Logistics involves planning, implementing, and controlling the efficient flow of raw materials, work-in-progress inventory, and finished goods from the origin to the point of consumption. It aims to meet customer requirements cost effectively. Logistics is a key enabler of supply chain management as it connects suppliers and customers and balances service and cost. Key aspects of logistics include transportation, warehousing, inventory management, packaging, and information systems.

1. Role of Logistics in
Supply Chain

2. What is Logistics?
•“The process of planning,
implementing and controlling
the efficient, cost effective flow
and storage of raw materials,
in-process inventory, finished
goods and related information
from point of origin to point of
consumption for the purpose
of conforming to customers’
requirements”.
•American Council of
Logistics Management

3. SUPPLY CHAIN MGMT
https://www.michiganstateuniversityonline.com/resources/supply-chain/is-logistics-
the-same-as-supply-chain-management/
Supply Chain Management, involves collaboration between firms to connect
suppliers, customers, and other partners as a means of boosting efficiency and
producing value for the end consumer.

4. What is
Logistics?
•Logistics management is primarily concerned with optimizing flows within
the organization, whilst supply chain management is concerned with
integration of flows from POI to POC and vice versa.
•Logistics is a supply chain enabler.
•It connects the source of supply with the source of demands.
•It bridges the gap between the market demands and the capabilities of supply
source.
•Strike a balance b/w service and cost.

5. Logistics Scope
• Responsiveness
Responsive supply chains can respond quickly to
changing consumer needs
• Reducing inventory burden
• Delivery reliability
• Service consistency
• Lowering freight cost
• Minimum transit damages

6. WAREHOUSING
Depot location, Storage system, Material handling,
Unitization and Packaging
TRANSPORTATION
Mode decision and Scheduling
INVENTORY
Service level planning and MRP
INFORMATION
Order processing and Demand forecasting
PACKAGING
Ease in storage, transportation and material handling
Logistics Mix

7. WAREHOUSINGWarehousing is the process of storing goods which are to be
distributed later.
A warehouse is defined as any place which is used in the
accumulation of goods.
Its “a planned space for the efficient storage and handling
of goods and materials”.
Warehousing operation has 5 key processes in common
1. Receiving
2. Put-away
3. Picking
4. Packing
5. Shipping
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8. Types of
Warehouses
1. Private Warehouses
•These are generally owned by the
manufacturers or traders or distributors
and are used to store exclusively owned
goods.
2. Public Warehouses
•These warehouses are for use by
general public and anyone can store
their goods in public warehouses by
paying very reasonable rent.
• These warehouses can be either
private or state owned.
•If a private company wants to start a
public warehouse, it has to obtain a
license from the government.

9. Cont..
3.Government warehouses
The government warehouses are
owned, managed and governed by
Central or State government.
They can be used by both private
companies and government
agencies for storage of goods.
They are therefore also considered
a form of public warehouses owned
by government.

10. TRANSPORTATION
• Transportation involves the physical
movement or flow of goods.
• The transportation system is the
physical link that connects
customers, raw material suppliers,
plants, warehouses, and channel
members.
• The basic modes of transportation
are water, rail, motor carrier, air, and
pipeline. Water is the slowest mode,
with rail, motor carrier, and air
following in order of speed of
delivery.
• The order is reversed when looking
at costs.

11. Components of Transportation Decisions
1.Design of Transportation Network
The transportation network is the collection of
transportation modes, locations, and routes along which
product can be shipped.
A company must decide whether transportation from a
supply source will be direct to the demand point or will go
through intermediate consolidation points.
Design decisions also include whether or not multiple
supply or demand points will be included in a single run.
2. Choice of Transportation Mode
The mode of transportation is the manner in which a
product is moved from one location in the supply chain
network to another

12. INVENTORY Management
• Inventory is the goods that a company
handles with the intention of selling.
• It might be in the format of raw materials or
WIP or Finished Goods
• Inventory management is a systematic
approach to sourcing, storing, and selling
inventory—both raw materials (components)
and finished goods (products)
https://www.youtube.com/watch?time_continue=
19&v=5TL80_8ACPc&feature=emb_logo

