This document provides an overview of logistics and supply chain management concepts. It defines logistics and its role in supply chain management. Logistics involves planning and controlling the flow of goods from suppliers to customers. The document then discusses key logistics activities like transportation, warehousing and inventory management. It provides definitions and examples of different types of warehouses and transportation modes. Overall, the document serves as an introduction to important logistics concepts in supply chain management.

1. SCM101
Introduction to Logistics and Supply Chain
Management
Week 10

2. Logical
Thinking
Statistics Logistics
“the detailed coordination of a complex operation involving
many people, facilities or supplies”

3. ROLE OF LOGISTICS IN SUPPLY CHAIN MANAGEMENT
Logistics is the part of the supply chain management that plans,
implements and controls the efficient, effective flow and storage of
goods, services and related information from the point of origin to
the point of consumption in order to meet customer requirements
The mission of logistics is to get the right goods or services to the
right place, at the right time, and in the desired condition and
quantity in relation to customers order

4. Objective
• The purpose of logistics management is to plan and co-
ordinate all those activities necessary to achieve desired
levels of delivered service and quality at lowest possible
cost.
Scope
• From the total systems viewpoint, the scope encompasses
management of raw materials and other inputs through the
delivery of the final product in order to satisfy a customer.

5. FROM SUPPLIERS TO CUSTOMERS

6. Management Actions
Planning Implementation Control
Raw
materials
In-process
inventory
Finished
goods
Natural
resources
Human
Resources
Financial
Resources
Information
Resources
Time and
Place Utility
Efficient
Movement
to Customer
Proprietary
Asset
Competitive
Advantage
Logistics Management
Suppliers Customers
Inputs into
Logistics
Outputs of
Logistics
Customer service
Demand forecasting
Inventory management
Logistics communications
Material handling
Order processing
Parts and service support
Plant and warehouse selection
Procurement
Packaging
Reverse logistics
Traffic and transportation
Warehousing and storage
Logistics Activities

7. THE EASIEST UNDERSTANDABLE DEFINITION IS BELOW AND KNOWN
AS 7R:
Logistic is responsible for flow of materials along the supply chain

8. WAREHOUSING
https://www.youtube.com/watch?v=ZN6--Xi5lKo
What is a warehouse?
What specific functions does it perform in the supply chain operation?

9. DEFINITION
Warehousing refers to the activities involving
storage of goods on a large-scale in a systematic
and orderly manner and making them available
conveniently when needed.
Means holding or preserving goods in huge
quantities from the time of their purchase or
production till their actual use or sale.
Creates time utility by bridging the time gap
between production and consumption of goods

10. BASIC REASONS FOR NEED OF WAREHOUSE
RAW MATERIALS
WORK-IN-PROGRESS
COSUMABLE STORESAND
SPARES
READY-MADE
COMPONENTS
FINISHED GOODS

11. FUNCTIONS
 STORAGE OF
GOODS
 PROTECTION OF GOODS
 RISK BEARING
 IDENTIFICATION OF
GOODS
 FINANCING
 PROCESSING

12. TYPES OF WAREHOUSES
 Public
 Private
 Contract
 Consolidation
 Break bulk
 Cross docking

13. WAREHOUSE ALTERNATIVES
1. Private Warehouses
 Owned or leased by the product owner
 Control is fully with the product owner
 Changes can be made to integrate the warehouse with rest
of the logistical system
 Provides market presence to the product owner
 There is no profit to be added to the cost
-continue

14. 2. PUBLIC WAREHOUSES
 Available to companies on hire
 Overheads get distributed over a large customer base
 As warehousing is their core business public warehouses
offer expertise in management
 Flexibility of location
 Significant scale economies, several users and resultant
volume, benefits in transportation costs
-continue

15. 3. CONTRACT WAREHOUSES
 Contract warehouse operators take over
logistics responsibility from manufacturing
company
 Long term relationship and customized service
 Expertise of management
 Shared resources with several clients

16. Consolidation
warehouse
Plant B
[Product B
for
Customer X]
Plant C
[Product C
for
Customer X]
Customer X
[Product A+
Product B+
Product C]
Plant A
[Product A
for
Customer X]
CONSOLIDATION

