
Phil te”
I tisesnial aplnningprcs a a infr aio at it
se t ly a oes nd n omt n civ y
So A inert eprcs t to im e t fo o mtr la s ppl st o g t
tgaiv oes ha pt izs he lwf aeia nd u ie hru h he
ogn aio a it o rt nst t cso e
ra izt n nd s peaio o he utmr

3. The wor d l ogist ic has or iginat ed f r om Gr eek wor d
‘ Logist ikos’ and t he Lat in wor d ‘ Logist icus’ which
m eans science of com ing & cal cul at ing
put
I n ancient t im it was used m e in connect ion
es or
wit h m oving ar m ies, t he suppl ies of f ood &
ar m ent s t o t he war f r ont .
am
Dur ing Wor l d War I I l ogist ics gained im t ance
por
in ar m oper at ions cover ing t he m
y ovem ent of
suppl ies , m & equipm
en ent acr oss t he bor der
Today
I t has acquir ed t he wider m eaning and is used in t he
business f or t he m ovem ent of m er ial f r om
at
suppl ier s t o t he manuf act ur er and f inal l y t he
f inished goods t o t he consum s er

4. Scope of Logistic
I t is of cr it ical im t ance t o t he or ganizat ion how it del iver s
por
pr oduct s & ser vices t o t he cust om , whet her t he pr oduct is
er
t angibl e or int angibl e.
Ef f ect ive & ef f icient Physical m ovem ent of t he t angibl e
pr oduct wil l speak of int angibl e ser vices associat ed wit h t he
pr oduct and t he or ganizat ion which is del iver ing it .
I n Case of int angibl e pr oduct , t he del iver y of t angibl es at t he
r ight pl ace & r ight t im wil l speak about it s qual it y.
e
On t he m o l evel inf r ast r uct ur e such as Var ious m
acr odes of
t r anspor t , t r anspor t at ion equip. , st or age f acil it ies,
connect ivit y & inf or m ion pr ocessing ar e cont r ibut ing t o a
at
l ar g3 e ext ent in t he physical m ovem ent of goods pr oduced in
manuf act ur ing , m ining & agr icul t ur e Sect or s.

5. Scope of logistics
This speed & r el iabil it y in dist r ibut ion of pr oduct s &
ser vices cont r ibut e t o a gr eat ext ent in t he gr owt h
of a count r y` s dom ic & int er nat ional t r ade .
est
Logist ic cost as a per cent age of GDP acr oss t he
wor l d is shown in t he f ol l owing t abl e
Count r y Logist ic cost as a per cent age of GDP
Kor ea 16
China 15
J apan 14
I ndia 13
Fr ance 12
UK 11
USA 10

6. Scope of logistics
I ndia spent near l y $ 5 0 bil l ion t o move m er ial
at
f r om one use t o anot her .
So t he “ Publ ic dist r ibut ion syst em in t he count r y needs
l ogist ical suppor t f or del iver ing goods at r ight pl ace on
t im and t he l owest cost .
e
At Micr o Level l ogist ic pl ays a cr it ical r ol e in t he val ue
del iver y syst em of business or ganizat ion t o pr ovide
super ior cust om ser vice i. e. t o achieve a desir ed l evel
er
of del iver ed ser vices and qual it y at t he l owest possibl e
cost .
I n a nut shel l any pr oduct ivit y im ovem
pr ent t hat coul d
be achieved in any par t of l ogist ic syst em at t he m o
, icr
or m o l evel woul d hel p in cost r educt ion and pr oper
acr
depl oym ent of scar e nat ional r esour ces t o t he

7. Fact
In a m anuf act ur ing or g. t he business pr ocess st ar t s wit h
t he f l ow of m er ial f r om t he suppl ier s, pr ogr ess t o t he
at
pl ant , t hen t o t he cust om t hr ough t he dist r ibut ion
er
channel t he depar t m ent m excel in t heir r espect ive
ay
f unct ion but or g. as a whol e t heir per f or m ance m be ay
dism .
al
Reason
 Lack of Co or dinat ion in t heir act ivit ies
They have dif f er ent goal t o cher ish
Ther e is no singl e agency t hat coor dinat es t heir f unct ions
and hom ogenizes t hem .
How t o over com ?e
Use of Logist ic as a syst em