13. Types
•Finished
goods/for-sale goods:
The products you sell
to your customers
•Raw materials: The
inventory you use to
make your finished
goods
•Work-in-progress:
Essentially, unfinished
goods — inventory that
is part-way through the
manufacturing process

14. Cont..
•MRO goods: MRO stands for
maintenance, repair and operating
Goods. This is the inventory you use
to support the manufacturing process.
ex- Gloves, Safety equipment ,
Computers ,Industrial equipment
(valves, compressors, pumps),
Consumables (cleaning, laboratory,
and office supplies) , Plant upkeep
supplies (lubricants, gaskets, repair
tools)
https://www.grainger.com/
•Safety stock: The additional inventory kept in store to deal with
supplier shortages or surges in demand

15. Five main stages :
The inventory management process involves tracking and controlling
stock as it moves from your suppliers to your warehouse to your
customers.
There are five main stages to follow:
1.Purchasing: This can mean buying raw materials to turn into products,
or buying products to sell on with no assembly required.
2.Production: Making your finished product from its constituent parts.
Not every company will get involved in manufacturing — wholesalers,
for instance, might skip this step entirely

16. Cont..
3. Holding stock: Storing your raw materials before
they’re manufactured (if required), and your
finished goods before they’re sold
4. Sales: Getting your stock into customers’ hands,
and taking payment
5. Reporting: Businesses need to know how much
it is selling, and how much money it makes on
each sale

17. Common inventory Methods
1.Economic order quantity (EOQ) –
EOQ is the optimum number of products you should purchase to
minimize the total cost of ordering or holding stock.
2. Days inventory outstanding (DIO)
It refers to the number of days it takes for inventory to turn into
sales.
3. Reorder point
When is the right time to order more stock?
4. Safety stock
Acts as an emergency buffer .Always have enough safety stock to
meet demand, but not so much that increased carrying costs end up
straining your finances.

18. Information
1. Information consists of data and analysis concerning
facilities, inventory, transportation, costs, prices, and
customers throughout the supply chain.
2. Information is potentially the biggest driver of
performance in the supply chain because it directly
affects each of the other drivers
3. Information presents management with the
opportunity to make supply chains more responsive
and efficient.

19. Order processing
• Order processing includes receiving the order,
recording the order, filling the order, and
assembling all such orders for transportation, etc.
• It includes the activities of picking, packing and
delivery of the packaged items to a shipping
carrier.
• Order processing operations or facilities are
commonly called "distribution centers" or
"DC’s”.

20. Order processing Process
Order processing is a sequential process which includes
•Picking: consists in taking and collecting articles in a
specified quantity before shipment to satisfy customers'
orders.
•Sorting: process that separates items according to
destination.
•Pre-consolidation/ Package formation includes the
weighing , labeling and packing.
•Consolidation: Gathering packages into loading units for
transportation.

21. Packaging
Packaging is the process of wrapping that
focuses on protecting the product while it is being
shipped and stored.
Too much packaging increases costs while
inadequate protection can result in merchandise
damage and ultimately, customer dissatisfaction.

22. Logistics Chain

23. Logistics Chain
Inbound Logistics
Operation preceding manufacturing. This includes movement of
raw materials and components from supplier to the plant.
Process Logistics
Operations directly related to processing. This includes storage
and movement of raw materials and components within the
factory premises as per the manufacturing schedule.
Outbound Logistics
Operations following the manufacturing. This includes
warehousing, transportation and inventory management of
finished goods.

24. Customer Value Delivery
Chain
According to Michael Porter, businesses gain a competitive advantage edge
either by reducing their cost or by offering differentiated products and services
Cost can be reduced by effective logistics management
Differentiation can be enhanced through superior customer service

25. Logistics Integration

26. Logistics: Success Factors
• Close coordination with the suppliers
• Reduce the inventory levels
• Speed, reliability and consistency–inventory
movement
• Faster replenishment cycle
• Shorter performance cycle
• Flexible in the system
• Asset utilization and productivity
• Innovations in value additions in customer service