This document provides an introduction to logistics and distribution systems. It defines key terms and discusses the scope and components of logistics. Logistics involves the physical and information flows from raw materials to finished goods and aims to have the right resources in the right place at the right time. The document outlines factors like transportation, warehousing, packaging and inventory that are part of an integrated logistics system. It also discusses concepts like total cost approach, trade-off analysis, and the financial impact of logistics planning and control.

1. INTRODUCTION TO
LOGISTICS &
DISTRIBUTION SYSTEMS

2. Associated Terms
• Physical Distribution
• Logistics
• Business Logistics
• Materials Management
• Procurement & Supply
• Product Flow
• Marketing Logistics
• Supply Chain Management
• Demand Chain Management

3. Scope & Definition
• Logistics = Supply + Materials Management + Distribution
• Logistics is concerned with physical and information flows
and storage from raw material through to the final distribution
of finished product.
• Logistics is a diverse and dynamic function that has to be
flexible and has to change according to the various
constraints and demand imposed upon it and with respect to
the environment it works.

4. Supply Chain= Suppliers +
Logistics+ Customers
Supply-
• Raw material
• Components
• Packaging
Items
• Product
Sourcing
• Imported
Materials
• Bought- in
parts
Materials
Management-
• Production
Process
• Sub-Assembly
• Work- in –
progress
• Packaging
• Finished Goods
Inventory
Distribution-
• Depots
• Distribution
Centers
Suppliers- Upstream / Inbound
Customers – Downstream / Outbound

5. Formal Definitions
• Logistics is the management of all activities which facilitate movement
and the coordination of supply and demand in creation of time and place
utility.
• Logistics management is the planning, implementation and control of the
efficient forward and reverse flow and storage of goods, services and
related information between the point of origin and point of consumption
in order to meet customer requirements.
• Logistics is the positioning of resource at the right time ,in the right place,
at the right cost, at the right quality.

6. Key Components of Distribution &
Logistics
• Storage, warehousing and materials handling
• Packaging & Unitization
• Inventory
• Transport
• Information & Control

7. Storage, warehousing and materials
handling
• Location of Warehouses
• Number & size of distribution depots
• Type of storage
• Materials handing equipment

8. Packaging & Unitization
• Unit Load
• Protective Packaging
• Handing systems

9. Inventory
• What to stock
• Where to stock
• How much to stock

10. Transport
• Mode of Transport
• Type of delivery operation
• Load planning
• Route Schedule

11. Information & Control
• Design Systems
• Control procedures
• Forecasting

12. • Logistics moving into , through and out of a firm describes the entire
process of materials and products
• Inbound Logistics covers the movement of materials received from
suppliers.
• Materials Management describes the movements of material within
a firm.
• Physical Distribution refers to the movement of goods outward
from the end of the assembly line to the customer.
.

13. Trends caused change
1. Transportation cost rose rapidly, involvement of higher level management.
2. Production Efficiency was reaching peak, was becoming difficult to generate
additional cost savings from production.
3. Fundamental change in inventory philosophy , from 50/50 it went to 90/10 in
terms of inventory of distributors and manufacturers to the retailers.
4. Product Lines proliferated.
5. Computer Technology- Data Management
6. Increased usage of computers
7. Increased public concern for recycling of product
8. Growth of several new large retail chains and distribution channels

14. Integrated logistics :
Integrated logistics system
moves inventory through a
constant and consecutive
chain of value added steps,
with its arriving when needed
in the proper quantity and
form.
Value added means that each
party involved acts to
enhance the value of the
product or service for those
who will be receiving it
Strategic logistics :
Using logistical competency
and channel wide partnership
alliances to gain competitive
advantage.
A firm with true strategic
capability is willing to commit
performance capabilities to
customers.
Leading edge logistics:
Leading edge firms do many things
differently
-----seek to use logistical
competency to gain & maintain
superiority
-------seek to add value to the
products and services they market
through cost effective logistics
system.
------leverage their assets by
forming strategic alliances with
service suppliers.

