SlideShare a Scribd company logo
1 of 36
Chapter
15
Market Logistics & Supply Chain
Management

SDM – Ch 15

Tata McGraw Hill Publishing

1
Logistics Defined
• Logistics means having the right thing, at
the right place, at the right time
• The science of planning, organizing and
managing activities that provide goods or
services – Logistics World, 1997

SDM – Ch 15

Tata McGraw Hill Publishing

2
Logistics
• Functions: planning, procurement,
transportation, supply and maintenance
• : science of planning, design and support of
business operations of procurement,
purchasing, inventory, warehousing,
distribution, transportation, customer support,
financial and human resources

SDM – Ch 15

Tata McGraw Hill Publishing

3
Scope of Logistics
•
•
•
•
•
•
•
•

Choice of markets
Procurement
Plant location and layout
Inventory management
Location and management of warehouses
Choices of carriers, mode of transport
Packaging decisions
Relevant to all enterprises: manufacturing,
Government, Institutions, service
organisations

SDM – Ch 15

Tata McGraw Hill Publishing

4
Input
•Natural
Resources
(land, facilities
Equipment)
•HR
•Finance
•Information

SDM – Ch 15

Logistics Activities
Customer service
Demand forecasting
Distribution
Communications
Inventory control
Materials handling
Order processing
Parts and service support
Plants and warehouse selection
Procurement
Packaging
Return goods handling
Salvage and scrap disposal
Traffic and transportation
Warehouse and storage

Tata McGraw Hill Publishing

Output
•Marketing
Orientation
(competitive
Advantage)
•Time and
Place utility
•Efficient move
to customer

5
Logistics and SCM

• Logistics tends to focus on transportation and
distribution, SCM focuses on purchasing and
procurement, production planning, demand
management, from popint of origin to point of
consumption
• Supply chain management also logistics functions
plus purchasing,sourcing, procurement,
manufacturing operations, location planning,
• All activities and flows from point of origin to point of
comsumption of a materials

SDM – Ch 15

Tata McGraw Hill Publishing

6
Links and Flows
General material flow/ service flow
Information flow
Information flow
Customer’s
customer

Customer

Lead Firm

Supplier

Supplier’s
supplier

General cash flow
Outbound / Downstream logistics

SDM – Ch 15

Inbound / Upstream logistics

Tata McGraw Hill Publishing

Source: ICFAI

7
Source: Michael Porter

The Value Chain
S
U
P
P
P
O
R
T

Company Infrastructure
Organisation, people, methods

margin

Systems & technology
Procurement

Inbound
Operations
logistics

Outbound Marketing
logistics
& sales

Service

margin

SDM – Ch 15

Tata McGraw
Primary activities Hill Publishing

8
Inbound and outbound
logistics
• Inbound logistics
• Receiving storing issuing inputs and
taking care of materials handling,
inventory control, scheduling for
production,
• Interface with company’s suppliers,
vendors and other service providers
SDM – Ch 15

Tata McGraw Hill Publishing

9
• Outbound logistics
• Distributing finished goods to dealers/
stockists/customers
• Interface with copmay’s customers

SDM – Ch 15

Tata McGraw Hill Publishing

10
Logistics Focus Areas
Customer service related
Packaging
Order processing
Spare parts and service support
After sales Customer service
support
Demand forecasting
Distribution communications
Return goods handling

Operations related
Plant and warehouse site
location
Procurement
Inventory control
Materials handling
Salvage and scrap disposal
Traffic and transportation
Warehousing and storage

Logistics may be confined to the company whereas SCM extends beyond
SDM – Ch 15

Tata McGraw Hill Publishing

11
Supply Chain Management
• Business context:
–
–
–
–

Globalization of the market place
Advances in technology
Increasingly demanding, informed customer base
Purchase decisions on dimensions of quality, price
and time

• Innovative supply chain:
–
–
–
–

To meet customer driven challenges
To reduce costs
Improve service levels
Enhance speed to market

SDM – Ch 15

Tata McGraw Hill Publishing

12
Supply Chain Integration
Customer Analysis
Order Fulfillment
Purchasing/Supplier
Partnering

Storage &
Transportation

Integrated
Supply Chain
Management

Demand & Lead
Time Management

Manufacturing/
Re-manufacturing/
Assembly
SDM – Ch 15

Inventory Management and
control

Materials
Tata McGraw Hill Publishing
Management

Inventory management…
13
• Inventory Management

SDM – Ch 15

Tata McGraw Hill Publishing

14
Why Carry Inventory?
• Support production requirements
• Support operational requirements
• Maximize customer service – ensure
availability when needed – protect
against uncertainty
• Hedge against marketplace uncertainty
• Take advantage of order quantity
discounts
SDM – Ch 15