17. Plant A
[ProductA
for
Customers
X+Y+Z]
Break bulk
Warehouse
Customer
X
Customer
Y
Customer
Z
BREAK BULK WAREHOUSE

18. CROSS DOCK WAREHOUSE
Plant A
[ProductA]
For
W,X, Z
Plant B
[Product B]
For
W,X,Y,Z
Cross Dock
Warehouse
Customer W
[A+B+C]
Customer X
[A+B]
Customer Y
[B+C]
Customer Z
A+ C
Plant C
[Product C]
For
W,Y,Z

19. HOW COMPANIES CHOOSE WAREHOUSES?
Services desired
Level of control
Length of time storage is required
Cost
Labor force availability
Their transportation is top notch

20. WAREHOUSE NETWORKS
 How many warehouses does the company need?
 Where should these warehouses be located?
 Amazon fulfillment centers:

21. LEAN AND GREEN WAREHOUSING
 Greater emphasis on cross docking
 LEAN concept, eliminates the need to store inventory, reduces waste
 Form of consolidation to reduction transportation
 Reduced lot sizes and shipping quantities
 LEAN concept of small batch scheduling
 Lowers costs by reducing inventories, company is more flexible to meet customer demand
 Increased automation
 A tendency to be green
 Green or sustainability programs, reduce carbon footprint, smaller more efficient
warehouses

22. https://www.youtube.com/watch?v=eCgHcLoOE8Y

23. WHAT IS A TRANSPORTATION ?
 An important sub-sector of Logistic and warehouse
 Transportation is the function of planning, scheduling, and controlling activities related to
vendor, and movement of inventories into and out of an organization
 In business, transportation is simply moving products and materials from one place to another
using Motor carriers , Ships, Rails, ​Aircraft etc
 This includes shipment of raw materials to the manufacturer and movement of finished product
to the customer.
 Transportation also includes the movement of parts to assembly areas as they are assembled
 Transport attempts to fulfill three of seven Rs- to get the Right Product at the Right Place at the
Right Time

24. TRANSPORTATION OBJECTIVES
 To maximize the value to the company through price negotiations.
 Getting the best price of transport goods
 To make sure service is provided effectively.
 Making sure that the product is not damaged
 To satisfy customer needs.
 Get the Right Product at the Right Place at the Right Time
 Lowest possible cost

25. MAJOR MODES OF TRANSPORTATION
 Motor carriers (trucking)
Short haul
Long haul
 Rail carriers
 Air carriers
 Water carriers
 Pipeline carriers

26. MODE OF TRANSPORTATION CLASSIFIED ACCORDING
TO CARRIERS
 Common Carrier :- A person or company that transports freight for a fee that can be
hired by anyone to transport goods.
 Contract Carrier:- A person or company that transports freight under contract to one or a
limited number of shippers
 Exempt Carriers :- A person or company specializing in certain services (such as taxi
service ) or certain commodities (such as farm products or bulk cargo ) exempt from
regulation by the Interstate Commerce Act
 Private Carriers:- A person or company that transport its own cargo usually as part of a
business that product uses, sells and/or buys the cargo that is being hauled

27. MOTOR CARRIERS(TRUCKS)
 The most usable mode of the transportation and the one people are probably most
familiar. Door to door delivery
 It is also the most flexible mode of transportation in that it carries the most difficult
kinds of freight to the most locations.
 Two major categories of motor carriers based on operating distances :
 Short haul :- based on operating distance under 200 miles from the driver home terminal
 Long haul :- operating distance over 200 miles from the driver home terminal

28. MOTOR CARRIERS ANOTHER CATEGORIZED CRITERIA
 Two types :-
 General carriers :- Trucking companies that engage in shipping packaged, boxed and
palletized goods that can be transported in standard, enclosed tractor- trailer, generally
40 to 48 feet in length.
 Specialized carriers :- Transport articles that because of size, weight , shape, or other
inherent characteristics require specialized equipment for transportation such as car
carriers ,dump trucks .