8. Logistic –A system approach
Logist ic r ecognizes t hat al l t he act ivit ies of m er ial
at
movem ent acr oss t he business pr ocess ar e
int er dependent and needs cl ose coor dinat ion and t hese
ar e t o be m aint ained as a syst em and not t he f unct ional
Sil os.
Syst em is shown as l ogist ic Mix incl uding f ol l owing
f unct ional Ar eas
Or der Pr ocessing
I nf or m ion Fl ow
at
War ehousing
I nvent or y cont r ol
Packaging

9. Order Processing
I nvol ve f ol l owing act ivit ies
Or der checking f or any deviat ion in agr eed on negot iat ed
t er m
Technical det ail s;pr ice;del iver y per iod;paym ent t er m axes
s;t
et c
Checking t he avail abil it y of m er ial in st ock ( m er ial
at at
r equisit ion)
Pr oduct ion & m er ial schedul ing f or shor t age
at
Acknowl edging t he or der , indicat ing deviat ion if any
I t is r out ine oper at ion but r equir e gr eat deal of pl anning
t r aining of peopl e invol ved and invest m ent t o br ing about
ef f iciency & accur acy
I n a l ar ge or ganizat ion a syst em capabl e of handl ing t housands
of vol um inous or der s wit h m inim hum invol vem
um an ent or
wit hout hum invol vem
an ent is a m invol ving shor t ened or der
ust

10. Information Flow
I t is basical l y inf or m ion based act ivit y of invent or y
at
m ovem ent acr oss t he suppl y chain. Hence r ol e of
inf or m ion syst em pl ays a vit al r ol e in del iver ing super ior
at
cust om ser vice
er
This f unct ion is r equir ed t o f acil it at e t he f ol l owing
inf or m ion needs
at
Or der Regist r at ion
Or der checking & edit ing
Or der pr ocessing
Coor dinat ion m eans t o int egr at e t he t ot al suppl y chain of
t he com pany wit h inf or m ional needs as t o t im , quant it y,
at e
val ue e. g Lead t im r at e of consum ion , del iver y schedul e
e, pt
& pr ice of t he m er ial , Tr anspor t at ion t im & cost et c.
at e

11. Warehousing
A st or age pl ace wher ein f inished goods ar e st or ed t il l t hey
ar e sol d. Ef f ect iveness of an or ganizat ion` s m ket ing
ar
st r at egy depends on m aking t he r ight decision r egar ding
war ehouse.
Nowadays
War ehouse ar e t r eat ed as swit ching f acil it ies r at her
t han st or age pl ace. I t is a m or cost cent er , m
aj any
cust om pr obl em ar e t he dir ect r esul t of im oper
er pr
war ehousing m anagem .
ent
Maj or decision of war e house ar e as f ol l ows: -
Locat ion , Size & Number of war ehousing f acil it ies
War ehouse l ayout
Design of buil ding

12. Inventory management
Point or der pr obl em
That is
How m uch t o or der When t o
or der
For t his we r equir e
Dependabl e I MS I ndependent I MS
Pur chase Cont r ol St or es cont r ol I ssue
management
ABC Anal ysis
VED Anal ysis Level Management

13. Packaging
I t is al so a cr it ical el em ent in physical
dist r ibut ion of t he pr oduct , which
inf l uences t he ef f iciency of t he l ogist ic
syst em t his is done wit h t he view of
f ol l owing : -
 Foe handl ing and dam age pr event ion
For com unicat ions
m
For int er m odal t r anspor t at ion
St or age space econom y
Thus t o r educe packaging cost