Tata McGraw Hill Publishing

15
Factors Which Drive Inventory
• Target service level parameters
• Lot sizing practices
• Safety stock and safety time
conventions
• Volume discounts and purchase
arrangements
• Seasonal build up needs
SDM – Ch 15

Tata McGraw Hill Publishing

16
Categories of Inventory
• Anticipation – built in anticipation of future
demand – peak season, strike, promotion
• Fluctuation (safety) – to cover random,
unpredictable fluctuations in supply and
demand and lead time – to prevent disruption
in operations, deliveries etc
• Lot-size – to take advantage of quantity
discounts, reduce shipping, set up and
clerical costs – also called cycle stock
SDM – Ch 15

Tata McGraw Hill Publishing

17
Categories of Inventory
• Transportation – pipeline or movement
inventories – to cover the time needed to
move from one point to another – factory to
distribution point for example
• Hedge – for materials where prices are
volatile
• Maintenance, repair and operating supplies
(MRO) – to support M and O – spare parts,
lubricants, consumables etc
SDM – Ch 15

Tata McGraw Hill Publishing

18
Performance Measures
• Inventory turns = Annual cost of goods
sold /average inventory in value
• Days of sales = inventory on hand /
average daily sales

SDM – Ch 15

Tata McGraw Hill Publishing

19
Types of Classification
• ABC category – most common for all
• HML - high, medium, low - similar
• FSND – fast moving, slow moving, nonmoving, dead – spare parts / FG

SDM – Ch 15

Tata McGraw Hill Publishing

20
ABC Inventory Analysis
• Based on Pareto’s law:
– A – 20% items worth 80% of value
– B – 30% items worth 15% of value
– C – about 50% items account for 5% of the usage

• Classify items based on the above criteria
• Apply degree of control in proportion to the
importance of the group

SDM – Ch 15

Tata McGraw Hill Publishing

21
Inventory Related Costs
• Unit costs – basic value of the item carried
• Ordering costs – generating and sending a
material release, transport, any other
acquisition costs
• Carrying costs – capital, storage,
obsolescence
• Stock-out costs
• Quality costs – non-conforming goods
• Other costs – duties, tooling, exchange rate
differences etc
SDM – Ch 15

Tata McGraw Hill Publishing

22
Approaches for Controlling
Inventory
• Continuous review:
– Safety stocks and forecasting methods
– Excess and obsolete inventory

• Part simplification and re-design
• On-site supplier managed inventory
• Use of supply chain inventory management
systems, Materials Requirement Planning,
Distribution Requirement Planning etc
• Automated inventory tracking systems
• Supplier – buyer cycle-time reduction
Warehouse management…
SDM – Ch 15

Tata McGraw Hill Publishing

23
Functions
Warehouses

Material
handling

Customer
service

Information
transfer

Receive goods
Identify goods
Sort goods
Despatch to storage
Hold inventory
Recall, select goods
Marshal the shipment
Despatch the shipment
Prepare records and
advices
SDM – Ch 15

Storage
function

Temporary

Tata McGraw Hill Publishing

Permanent

24
Purpose of Warehousing
• To provide desired level of customer
service at the lowest possible total cost
• It is that part of the firm’s logistics system that
stores products (RM, Packing Materials, WIP,
FG) at and between point of origin and point
of consumption and provides info to
management on the status, condition and
disposition of items being stored
• Distribution warehousing relates mainly to FG
SDM – Ch 15

Tata McGraw Hill Publishing

25
Warehouses
• Support manufacturing
• Mix products from multiple facilities for
shipment to a single customer
• Break-bulk
• Aggregate
• Used more as a ‘flow-thru’ point than as
a ‘hoarding’ point
SDM – Ch 15

Tata McGraw Hill Publishing

26
Distribution Warehousing
• The objective is to set up a network of
warehouses closest to the customer
locations to service markets better and
minimise cost
• Could be C&FA s, depots or distribution
centers
• Macro location strategies:
– Market positioned
– Production positioned
– Intermediately positioned
SDM – Ch 15

Tata McGraw Hill Publishing

27
Transportation
• Very important in the Logistics function:
– Movement across space or distance adds value to
products
– Transportation provides time and place utility

• Role of transportation includes:
– Provides opportunity for growth under competitive
conditions
– Deeper penetration into markets
– Wider distribution means greater demand
– Can influence product prices favourably
SDM – Ch 15

Tata McGraw Hill Publishing

Principles….

28
Transportation Principles
•
•
•
•
•
•
•
•

Continuous flow
Optimise unit of cargo - stackability
Maximum vehicle unit – capacity utilization
Adaptation of vehicle unit to volume and
nature of traffic
Standardisation
Compatibility of unit load equipment
Minimum of dead weight to total weight
Maximum utilization of capital, equipment and
personnel

SDM – Ch 15

Tata McGraw Hill Publishing

Process….