29. MOTOR CARRIER CATEGORIES BASED ON SHIPMENT
VOLUME
 Generally indicating whether the volume of shipment fills the truck/trailer/container or not
.
 Divide into (LTL) and (FTL)
 LTL (less- than-truckload) :- are those that move small shipments – that is, when
you do not have enough to fill a truck, multiple handoffs along a way, multiple
depots, more costly
 FTL (full-truckload) are generally contract an entire trailer out to a single customer,
faster delivery

30. RAIL CARRIERS
 A Business Company who transporting goods by rail roads.
 Rail transportation is best used for very heavy shipments such as building material,
construction equipment's, and coal, particular when transport distance is long.
 Advantage :-Fixed route and schedule ,economically quicker, less expensive , carrying heavy
load, long distance operational, extremely more carrying capacity , safest form of
transportation,
 Disadvantage :- need large amount of investment, maintained cost is high, construction cost
,cannot provide door-to-door service

31. AIR CARRIERS
 Air carriers are organizations that transport cargo by aircraft
 Air is the new transport mode and the least utilized
 Air shipments is relatively expensive compared to the other modes of transportation ,due
to
 Fuel is expensive
 Limited amount of cargo space
 Have concern with weight and balance issues on the plane itself
 Advantage –Fastest mode

32. WATER CARRIERS
 Water carriers are Organizations transport goods using waterways
 Water carriers cover a broad range of water transportation routes including
 Ocean /deep water,
 Coastal and intercostal ,
 In-land waterways such as rivers and lakes .
 Advantage – inexpensive mode of transportation ,used for carry bulky and low value
materials ( coal, grain, chemicals, petroleum )

33. PIPELINE CARRIERS
 Any type of moving goods and material from one place to other place using pipeline form of
transportation is pipeline Carriers
 Advantage
 Costs are extremely low
 Dependability is vey high
 Limited risk of damage to the product being transported
 Most efficient form of transportation
 Disadvantage
 Limited geographic flexibility or accessibility
 Limited select products :- oil products, natural gas, crude oil

34. SELECTING TRANSPORTATION MODES
 Cost
 Speed (transit time from pickup to delivery)
 Reliability (consistency of delivery)
 Capability (amount of different types of product)
 Capacity (volume/weight can be carried at one time)
 Flexibility (ability to deliver the product to customer)

35. RANKING OF TRANSPORT MODES
 Truck ranks the best overall but only rank number 1 in accessibility category
 Pipeline is lowest cost and the most reliable
 Air is fastest
 Rail has the most capability
 Water does not come in first in any category but is widely used for international shipments
 Figure 9.5 shows that compare various modes of transport against key transportation service elements on
scale of 1 (best) to 5 (worst)
Figure Accessibility Capability (can handle the
most kinds of freight, i.e.
weight, size, type etc.)
Lowest Per-unit
cost
Reliability Speed Total
Truck 1 2 4 2 2 11
Rail 2 1 3 3 3 12
Pipeline 5 5 1 1 4 16
Air 3 4 5 4 1 17
Water 4 3 2 5 5 19

36. INTERMODAL
 It is referred to as sixth mode of transportation
 Basically use of multiple mode of transportation to execute a single transport shipment
 Reason of growing substantially
 Fairly cost efficient
 Cost effective
Rail and Motor Carriers:- Point-to- point pickup and service known as trailer-on-flatcar(TOFC)
Rail and Water Carriers:- Point-to- point pickup and service known as container-on-flatcar (COFC).
Water and Motor Carriers:- Point-to- point pickup and service known as overseas manufactures.
Roll-On/ROLL-off(RO/RO) Ship:- those are flexible to use specially designed ,shore based ramps, wheel based
vehicles are on and off ship easily with loads.

37. VIDEO ON TRANSPORTATION IN LOGISTICS
 https://www.youtube.com/watch?v=o0iz3llVPL8

38. TRANSPORTATION PRICING AND CONSIDERATIONS
 Cost of service pricing :- The setting of a price for a service based on the cost incurred in
providing it
 Value of Service Pricing:- A pricing strategy that sets prices primarily , but not exclusively,
in the value, perceived or estimated , to the customer rather than on the cost of the
product or historical prices. (i.e. “ priced at what the market will bear “)
 Combination Pricing :- Price setting at a value between cost-of-service minimum and
value –of-service maximum
 Net-rate Pricing :- Established discount and accessorial charges are rolled into one all
inclusive price.