15. Total Cost Approach to Logistics
The systems approach to a problem involves not only a
recognition of the individual importance of the various elements
of what it is composed but also an acknowledgement of their
interrelationship.

16. Total Cost Approach to Logistics
Functions Included-
• Customer Service
• Demand Forecasting
• Documentation Flow
• Interplant Movements
• Inventory Management
• Order Processing
• Packaging

17. Total Cost Approach to Logistics
• Parts and service support
• Plant and warehouse site selection
• Production Scheduling
• Purchasing
• Returned Products
• Salvage scrap recycling and disposal
• Traffic management
• Warehouse and distribution management

18. Total Cost Approach to Logistics
• In many firms responsibility for some of the activities is shared with
other departments
• The key to the total cost approach is that all cost items are
considered simultaneously in attempting to meet a specified service
level.
• Cost trade offs are used, acknowledging that changing patterns or
functions of distribution cause some costs to increase and others to
decrease.

19. Responsibilities of Logistics
Managers
Must understand freight rates, warehouse layouts, inventory
analysis, production, purchasing and transportation laws
Logistics-Manager-Generic-JD.pdf

20. Logistics Manager
BUEN MANEJO DEL CAMPO INDIA PRIVATE LIMITED
Job description
Who is the Logistics and Warehouse Manager at Sistema.bio?
Reporting to the Operations Head, you will be responsible for coordinating logistics and transportation for our units across India.
You'll be in charge of:
•Coordinating with the global and local teams for product shipment, logistics, and warehousing.
•Coordinating with Technical operations and sales team for supply and deliveries to our clients.
•Creating a network of local transporters by understanding the type and availability of the vehicles.
•Maintaining and updating the list of suppliers and their standard, delivery times, and potential future development.
•Reviewing and analyzing all vendor/suppliers, their quality standard, delivery times, and price options to negotiate the best deal for pricing and supply contracts.
•Developing plans for purchasing raw materials, components, equipment, services, and supplies within the established cost parameters and budgets.
•Monitoring and Management of inventory and inventory movements across all warehouses.
•Ensuring the warehouse operations at peak efficiency, by supervising, organizing, directing, and training warehouse employees and establishing, monitoring, and managing operatio
goals.
•Developing warehouse & Logistics operations systems by determining product handling and storage requirements, equipment utilization, inventory management, gate processes, an
shipping.
•Training and managing a warehouse team to solve day-to-day operational issues and reach short- and long-term performance goals.
•Estimating and establishing cost parameters and budgets for warehouse & logistics operations.
•Reviewing & ensuring workflow, manning, and space requirements, and action plans while ensuring quality and customer service standards are met at all warehouses.
•Maintaining a safe and healthy work environment by establishing, following, and enforcing standards and procedures and complying with legal regulations.
•Domestic last-mile delivery handling.
More about YOU
•You have a Bachelors's degree with at least 4+ years of proven experience in logistics and procurement.
•You are fluent in English and Hindi.
•You have a proactive mindset with attention to detail with good negotiation, coordination, and problem-solving skills.
•You have great communicator skills: you are able to coordinate and communicate effectively to manage to queries between all stakeholders.
•You are comfortable with Microsoft Office applications.
Location, travel, and start date
•You will be mainly operating out of the Pune office with periodic visits to the field.
•You will be required to travel approximately 60% of the time.
•Start Date: Immediately

21. The Total Logistics Concept
• TLC aims to treat the many different elements that come
under the broad category of distribution and logistics as one
single integrated system.
• It is a recognition that the interrelationships between different
elements.