29
Comparison of modes……

Reverse Logistics
• Movement of goods from the market or
customer back to the company
• The need:
–
–
–
–

Increased awareness of the environment
Stringent legislation
For some it is part of the business
Profitability of dealing with scrap, surplus

• Surplus, obsolescence can result due to:
– Over optimistic sales forecasts, change in product
specs, errors in estimating material usage, losses
in processing or overbuying based on incentives
SDM – Ch 15

Tata McGraw Hill Publishing

30
Advantages of Rail
• Economy – more so for goods over
long distances
• Efficiency of energy
• Reliability – not affected by weather
conditions

SDM – Ch 15

Tata McGraw Hill Publishing

31
Disadvantages
• Uneconomical for small shipments and
short distances
• Not suitable for remote stations
• Costly terminal handling facilities
• Inflexible time schedules
Road transport…..
SDM – Ch 15

Tata McGraw Hill Publishing

32
Road Freight Advantages
• Through movement – direct from consignor to
consignee, no transshipment
• Flexibility – routes and loading routines can
be easily altered, operate day and night
• Less capital costs – for own fleet + immunity
from industrial action
• Fast turn-around – if articulated units like
tractors and trailers are used
• Minimum delays
SDM – Ch 15

Tata McGraw Hill Publishing

33
Disadvantages
• Susceptibility to weather and road conditions
– in spite of the best protection
• Unsuitability for heavy loads – rail transport
more economical for bulk loads
• Unsuitability for long distances – again the
rail telescopic rates are more favourable
Air transport….
SDM – Ch 15

Tata McGraw Hill Publishing

34
Air Transport Advantages
•
•
•
•
•

Faster mode
Reduction in cost particularly inventory
Broad service range
Increasing capabilities
Disadvantages:
– High cost
– Weather affects flight conditions
– Limitations on heavy consignments

SDM – Ch 15

Tata McGraw Hill Publishing

Water transport……
35
Water Transport
• Advantages:
– Mass movement of bulk
– Lowest freight cost
– Preferred for long haul of low value commodities

• Disadvantages:
– Not for quick transit
– Suitable for certain types on commodities only
Pipeline….
SDM – Ch 15

Tata McGraw Hill Publishing

36

More Related Content

What's hot

3rd party logistic
3rd party logistic3rd party logistic
3rd party logistic
vikramkr3116
 
Marketing channel policies
Marketing channel policiesMarketing channel policies
Marketing channel policies
Jerom James
 
Ch1: Introduction to Sales and Distribution Management
Ch1: Introduction to Sales and Distribution ManagementCh1: Introduction to Sales and Distribution Management
Ch1: Introduction to Sales and Distribution Management
itsvineeth209
 
Supply Chain in Retail management
Supply Chain  in Retail managementSupply Chain  in Retail management
Supply Chain in Retail management
Lohith Lohi
 
Logistics strategy & planning, Customer Service & Products
Logistics strategy & planning, Customer Service & ProductsLogistics strategy & planning, Customer Service & Products
Logistics strategy & planning, Customer Service & Products
Fahad Ali
 
Role of IT in supply chain management
Role of IT in supply chain managementRole of IT in supply chain management
Role of IT in supply chain management
Neelam Yadav
 

What's hot (20)

3rd party logistic
3rd party logistic3rd party logistic
3rd party logistic
 
Supply Chain Management, Demand and Customer Service
Supply Chain Management, Demand and Customer ServiceSupply Chain Management, Demand and Customer Service
Supply Chain Management, Demand and Customer Service
 
INTRODUCTION TO SUPPLY CHAIN MANAGEMENT
INTRODUCTION TO SUPPLY CHAIN MANAGEMENTINTRODUCTION TO SUPPLY CHAIN MANAGEMENT
INTRODUCTION TO SUPPLY CHAIN MANAGEMENT
 
Introduction to Supply Chain Management
Introduction to Supply Chain Management Introduction to Supply Chain Management
Introduction to Supply Chain Management
 
Supply Chain Management, Sourcing Pricing and Procurement Process
Supply Chain Management, Sourcing Pricing and Procurement ProcessSupply Chain Management, Sourcing Pricing and Procurement Process
Supply Chain Management, Sourcing Pricing and Procurement Process
 
Market Logistics & Supply Chain Management
Market Logistics & Supply Chain ManagementMarket Logistics & Supply Chain Management
Market Logistics & Supply Chain Management
 
Coordination in a supply chain
Coordination in a supply chainCoordination in a supply chain
Coordination in a supply chain
 
Marketing channel policies
Marketing channel policiesMarketing channel policies
Marketing channel policies
 
Logistics management
Logistics managementLogistics management
Logistics management
 