39. TERM OF SALE
 Term of Sale
 The delivery and payments terms agreed between a buyer and a seller .
 In International trade ,term of sale also set out the right and obligations of buyers and sellers as
application in the transportation of goods.
 Transportation Rate Categories
 Price charged by transportation carriers for moving an item or commodity from point A to
point B. Classified as line haul rates, class rates, exception rates, commodity rates and
miscellaneous rates

40. TRANSPORTATION REGULATION
 It is started to imposed a series of regulations
 THE GRANGER LAW (1870)
 INTERSTATE COMMERCE ACT (1887)
 TRANSPORTATION ACT (1920)
 MOTOR CARRIER ACT (1935)
 TRANSPORTATION ACT (1940)
 FEDERAL AVIATION ACT (1958)
 DEPARTMENT OF TRANSPORTATION ACT (1966)
 INTERSTATE COMMERCE COMMISSION (ICC)

41. TRANSPORTATION DEREGULATION
 Another strategy to protect nation from loose of money
 RAILROAD REVITALIZATION AND REGULATORY REFORM ACT (1976)
 AIR FREIGHT DEREGULATION (1977)
 MOTOR CARRIERS DEREGULATION (1980)
 SHIPPING ACT (1984)
 ICC TERMINATION ACT (1995)
 OCEAN SHIPPING REFORM ACT (1998)

42. OTHER TRANSPORTATION INTERMEDIARIES
 FRIEGHT FORWARDERS
Freight forwarders typically act as a shipper’s agent during the shipping process. Freight forwarders
select the mode and carrier for their clients’ shipments, provide and process documentation, and
make freight, terminal, and handling payments on behalf of their clients.
 LOAD OR TRANSPORTATION BROKERS
Find shipments for carriers for a fee. They bring shippers and carriers together.
 SHIPPER’S ASSOCIATIONS
They are a group of shippers that consolidates or distributes freight on a non-profit basis for the
members of the group to obtain volume rates or service contract rates.
 INTERMODAL MARKETING COMPANIES(IMC)
IMCs purchase rail and truck transportation services, utilize equipment from multiple sources, and
provide other value-added services under a single freight bill to the ultimate shipper.

43. TECHNOLOGY AND TRENDS IN TRANSPORTATION
 DRIVER MONITORING
 It is vehicle safety system
 To keep Track of driver and vehicle progress
 Monitor all activities like Mileage, Distance routes and all other behaviors.
 TRAFFIC COORDINATION
 Ability to communicate and access fleet information remotely to improve delivery timing.
 Coordinating driving patterns, delivering real time reports, updating information on surrounding
areas.

44. SAFETY TECHNOLOGY
 Stability control
 Antilock braking systems
 Collision Avoidance Systems
 Lane departure warning
 Interior Cameras
 Rearview cameras
 Blind Spot Warning devices
 Side monitor cameras and sensors

45. PLATOONING
https://www.youtube.com/watch?v=lpuwG4A56r0

46. ADVANCED VEHICLE EXPERIENCE
 It is new concept for trucks- the Walmart Advanced Vehicle Experience (W.A.V.E)
 Tractor, Aerodynamics, Range Extended Series Hybrid, turbine Power,.
 Fuel Neutral Capability, Component Electrification, Charge Mode, Hybrid Electric Mode
 VERTICALLY FOLDING CONTAINERS
 Reduce cost and inefficiencies moving empty containers
 Retrofitting old containers to be collapsible
 DRIVERLESS TRUCKS
 24hrs straight driving
 Fuel Efficiency

47. Automated Warehouses
 Ocado’s Grocery Packing Warehouse
 https://www.youtube.com/watch?v=4DKrcpa8Z_E

48. LOGISTICS MANAGEMENT SOFTWARE APPLICATIONS
 WAREHOUSE MANAGEMENT SYSTEMS(WMS)
 Software application to support & optimize warehouse functionality and distribution
centers.
 Supports day-by-day operations like organizing, staffing, directing and controlling the
utilization of available resources.
 Part of ERP.
 TRANSPORTATION MANAGEMENT SYSTEM(TMS)
 Interaction btw an organization’s OMS and WMS
 Used to select best mix transportation services and pricing
 TMS modules include : routine planning, optimization, execution, freight audit and
payment, carrier management.

49. REVERSE LOGISTICS
https://www.youtube.com/watch?v=sJ2RmOiIOok

50. FIVE R’S OF REVERSE LOGISTICS
 Returns
 Recalls
 Repair
 Repackaging
 Recycling