22. Trade Off Analysis
Four levels-
• Within distribution components
• Between distribution components
• Between company functions
• Between the company and external organizations

23. Trade Off Analysis
Within distribution components(within single functions)- Fixed storage
locations Vs. Random storage locations

24. Trade Off Analysis
Between distribution components(between different elements in
distribution) – Cost of packaging Vs. Warehousing and storage of
product

25. Trade Off Analysis
Between company functions(interface between company functions)-
Production run lengths Vs. associated warehousing cost

26. Trade Off Analysis
Between the company and external organizations (between companies)
– Direct Delivery to retail stores Vs. Delivery to retail depots

28. Planning for Distribution & Logistics
• In order to ensure that total logistics cost is put into practice
and that suitable trade offs are achieved ,it is essential that a
positive planning approach is adopted.
• Planning should be taken in certain hierarchy that reflects
different planning time horizons.
• These are generally classified as strategic, tactical and
operational.

29. Logistics Planning Hierarchy
Strategic Tactical Operational
Planning Control

30. • Planning is about ensuring that the operation is set up to run
properly-it is ‘doing the right thing’, or preparing for and
planning the operation ‘effectively’.
• Control is about managing the operation in the right way- it is
‘doing the thing right’ or making sure that the operation is
being run efficiently.

31. Major Functions
Medium to long term horizon
Overall Structural Decision
Trade offs between company functions &
different organizations
Corporate Financial plans and policies
Policy decisions developed into a
strategic plans
• Strategic
Short term to medium term horizon
Subsystem decisions are made
Annual budget provide finance/cost
basis
Strategic plan detail is made into an
operational plan
• Tactical
Day to day decision making
Operations controlled against
standards and rules
Control via weekly/monthly reports
Implementation of the operational
plan
• Operational

32. Customer Service
Channels of Distribution
Production Locations
Depot configuration
Depot types and numbers
Location & Size of depots
Third party or own account
Direct Delivery
• Strategic
Design & layout
Space Allocation
Storage Media
Handling Methods
Fork Lift Truck Types and
numbers
Unit Loads
• Tactical
Goods Receipt checking
Bulk Storage
Order Picking
Stock Replenishment
Load scheduling
Returns
Personnel availability
Stock Update
Documentation
Completion
Vehicle Maintenance
• Operational

33. The Planning & Control Cycle
Where are we now?
Feedback
Where do we want to
be?
Objectives
How are we going to get
there?
Planning
How do we know
when we have
arrived?
Monitoring/Control

34. Financial Impact of Logistics
• ROI= Profit / Capital Employed
• Profit= sales- cost
• Capital Employed= Inventory + cash& receivables+ Fixed
Assets
– Sales- OTIF, Service levels, Customer Relationships, After sales,
etc.
– Costs – Inventory Holding, Transport, Depot Locations, etc.
– Inventory- Raw materials, WIP, FG, Stock Location, Inventory
Turn, etc.
– Cash & Receivables – cash to cash cycle , order cycle time, etc.
– Fixed Assets- Warehouses, Depots, Transport, MHE,
Outsourcing, etc.

36. Globalization & Integration
Major Logistics Implications-
– Extended supply lead times
– Extended and unreliable transit times
– Multiple break bulk and consolidation options
– Multiple Freight Mode and cost options

37. Integrated Systems
Direct product profitability(DPP)- is technique
allocating all of the appropriate cost and
allowances to a given product.
All distribution costs are therefore assigned to
a specific product rather than taking an
average over whole product range.
Areas of inefficiency throughout the whole
logistics can be identified.
DPP techniques can identify the costs of
specific products to individual customers.

38. Integrated Systems
• Materials Requirements Planning(MRP)
• Manufacturing Resource Planning (MRP II)
• Distribution Requirement Planning (DRP)
• Just in Time (JIT)

39. Logistics Implications of different
Competitive Forces
Service Leader Cost Leader
Cost & service
Leader
Commodity
Market
Value Advantage-
Logistics Leverage Opportunities
• Tailored Service
• Distribution Channel Strategy
• Reliability
• Responsiveness
• Information
• Flexibility
Cost/Productivity Advantage
Logistics Leverage
Opportunities
• Capacity Utilization
• Asset Turn
• Low Inventory
• Low Wastage