Ch1: Introduction to Sales and Distribution Management
Ch1: Introduction to Sales and Distribution ManagementCh1: Introduction to Sales and Distribution Management
Ch1: Introduction to Sales and Distribution Management
 
LOGISTICS AND SUPPLY CHAIN INFORMATION SYSTEM
LOGISTICS AND SUPPLY CHAIN INFORMATION SYSTEMLOGISTICS AND SUPPLY CHAIN INFORMATION SYSTEM
LOGISTICS AND SUPPLY CHAIN INFORMATION SYSTEM
 
Supply Chain in Retail management
Supply Chain  in Retail managementSupply Chain  in Retail management
Supply Chain in Retail management
 
Supply Chain Management & new trends
Supply Chain Management & new trendsSupply Chain Management & new trends
Supply Chain Management & new trends
 
Supply chain management and logistics management
Supply chain management and logistics managementSupply chain management and logistics management
Supply chain management and logistics management
 
Logistics management
Logistics management Logistics management
Logistics management
 
Logistics strategy & planning, Customer Service & Products
Logistics strategy & planning, Customer Service & ProductsLogistics strategy & planning, Customer Service & Products
Logistics strategy & planning, Customer Service & Products
 
Objectives of supply chain management
Objectives of supply chain managementObjectives of supply chain management
Objectives of supply chain management
 
Role of information Technology in Supply Chain Manageent
Role of information Technology in Supply Chain ManageentRole of information Technology in Supply Chain Manageent
Role of information Technology in Supply Chain Manageent
 
INTEGRATED LOGISTICS
INTEGRATED LOGISTICSINTEGRATED LOGISTICS
INTEGRATED LOGISTICS
 
Role of IT in supply chain management
Role of IT in supply chain managementRole of IT in supply chain management
Role of IT in supply chain management
 

Similar to Market Logistics & Supply Chain Management

market logistics & scm
market logistics & scmmarket logistics & scm
market logistics & scm
Rahul9105
 
Supply Chain Management
Supply Chain ManagementSupply Chain Management
Supply Chain Management
Oni Sharma
 
SlideEgg-74440-Logistics PowerPoint Template.pptx
SlideEgg-74440-Logistics PowerPoint Template.pptxSlideEgg-74440-Logistics PowerPoint Template.pptx
SlideEgg-74440-Logistics PowerPoint Template.pptx
ManojMba2
 
Logistic and supply chain managment
Logistic and supply chain managmentLogistic and supply chain managment
Logistic and supply chain managment
Modassar Nazar
 
Supply Chain Design Lecture 1 Concepts of Supply Chain.pptx
Supply Chain Design Lecture 1 Concepts of Supply Chain.pptxSupply Chain Design Lecture 1 Concepts of Supply Chain.pptx
Supply Chain Design Lecture 1 Concepts of Supply Chain.pptx
ABuBaKarZaHeer3
 

Similar to Market Logistics & Supply Chain Management (20)

Ch15
Ch15Ch15
Ch15
 
market logistics & scm
market logistics & scmmarket logistics & scm
market logistics & scm
 
Supply chain management and its importance
Supply chain management and its importanceSupply chain management and its importance
Supply chain management and its importance
 
SCM
SCMSCM
SCM
 
Supply Chain Management
Supply Chain ManagementSupply Chain Management
Supply Chain Management
 
Supply chain management presentation
Supply chain management presentationSupply chain management presentation
Supply chain management presentation
 
Planning building & operating 3rd party warehousing
Planning building & operating 3rd party warehousingPlanning building & operating 3rd party warehousing
Planning building & operating 3rd party warehousing
 
EIS SUPPLY CHAIN MGT.ppt
EIS SUPPLY  CHAIN  MGT.pptEIS SUPPLY  CHAIN  MGT.ppt
EIS SUPPLY CHAIN MGT.ppt
 
Introduction to Supply Chain Management
Introduction to Supply Chain ManagementIntroduction to Supply Chain Management
Introduction to Supply Chain Management
 
Module 1.2.pptx
Module 1.2.pptxModule 1.2.pptx
Module 1.2.pptx
 
SlideEgg-74440-Logistics PowerPoint Template.pptx
SlideEgg-74440-Logistics PowerPoint Template.pptxSlideEgg-74440-Logistics PowerPoint Template.pptx
SlideEgg-74440-Logistics PowerPoint Template.pptx
 
Logistic and supply chain managment
Logistic and supply chain managmentLogistic and supply chain managment
Logistic and supply chain managment
 
3 pl & 4pl final
3 pl & 4pl final3 pl & 4pl final
3 pl & 4pl final
 
Session 19- Supply Chain management.pptx
Session 19- Supply Chain management.pptxSession 19- Supply Chain management.pptx
Session 19- Supply Chain management.pptx
 