14. Transportation
Foe t he m ovem ent of goods f r om suppl ier t o buyer ,
t r anspor t at ion is t he m f undam al and im t ant
ost ent por
com ponent of l ogist ic.
E. g. f or l ow unit val ue pr oduct s t he t r anspor t at ion
cost com ponent is 2 0 % of t he pr oduct cost .
I n l ogist ic cost it s shar e var ies up t o 6 5 - 70 % in case
of m consum ver y l ow unit pr ice pr oduct s.
ass ed
Mode of t r anspor t at ion ( Cost & t im f act or )
e
Own f l eet or Out sour cing
Rout e Pl anning
Vehicl e schedul ing
Ar e t he f ew decision which ar e invol ved in

15. Three Forces
Which have change t he per spect ive of l ogist ics
Gl obal izat ion
Focus on Suppl y chain Management
Out sour cing of Non Cor e
Com ency Funct ional Ar ea
pet

16. Globalization
The ent ir e wor l d has becom a gl obal vil l age
e
f or m ket er s because of t he l iber al izat ion
ar
of econom of m count r ies and t he
ics ost
em gence of WTO which is f or cing business
er
or ganizat ions t o suppl y pr oduct s beyond t he
nat ional boundar ies wher ever t her e is a
m ket oppor t unit y.
ar
I n such condit ions t he r ol e of
LOGI STI CS
Wil l be t o pr ovide t im and pl ace t im and
e e
pl ace ut il it y of t he pr oduct t o t he cust omer

17. Focus on Supply Chain Management
Business t he wor l d over ar e st r iving f or
com it iveness. I n t heir st r uggl e f or sur vival t heir
pet
f ocus has shif t ed t o t he suppl y chain
I . e.
I nt egr at ing t he pr ocess of Pr ocur em ent , pr ocessing
& dist r ibut ing t o del iver val ue f or m oney t o t he
cust om er
Two key r ol es l ogist ics pl anning & suppor t
ar e
Val ue del iver y pr ocess success of suppl y
chain m anagem ent

18. Outsourcing of Non Core Competency functional
Area
Out sour cing is a accept abl e t r end in business.
Cor por at ion have r eal ized t hat doing ever yt hing by
t hem ves does not r esul t in ef f ect ive & ef f icient use
sel
of scar e r esour ces avail abl e t o t hem .
I t is bet t er t o out sour ce f unct ional ar ea t o exper t s
who can do j ob at t he l owest cost and t hat t o
ef f icient l y & Ef f ect ivel y.
LOGI STI CS
I s one such ar ea wher e m of business or g. do not
ost
have enough exper t ise t hus needs t o be out sour ced
Thus Logist ics have shaped int o dif f er ent ser vice
indust r y of f er ing com et e & cust om
pl ized l ogist ics

19. Value Chain
I t is under st ood now t hat an or ganizat ion` s
com it ive Success coul d onl y com t hr ough
pet e
eit her cost l eader ship or of f er ing dif f er ent iat ed
pr oduct and ser vices
LOGI STI C MANAGEMENT
Can pr ovide bot h t he benef it s sim t aneousl y
ul
Thr ough it s val ue chain act ivit ies
Which can be cat egor ized int o dif f er ent t ypes
I nbound l ogist ics
oper at ions
Out bound l ogist ics
Suppor t act ivat es e. g HR, Account s & f inace, I T &

20. Infrastructure
O A&F
p
e
r
operations
a
t S&M
Services Customer Value
i Out bond
In bound
o Logistics
logistics
n
s
Technology M&M HR

21. Supply Chain
Stores Operations
Stores
Procurement
Warehouse
Vendor Customer
Inbound Logis tics Out Bound
Logis tics

22. Supply Chain
Mater ial f l ow Material f l ow
OPERATIONS
Stor es P D
Stores
RM r is
o FG
tr
c
u
i
r b
Pur chas e e Inf ormation f l ow
u Warehous ing
m ti
e o
n
Vendor t n Cus tomer
Inbound Logis tics Out bound l ogis tics

