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  1. 1. Logistics Management Studied by, Gunjan Budhiraja Indu Pal Jitendra Chauhan Jiwant Kumar Kamal Kant Soni Kamaljit Singha Kanak Vashishth
  2. 2. The Definition , “ Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of conforming the customer requirement”. ------ Council of Logistics Management
  3. 3. The Origin ’ Logistics’ is derived from French word ‘loger’, which means art of war pertaining to movement and supply of armies. Fighting a war requires the setting of an object, and to achieve this objective meticulous planning is needed so that the troops are properly deployed and the supply line consisting, interalia, weaponary, food, medical assistance, etc. is maintained. The plan should be each that there is a minimum loss of men and material while, at the same time, it is capable of being altered if the need arises. As in the case of fighting a war in the battle-field, the MANAGERS also need a suitable logistics plan that is capable of satisfying the company objective of meeting profitably the demand of the targeted customers.
  4. 7. The LOGISTICS SYSTEM ELEMENTS   The following are the system elements of logistics: 1. Order processing 2. Warehousing 3. Inventory control 4. Transportation 5. Information monitoring 6. Facilities Note : These are considered primary to the effective management of logistics because they either contribute most to the total cost of logistics or they are essential to effective completion of the logistics task.
  5. 8. The Significance The buyer is not only interested in the promises of the seller that he can supply goods at competitive price but also on ON-TIME delivery. Delivery according to the contract is essential to fulfilling the commercial and legal requirements. In the event of failure to comply with the stipulated supply of period, the seller may not only get his sale amount back, but may also be legally penalized, if the sales contract so specifies. It also helps in getting repeat orders through creation of goodwill. And above all the main reason all industries are looking for it is the control over the cost , reducing it thus increasing the profit. Such is the gain of importance that like finance, marketing and HR, nowadays supply chain & logistics have become a course in management specialisations.
  6. 9. <ul><li>Thus the General objectives of the logistics can be summarized as: </li></ul><ul><li>1. Cost reduction </li></ul><ul><li>2. Capital reduction </li></ul><ul><li>3. Service improvement </li></ul><ul><li>  </li></ul><ul><li>The specific objective of an ideal logistics system is to ensure the flow of supply to the buyer, the: </li></ul><ul><li>right product </li></ul><ul><li>right quantities and assortments · </li></ul><ul><li>right places </li></ul><ul><li>right customer </li></ul><ul><li>right time </li></ul><ul><li>right cost / price and </li></ul><ul><li>right condition </li></ul>
  7. 10. Material Management / Procurement <ul><li>Introduction </li></ul><ul><ul><li>Definition: </li></ul></ul><ul><ul><li>The management of the inbound movement and storage of raw materials, supplies, and components from source to point of production. </li></ul></ul><ul><ul><li>Tasks to Perform </li></ul></ul><ul><ul><ul><li>Trouble Avoidance </li></ul></ul></ul><ul><ul><ul><li>Opportunities </li></ul></ul></ul><ul><ul><li>Organizations Involved: </li></ul></ul><ul><ul><ul><li>Purchasing </li></ul></ul></ul><ul><ul><ul><li>Warehousing </li></ul></ul></ul><ul><ul><ul><li>Transportation </li></ul></ul></ul><ul><ul><ul><li>Salvage and Scrap Disposal </li></ul></ul></ul><ul><ul><ul><li>Quality Control </li></ul></ul></ul>
  8. 11. Material Management / Procurement <ul><li>Purchasing </li></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Prerogatives </li></ul></ul><ul><ul><li>Centralization vs. Decentralization </li></ul></ul><ul><ul><li>Steps in Purchasing </li></ul></ul><ul><ul><ul><li>Recognition of Need </li></ul></ul></ul><ul><ul><ul><ul><li>Price Forecast </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Demand Forecast </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Supply Forecast </li></ul></ul></ul></ul><ul><ul><ul><li>Description of Need </li></ul></ul></ul><ul><ul><ul><ul><li>Specifications </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Quantity </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Timing </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Estimate Costs </li></ul></ul></ul></ul><ul><ul><ul><li>Analysis of possible sources of supply </li></ul></ul></ul><ul><ul><ul><li>Determination of price and terms </li></ul></ul></ul><ul><li>Total Cost of Ownership (Make of Buy) </li></ul><ul><ul><ul><li>Preparation and placement of purchase order </li></ul></ul></ul><ul><ul><ul><li>Follow-up / expediting </li></ul></ul></ul><ul><ul><ul><li>Receipt and inspection of goods </li></ul></ul></ul><ul><ul><ul><li>Payment of supplier </li></ul></ul></ul><ul><ul><ul><li>Maintenance of records </li></ul></ul></ul>
  9. 12. particulars Logistics management Supply chain management Scope Inbound logistics, in process inventory, outbound logistics All players in the supply chain from raw material source to finished product consumer, vendors, their vendors, supplier organization [shipper], Warehouses, service providers, customers, their customers How this is created in business? By internal integration of logistics functions handled by various management functions within organization By external integration of roles of various players in the supply chain. Main objective Logistics cost reduction by integrating resources across the pipeline Supply chain profitability by value creation.
  10. 13. focus L/M tries to take the product to the consumer at minimum logistical cost. Hence it is supply driven. SCM focuses on value creation in the supply chain. Hence this is customer focused or demand driven. definition Logistics is the process of strategically managing procurement and storage of material , part and finished inventory [and related information flow] through organization and its marketing channels in such a way that current and future profits are maximized through cost effective fulfillment of order Management of upstream and down stream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. Origin A very old concept in military planning. As a logical extension of logistics management