Scm
Scm Scm
Scm
 
SCM
SCMSCM
SCM
 
Supply Chain Design Lecture 1 Concepts of Supply Chain.pptx
Supply Chain Design Lecture 1 Concepts of Supply Chain.pptxSupply Chain Design Lecture 1 Concepts of Supply Chain.pptx
Supply Chain Design Lecture 1 Concepts of Supply Chain.pptx
 
Supply chain management-Introduction-Part 1
Supply chain management-Introduction-Part 1Supply chain management-Introduction-Part 1
Supply chain management-Introduction-Part 1
 
Lean logistics
Lean logisticsLean logistics
Lean logistics
 
Topic 1 Logistics and SCM (1).pptx
Topic 1 Logistics and SCM (1).pptxTopic 1 Logistics and SCM (1).pptx
Topic 1 Logistics and SCM (1).pptx
 

More from Sameer Chandrakar

More from Sameer Chandrakar (12)

Training, Motivating, Compensating, and Leading the Salesforce
Training, Motivating, Compensating, and Leading the SalesforceTraining, Motivating, Compensating, and Leading the Salesforce
Training, Motivating, Compensating, and Leading the Salesforce
 
Organising and Staffing the Salesforce
Organising and Staffing the SalesforceOrganising and Staffing the Salesforce
Organising and Staffing the Salesforce
 
Management of Sales Territories and Quotas
Management of Sales Territories and QuotasManagement of Sales Territories and Quotas
Management of Sales Territories and Quotas
 
Planning, Sales Forecasting, and Budgeting
Planning, Sales Forecasting, and BudgetingPlanning, Sales Forecasting, and Budgeting
Planning, Sales Forecasting, and Budgeting
 
Personal Selling: Preparation and Process
Personal Selling: Preparation and ProcessPersonal Selling: Preparation and Process
Personal Selling: Preparation and Process
 
Introduction to Sales and Distribution Management
Introduction to Sales and Distribution ManagementIntroduction to Sales and Distribution Management
Introduction to Sales and Distribution Management
 
Introduction and nature of entrepreneurship
Introduction and nature of entrepreneurshipIntroduction and nature of entrepreneurship
Introduction and nature of entrepreneurship
 
finance and institutional support for entreprenurship
finance and institutional support for entreprenurshipfinance and institutional support for entreprenurship
finance and institutional support for entreprenurship
 
social entrepreneurshil
social entrepreneurshilsocial entrepreneurshil
social entrepreneurshil
 
Rural entrepreneurship in detail
Rural entrepreneurship in detailRural entrepreneurship in detail
Rural entrepreneurship in detail
 
role of universitites and colleges in entrep
role of universitites and colleges in entreprole of universitites and colleges in entrep
role of universitites and colleges in entrep
 
Entrepreneur sources of venture capital
Entrepreneur sources of venture capitalEntrepreneur sources of venture capital
Entrepreneur sources of venture capital
 

Recently uploaded

Personalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes GuàrdiaPersonalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes Guàrdia
EADTU
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code Examples
Peter Brusilovsky
 

Recently uploaded (20)

Spring gala 2024 photo slideshow - Celebrating School-Community Partnerships
Spring gala 2024 photo slideshow - Celebrating School-Community PartnershipsSpring gala 2024 photo slideshow - Celebrating School-Community Partnerships
Spring gala 2024 photo slideshow - Celebrating School-Community Partnerships
 
Graduate Outcomes Presentation Slides - English (v3).pptx
Graduate Outcomes Presentation Slides - English (v3).pptxGraduate Outcomes Presentation Slides - English (v3).pptx
Graduate Outcomes Presentation Slides - English (v3).pptx
 
DEMONSTRATION LESSON IN ENGLISH 4 MATATAG CURRICULUM
DEMONSTRATION LESSON IN ENGLISH 4 MATATAG CURRICULUMDEMONSTRATION LESSON IN ENGLISH 4 MATATAG CURRICULUM
DEMONSTRATION LESSON IN ENGLISH 4 MATATAG CURRICULUM
 
Supporting Newcomer Multilingual Learners
Supporting Newcomer  Multilingual LearnersSupporting Newcomer  Multilingual Learners
Supporting Newcomer Multilingual Learners
 
Personalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes GuàrdiaPersonalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes Guàrdia
 
ESSENTIAL of (CS/IT/IS) class 07 (Networks)
ESSENTIAL of (CS/IT/IS) class 07 (Networks)ESSENTIAL of (CS/IT/IS) class 07 (Networks)
ESSENTIAL of (CS/IT/IS) class 07 (Networks)
 
