Logistics Management, BBA III Year Notes, Osmania University, 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.

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

2. 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.

3. 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.

4. The process of logistical integration can
be divided into four stages:
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.

5. 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.

6. 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-
ordinating role, as it interfaces with most

7. 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.

8. 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."

9. 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

11. 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.

12. 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.

13. 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.

14. 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.

15. 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

16. 3PL companies tend to
specialize in:
Inbound and outbound freight
Customs
Freight consolidation
Warehousing
Distribution
Order fulfillment
Cross-docking
Inventory management

17. 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.

18. 4PL companies tend to provide
(generally through 3PL partners):
Distribution
Procurement
Storage