23. Logistics for Business Excellence
For Business Excel l ence l ogist ics oper at ion need t o
be int egr at ed on t he f ol l owing t wo f r ont s
 int egr at ion of l ogist ic int o business
I nt egr at ion of com ponent s of l ogist ics
To achieve t he obj ect ive of m aking avail abl e r ight
pr oduct at t he r ight pl ace and at a r ight t im at l ow
e
cost , ever y business is r equir ed t o int egr at e
l ogist ics int o t he business pr ocess.
For l ogist ic oper at ion t o r un sm hl y, pr oper
oot
int egr at ion am ongst t he com ponent of l ogist ic
pr ocess is a m . ust

24. Logistic
HR A/Cs Finance Utilities Marketing PPC QC Mat. Mng. IT Others
Organizational Functions
In process Log.
Suppliers Procurement Processing Distribution Customer
In Bound Log. Out Bound Logistic
Logistic System Component
Transportation Material Handling & Storage Logistical Packaging
Warehousing
Information
Inventory Mang.
LOGISTIC FUNCTION
Order Processing

25. Objectives of Logistic management

 I nvent or y Reduct ion
Rel iabl e and consist ent del iver y
per f or mance
Fr eight econom y
Minim um pr oduct dam age
 quick Response

26. NOTE:
Am ongst m of t he I ndian com
ost panies
l ogist ics out sour cing
Has now becom an accept ed t r end f or t he
e
f ol l owing r easons:
Cost Saving
Focus on cor e Business
Paucit y of f unds
Reduct ion in l iabil it ies
Wider Geogr aphical cover age
Cr oss pol l inat ion of bet t er avail abl e pr act ice

27. W arehousing
N owadays warehousing is used as a
switching facility rather than as a long term
storage house.
A ttention is paid to
1 2 3
H igher lower shorter
inventory turnover operating cost
cycle time
A nd in light of these warehouse`s
performance is judged by its productivity
1
and cost performance while 2 trying to
achieve 2 polemic goals.

28. We have t o decide on 2 f act or s
Whet her t o have
Cent r al ized
decent r al ized war ehouse
war ehouse
I t ensur es t ight cont r ol m t ipl e
ul
dist r ibut ion
On invent or ies and can cent er s
Oper at e on EOS
l ocat ion of sit es

29. Obj ect ive
Main
bet t er cust om ser vice
er l ow oper at ing
cost
Ancil l ar y obj ect ive
M x i mu m u t i l i z a t i o n o f s t o r a g e s pa c e
a
Hi g h e r l a b o u r pr o d u c t i v i t y
M x i mu m As s e t u t i l i z a t i o n
a
Re d u c t i o n i n ma t e r i a l h a n d l i n g
I nc r e as e i n i nv e nt or y t ur nov e r
Re d u c e o r d e r f i l i n g t i me

30. War ehousing Funct ion
3 Funct ions
Mat er ial St or age Funct ion
Mat er ial Handl ing Funct ion
I nf or m ion Handl ing Funct ion
at

31. Mat er ial St or age f unct ion
Due t o non synchr onizat ion of Manuf act ur ing cycl e
wit h t hat of t he consum ion cycl e of t he m er ial ,
pt at
st or age of t he m er ial r em
at ains a big hur dl e
So m er ial st or age is r equir ed t o accom odat e t he
at m
f ol l owing f unct ions:
Hol ding
Consol idat ion
Post ponem ent
Br eak Bul k
packing
Cr oss Docking
Mixing

32. Mat er ial Handl ing f unct ion
This invol ves t hr ee f unct ion
6. Loading & unl oading
8. Mat er ial Movement
10. Or der f il ing

33. I nf or m ion handl ing f unct ion
at
For t his f ol l owing inf or m ion is r equir ed
at
Goods inwar d
I nspect ion & audit ing
Goods out war d
Excess St ock
I nvoicing
War ehouse expenses
Tr ansit dam age & Br eakage
Consignm ent t r acking
This al l inf or m ion f acil it at e quick decision
at