Analyzing and resolving a communication crisis in Dhaka textiles LTD.pptx
Analyzing and resolving a communication crisis in Dhaka textiles LTD.pptxAnalyzing and resolving a communication crisis in Dhaka textiles LTD.pptx
Analyzing and resolving a communication crisis in Dhaka textiles LTD.pptx
 
e-Sealing at EADTU by Kamakshi Rajagopal
e-Sealing at EADTU by Kamakshi Rajagopale-Sealing at EADTU by Kamakshi Rajagopal
e-Sealing at EADTU by Kamakshi Rajagopal
 
Observing-Correct-Grammar-in-Making-Definitions.pptx
Observing-Correct-Grammar-in-Making-Definitions.pptxObserving-Correct-Grammar-in-Making-Definitions.pptx
Observing-Correct-Grammar-in-Making-Definitions.pptx
 
MOOD STABLIZERS DRUGS.pptx
MOOD     STABLIZERS           DRUGS.pptxMOOD     STABLIZERS           DRUGS.pptx
MOOD STABLIZERS DRUGS.pptx
 
Mattingly "AI and Prompt Design: LLMs with NER"
Mattingly "AI and Prompt Design: LLMs with NER"Mattingly "AI and Prompt Design: LLMs with NER"
Mattingly "AI and Prompt Design: LLMs with NER"
 
How To Create Editable Tree View in Odoo 17
How To Create Editable Tree View in Odoo 17How To Create Editable Tree View in Odoo 17
How To Create Editable Tree View in Odoo 17
 
VAMOS CUIDAR DO NOSSO PLANETA! .
VAMOS CUIDAR DO NOSSO PLANETA!                    .VAMOS CUIDAR DO NOSSO PLANETA!                    .
VAMOS CUIDAR DO NOSSO PLANETA! .
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code Examples
 
ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH FORM 50 CÂU TRẮC NGHI...
ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH FORM 50 CÂU TRẮC NGHI...ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH FORM 50 CÂU TRẮC NGHI...
ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH FORM 50 CÂU TRẮC NGHI...
 
UChicago CMSC 23320 - The Best Commit Messages of 2024
UChicago CMSC 23320 - The Best Commit Messages of 2024UChicago CMSC 23320 - The Best Commit Messages of 2024
UChicago CMSC 23320 - The Best Commit Messages of 2024
 
ANTI PARKISON DRUGS.pptx
ANTI         PARKISON          DRUGS.pptxANTI         PARKISON          DRUGS.pptx
ANTI PARKISON DRUGS.pptx
 
The Story of Village Palampur Class 9 Free Study Material PDF
The Story of Village Palampur Class 9 Free Study Material PDFThe Story of Village Palampur Class 9 Free Study Material PDF
The Story of Village Palampur Class 9 Free Study Material PDF
 
How to Send Pro Forma Invoice to Your Customers in Odoo 17
How to Send Pro Forma Invoice to Your Customers in Odoo 17How to Send Pro Forma Invoice to Your Customers in Odoo 17
How to Send Pro Forma Invoice to Your Customers in Odoo 17
 
How to Manage Website in Odoo 17 Studio App.pptx
How to Manage Website in Odoo 17 Studio App.pptxHow to Manage Website in Odoo 17 Studio App.pptx
How to Manage Website in Odoo 17 Studio App.pptx
 

