The document provides an overview of logistics management, detailing its components such as inbound, outbound, and internal logistics, as well as the development of integrated logistics strategies aimed at optimizing supply chain management effectiveness. It emphasizes the importance of logistics in maximizing profitability, cash flow, and customer satisfaction through effective inventory management, financial control with suppliers, and the use of third-party logistics (3PL) and fourth-party logistics (4PL) companies. Additionally, it discusses reverse logistics and the necessity of logistics strategies aligning with company objectives to maintain high service levels despite changing supply chain dynamics.

1. LOGISTICS
MANAGEMENT
UNIT-1
PRESENTED BY
K.BALASRI PRASAD
B.Sc(KU), M.B.A(OU), NET(UGC), (Ph.D)(MGU)

3. UNIT – I :
INTRODUCTION :
Logistics Management, Inbound, Internal
and Outbound Logistics in SCM,
Developing the Logistics organization for
effective Supply Chain Management,
development of Integrated Logistics
Strategy, Logistics in Maximizing
profitability and cash flow, 3PL, 4PL,
International Logistics, Reverse Logistics.

4. Logistics Management:
Logistics management is a supply
chain management component that is used to meet
customer demands through the planning, control
and implementation of the effective movement and
storage of related information, goods and services
from origin to destination.

6. Inbound logistics:
 The process of bringing in purchased goods into the
company is known as inbound logistics.
 Inbound logistics refers to the transportation, the storage
and the receiving of goods into a business.
 It relates to goods procurement for office use or for the
production unit. In a manufacturing company, the
production unit purchases raw materials or components
from its suppliers for the production of other goods.
 Inbound logistics look at the supply chain and specifically
transportation as goods come into a company.
 Inbound logistics, therefore, focuses on the incoming
goods i.e. the inflow of goods from suppliers into the
warehouse.

8.  Outbound Logistics:
The process related to the movement and storage of
products from the end of the production line to the end
user.
It plays a critical role in a supplier's overall customer
relationship management process.
Outbound logistics refers to the processes involved in
the movement and storage of products and how
related information flows from the end of the
production line to the firm’s customer.
Outbound logistics relies profoundly on transportation
and storage of finished goods.
The process of packaging and distributing customer
orders using specific transportation is known as
outbound logistics.

10. Internal logistics:
 The area that covers the movement of materials and the
support operations that occur within a company.
 It comprises several processes, such as warehousing,
stock control, automation and storage systems, material
handling, equipment and information technology.
 It aids in regulating material flows within the institution,
ensuring that the right items are in the right place, in the
right quantity and at the right time.

11. Developing the Logistics organization for
effective Supply Chain Management:
 When a company creates a logistics strategy it is defining
the service levels at which its logistics organization is at its
most cost-effective.
The ultimate goal of any logistics strategy is to deliver what
your customers want and when they want it.
There are different component areas for each company but
the list should at least include the following:
Transportation: Does the current transportation strategies
help service levels?
Outsourcing: What outsourcing is used in the logistics
function? Would a partnership with a third party logistics
company improve service levels?

12. Logistics Systems: Do the current logistics systems provide
the level of data that is required to successfully implement a
logistics strategy or are new systems required?
Competitors: Review what the competitors offer. Can changes
to the company’s customer service improve service levels?
Information: Is the information that drives the logistics
organization real-time and accurate? If the data is inaccurate
then the decisions that are made will be in error.
Strategy Review: Are the objectives of the logistics
organization in line with company objectives and strategies?
A successfully implemented logistics strategy is important for
companies who are dedicated to keeping service levels at the
highest levels possible despite changes that occur in the supply
chain.

13. Development of Integrated Logistics Strategy
Integration has been one of the dominant themes in
the development of logistics management.
The process of integration has transformed the way
that companies manage the movement, storage, and
handling of their products.
The process of logistical integration can be
divided into four stages:

14. Stage-1
The first stage in the process is generally
considered to have been the “revolution in
physical distribution management,” which
began in the early 1960s in the U.S.A. and
involved the integration into a single
function of activities associated with the
outbound distribution of finished goods.

15. Stage-2
PDM was initially concerned only with the
distribution of finished products.
The same general principle was
subsequently applied to the inbound movement
of materials, components, and subassemblies,
generally known as “materials management.
By the late 1970s, many firms had
established “logistics departments” with overall
responsibility for the movement, storage, and
handling of products upstream and downstream
of the production operation.

16. Stage-3
Having achieved a high level of integration
within the logistics function, many firms
tried to co-ordinate logistics more closely
with other functions.
Most businesses have a “vertical”
structure built around a series of discrete
functions such as production, purchasing,
marketing, logistics, and sales, each with
their own objectives and budgets.
Logistics can play an important co-

17. Stage-4
To achieve wider, supply chain optimization it is
necessary for companies at different levels in
the chain to co-ordinate their operations. This is
the essence of supply chain management
(SCM).
The main driver of SCM over the past 20
years has unquestionably been the desire to
minimize inventory.

18. Reverse logistics:
“The process of
moving goods from their typical
final destination for the purpose
of capturing value, or proper
disposal. Remanufacturing and
refurbishing activities also may
be included in the definition of
reverse logistics."

19. Any process or management after the
delivery of the product involves reverse
logistics.
If the product is defective, the customer
would return the product.
The manufacturing firm would then
have to organize shipping of the defective
product, testing the product, dismantling,
repairing, recycling or disposing the
product.
The product would travel in reverse
through the supply chain network in order

21. Logistics in Maximizing profitability and cash flow:
When you think about Supply Chain
optimization you typically think of improving
delivery times, delivery accuracy and customer
service.
Here are four suggestions for how organization can
improve profitability by making quick and simple
savings:
1. Inventory Management:
Organizations must find the right balance between
minimizing their stocks and being able to meet order
demands. The threat of a stock shortage must be
visible before it actually arises.

22. 2. Supplier Cash Control:
A great deal of insight can be found in the supply and
payment agreements with suppliers.
There are a number of elements to consider:
 how you can avoid purchasing unnecessary stock
(through automated order placement),
 avoidance of costs for corrections in orders and supplies
 the optimization of the payment behaviour of suppliers.

23. 3. Operating Expenses Control:
There can be reasons for incorrect supplies
occurring, and instead of simply correcting the
relevant order, it’s important to search for the
point in the process where the error arose in
order to prevent the same mistake from
happening again.

24. 4. Customer Cash Control:
By continually measuring whether the right
product in the right quantity is delivered to the
right place at the time required by the client,
supply processes can be further optimized and
costly errors avoided.
Reducing the term between ordering and
payment, solving late payments, making
missing payments visible and invoicing for them
can save a great deal.

25. Third-party Logistics (3PL):
 Third-party logistics companies handle
physical distribution and logistics.
 3PL companies can do this by using their
own resources, such as warehouse
facilities, and their network of freight
transportation providers to help clients ship
or store their products appropriately.
 Whether in transit or in storage, 3PL
companies leverage their experience to
ensure that all steps are taken to keep the

26. 3PL companies tend to
specialize in:
Inbound and outbound freight
Customs
Freight consolidation
Warehousing
Distribution
Order fulfillment
Cross-docking
Inventory management

27. Fourth-party Logistics (4PL)
A 4PL company does not stop at
outsourcing logistics services but also
outsources the management of said
services.
Generally, 4PL companies have no way
of transportation or warehousing, but
rather use the transportation and
warehousing services of a 3PL
company.

28. 4PL companies tend to provide
(generally through 3PL partners):
Distribution
Procurement
Storage