Market Logistics & Supply Chain Management

  • 1. Chapter 15 Market Logistics & Supply Chain Management SDM – Ch 15 Tata McGraw Hill Publishing 1
  • 2. Logistics Defined • Logistics means having the right thing, at the right place, at the right time • The science of planning, organizing and managing activities that provide goods or services – Logistics World, 1997 SDM – Ch 15 Tata McGraw Hill Publishing 2
  • 3. Logistics • Functions: planning, procurement, transportation, supply and maintenance • : science of planning, design and support of business operations of procurement, purchasing, inventory, warehousing, distribution, transportation, customer support, financial and human resources SDM – Ch 15 Tata McGraw Hill Publishing 3
  • 4. Scope of Logistics • • • • • • • • Choice of markets Procurement Plant location and layout Inventory management Location and management of warehouses Choices of carriers, mode of transport Packaging decisions Relevant to all enterprises: manufacturing, Government, Institutions, service organisations SDM – Ch 15 Tata McGraw Hill Publishing 4
  • 5. Input •Natural Resources (land, facilities Equipment) •HR •Finance •Information SDM – Ch 15 Logistics Activities Customer service Demand forecasting Distribution Communications Inventory control Materials handling Order processing Parts and service support Plants and warehouse selection Procurement Packaging Return goods handling Salvage and scrap disposal Traffic and transportation Warehouse and storage Tata McGraw Hill Publishing Output •Marketing Orientation (competitive Advantage) •Time and Place utility •Efficient move to customer 5
  • 6. Logistics and SCM • Logistics tends to focus on transportation and distribution, SCM focuses on purchasing and procurement, production planning, demand management, from popint of origin to point of consumption • Supply chain management also logistics functions plus purchasing,sourcing, procurement, manufacturing operations, location planning, • All activities and flows from point of origin to point of comsumption of a materials SDM – Ch 15 Tata McGraw Hill Publishing 6
  • 7. Links and Flows General material flow/ service flow Information flow Information flow Customer’s customer Customer Lead Firm Supplier Supplier’s supplier General cash flow Outbound / Downstream logistics SDM – Ch 15 Inbound / Upstream logistics Tata McGraw Hill Publishing Source: ICFAI 7
  • 8. Source: Michael Porter The Value Chain S U P P P O R T Company Infrastructure Organisation, people, methods margin Systems & technology Procurement Inbound Operations logistics Outbound Marketing logistics & sales Service margin SDM – Ch 15 Tata McGraw Primary activities Hill Publishing 8
  • 9. Inbound and outbound logistics • Inbound logistics • Receiving storing issuing inputs and taking care of materials handling, inventory control, scheduling for production, • Interface with company’s suppliers, vendors and other service providers SDM – Ch 15 Tata McGraw Hill Publishing 9
  • 10. • Outbound logistics • Distributing finished goods to dealers/ stockists/customers • Interface with copmay’s customers SDM – Ch 15 Tata McGraw Hill Publishing 10
  • 11. Logistics Focus Areas Customer service related Packaging Order processing Spare parts and service support After sales Customer service support Demand forecasting Distribution communications Return goods handling Operations related Plant and warehouse site location Procurement Inventory control Materials handling Salvage and scrap disposal Traffic and transportation Warehousing and storage Logistics may be confined to the company whereas SCM extends beyond SDM – Ch 15 Tata McGraw Hill Publishing 11
  • 12. Supply Chain Management • Business context: – – – – Globalization of the market place Advances in technology Increasingly demanding, informed customer base Purchase decisions on dimensions of quality, price and time • Innovative supply chain: – – – – To meet customer driven challenges To reduce costs Improve service levels Enhance speed to market SDM – Ch 15 Tata McGraw Hill Publishing 12
  • 13. Supply Chain Integration Customer Analysis Order Fulfillment Purchasing/Supplier Partnering Storage & Transportation Integrated Supply Chain Management Demand & Lead Time Management Manufacturing/ Re-manufacturing/ Assembly SDM – Ch 15 Inventory Management and control Materials Tata McGraw Hill Publishing Management Inventory management… 13
  • 14. • Inventory Management SDM – Ch 15 Tata McGraw Hill Publishing 14
  • 15. Why Carry Inventory? • Support production requirements • Support operational requirements • Maximize customer service – ensure availability when needed – protect against uncertainty • Hedge against marketplace uncertainty • Take advantage of order quantity discounts SDM – Ch 15 Tata McGraw Hill Publishing 15
  • 16. Factors Which Drive Inventory • Target service level parameters • Lot sizing practices • Safety stock and safety time conventions • Volume discounts and purchase arrangements • Seasonal build up needs SDM – Ch 15 Tata McGraw Hill Publishing 16
  • 17. Categories of Inventory • Anticipation – built in anticipation of future demand – peak season, strike, promotion • Fluctuation (safety) – to cover random, unpredictable fluctuations in supply and demand and lead time – to prevent disruption in operations, deliveries etc • Lot-size – to take advantage of quantity discounts, reduce shipping, set up and clerical costs – also called cycle stock SDM – Ch 15 Tata McGraw Hill Publishing 17
  • 18. Categories of Inventory • Transportation – pipeline or movement inventories – to cover the time needed to move from one point to another – factory to distribution point for example • Hedge – for materials where prices are volatile • Maintenance, repair and operating supplies (MRO) – to support M and O – spare parts, lubricants, consumables etc SDM – Ch 15 Tata McGraw Hill Publishing 18
  • 19. Performance Measures • Inventory turns = Annual cost of goods sold /average inventory in value • Days of sales = inventory on hand / average daily sales SDM – Ch 15 Tata McGraw Hill Publishing 19
  • 20. Types of Classification • ABC category – most common for all • HML - high, medium, low - similar • FSND – fast moving, slow moving, nonmoving, dead – spare parts / FG SDM – Ch 15 Tata McGraw Hill Publishing 20
  • 21. ABC Inventory Analysis • Based on Pareto’s law: – A – 20% items worth 80% of value – B – 30% items worth 15% of value – C – about 50% items account for 5% of the usage • Classify items based on the above criteria • Apply degree of control in proportion to the importance of the group SDM – Ch 15 Tata McGraw Hill Publishing 21
  • 22. Inventory Related Costs • Unit costs – basic value of the item carried • Ordering costs – generating and sending a material release, transport, any other acquisition costs • Carrying costs – capital, storage, obsolescence • Stock-out costs • Quality costs – non-conforming goods • Other costs – duties, tooling, exchange rate differences etc SDM – Ch 15 Tata McGraw Hill Publishing 22
  • 23. Approaches for Controlling Inventory • Continuous review: – Safety stocks and forecasting methods – Excess and obsolete inventory • Part simplification and re-design • On-site supplier managed inventory • Use of supply chain inventory management systems, Materials Requirement Planning, Distribution Requirement Planning etc • Automated inventory tracking systems • Supplier – buyer cycle-time reduction Warehouse management… SDM – Ch 15 Tata McGraw Hill Publishing 23
  • 24. Functions Warehouses Material handling Customer service Information transfer Receive goods Identify goods Sort goods Despatch to storage Hold inventory Recall, select goods Marshal the shipment Despatch the shipment Prepare records and advices SDM – Ch 15 Storage function Temporary Tata McGraw Hill Publishing Permanent 24
  • 25. Purpose of Warehousing • To provide desired level of customer service at the lowest possible total cost • It is that part of the firm’s logistics system that stores products (RM, Packing Materials, WIP, FG) at and between point of origin and point of consumption and provides info to management on the status, condition and disposition of items being stored • Distribution warehousing relates mainly to FG SDM – Ch 15 Tata McGraw Hill Publishing 25
  • 26. Warehouses • Support manufacturing • Mix products from multiple facilities for shipment to a single customer • Break-bulk • Aggregate • Used more as a ‘flow-thru’ point than as a ‘hoarding’ point SDM – Ch 15 Tata McGraw Hill Publishing 26
  • 27. Distribution Warehousing • The objective is to set up a network of warehouses closest to the customer locations to service markets better and minimise cost • Could be C&FA s, depots or distribution centers • Macro location strategies: – Market positioned – Production positioned – Intermediately positioned SDM – Ch 15 Tata McGraw Hill Publishing 27
  • 28. Transportation • Very important in the Logistics function: – Movement across space or distance adds value to products – Transportation provides time and place utility • Role of transportation includes: – Provides opportunity for growth under competitive conditions – Deeper penetration into markets – Wider distribution means greater demand – Can influence product prices favourably SDM – Ch 15 Tata McGraw Hill Publishing Principles…. 28
  • 29. Transportation Principles • • • • • • • • Continuous flow Optimise unit of cargo - stackability Maximum vehicle unit – capacity utilization Adaptation of vehicle unit to volume and nature of traffic Standardisation Compatibility of unit load equipment Minimum of dead weight to total weight Maximum utilization of capital, equipment and personnel SDM – Ch 15 Tata McGraw Hill Publishing Process…. 29
  • 30. Comparison of modes…… Reverse Logistics • Movement of goods from the market or customer back to the company • The need: – – – – Increased awareness of the environment Stringent legislation For some it is part of the business Profitability of dealing with scrap, surplus • Surplus, obsolescence can result due to: – Over optimistic sales forecasts, change in product specs, errors in estimating material usage, losses in processing or overbuying based on incentives SDM – Ch 15 Tata McGraw Hill Publishing 30
  • 31. Advantages of Rail • Economy – more so for goods over long distances • Efficiency of energy • Reliability – not affected by weather conditions SDM – Ch 15 Tata McGraw Hill Publishing 31
  • 32. Disadvantages • Uneconomical for small shipments and short distances • Not suitable for remote stations • Costly terminal handling facilities • Inflexible time schedules Road transport….. SDM – Ch 15 Tata McGraw Hill Publishing 32
  • 33. Road Freight Advantages • Through movement – direct from consignor to consignee, no transshipment • Flexibility – routes and loading routines can be easily altered, operate day and night • Less capital costs – for own fleet + immunity from industrial action • Fast turn-around – if articulated units like tractors and trailers are used • Minimum delays SDM – Ch 15 Tata McGraw Hill Publishing 33
  • 34. Disadvantages • Susceptibility to weather and road conditions – in spite of the best protection • Unsuitability for heavy loads – rail transport more economical for bulk loads • Unsuitability for long distances – again the rail telescopic rates are more favourable Air transport…. SDM – Ch 15 Tata McGraw Hill Publishing 34
  • 35. Air Transport Advantages • • • • • Faster mode Reduction in cost particularly inventory Broad service range Increasing capabilities Disadvantages: – High cost – Weather affects flight conditions – Limitations on heavy consignments SDM – Ch 15 Tata McGraw Hill Publishing Water transport…… 35
  • 36. Water Transport • Advantages: – Mass movement of bulk – Lowest freight cost – Preferred for long haul of low value commodities • Disadvantages: – Not for quick transit – Suitable for certain types on commodities only Pipeline…. SDM – Ch 15 Tata McGraw Hill Publishing 36