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logisticmanagement-160904180814.pptx
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- 2. WHAT IS LOGISTICS? Logisticsis the . . . “process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.”
- 3. • Logistics isbasically a process of transporting goods (either raw material or finished products) from one point to another point. The two major functions of logistics are transportation and warehousing • The operations include planning, implementing, and maintaining the transportation and storage of goods that include service as well as information of the initial point and the endpoint. (Easy to understand, right?) • Basically, it is an activity that comes under the supply chain system. If a person works in the field of logistics management, then we can call him a logistician.
- 4. IS IT DIFFERENTFROM SCM? Not really! “Supply Chain Management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers.” So, Logistics and Supply Chain are equivalent terms.
- 5. LOGISTICS FUNCTIONS • Purchasing/ Procurement • Inventory Control • Warehousing • Materials Handling • Facility Location / Network Design • Transportation • Customer Service • Order Processing
- 6. VISUAL REPRESENTATION OFINTEGRATED LOGISTICS MANAGEMENT Supplier Supplier Transport Delivery Consolidation Warehouse Manufacturing StageI Manufacturing StageN Manufacturing StageII Finished Goods Localdelivery Finished Goods Storage RawMaterials Source Wholesaler Retailer Retailer Transport RawMaterials Source Localdelivery Material Handling Rawmaterials or PartsStorage Customers Warehouse Manufcaturing NStages Material Handling Delivery INBOUND LOGISTICS INTERNAL LOGISTICS OUTBOUND LOGISTICS Material Flow Information Flow Note: Transport Transport Material Handling
- 7. NATURE AND CONCEPTS •Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers (frequently, and originally, military organizations). • Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, and packaging, and occasionally security. Logistics is a channel of the supply chain which adds the value of time and place utility. • Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software
- 8. TYPES OF LOGISTICS A.Inbound Logistics B. Outbound Logistics C. Third Party Logistics D. Fourth Party Logistics E. Reverse Logistics
- 9. A. INBOUND LOGISTICS •Inbound logistics refers to the transport, storage and delivery of goods coming into a business. Outbound logistics refers to the same for goods going out of a business.
- 10. • Sourcing andvendor selection for supply of raw materials and manufacturing parts • Inbound transportation and procurement planning • Raw materials warehousing including consolidation warehousing • Management of Inventory • Information system for effective support strategic alliances with the supplies and transporters
- 11. B. OUTBOUND LOGISTICS •Outbound logistics refers to the same for goods going out of a business. Inbound and outbound logistics combine within the field of supply-chain management, as managers seek to maximize the reliability and efficiency of distribution networks while minimizing transport and storage costs.
- 12. • Outbound logisticssystem is concerned with the flow of finished products from factory warehouse to the customers through a distribution network comprising: • The wholesalers • Distributors • Retailers • Regional warehouses • Transporters • The inventory at all levels • Sales order processing • Sales return processing • Accounts receivable realization and • Counter flow of information from the customers to the factory
- 13. C. THIRD PARTYLOGISTICS • A 3PL (third-party logistics) is a provider of outsourced logistics services. Logistic services encompass anything that involves management of the way resources are moved to the areas where they are required. The term comes from the military.
- 14. D. FOURTH PARTYLOGISTICS • This evolution in supply chain outsourcing is Fourth-party Logistics or 4PL.A 4PL provider is a supply chain integrator. The 4PL assembles and manages all resources, capabilities and technology of an organization's Supply Chain and its array of providers.
- 15. 2 PL 3 PL 4PL 1 PL System Integration Multiple Single S e r v i c e O f f i c e r High Low Level of International Cross linking
- 16. E. REVERSE LOGISTICS •Reverse logistics is for all operations related to the reuse of products and materials. It is "the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.
- 17. MAJOR FEATURES OFFOR LOGISTICS MANAGEMENT • Smooth flow of all types of goods such as raw mareials, work-in- process and finished goods • Meeting customer expectations about product and related information requirements • Real time flow of information about products’ demand and availability • Delivery of quality product in required quantity without excessive safety stock • Best possible customer service at the least possible cost • Integration of various managerial functions for optimization of resources • Movement and storage of goods in appropriate quantity • Enhancement of productivity and profitability
- 18. CROSS DOCKING Cross dockingis a logistics procedure where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time
- 19. INTEGRATED LOGISTICS MANAGEMENT •Integrated Logistics is viewed as a method to create a sustainable competitive advantage over the company's competition • Logistics strategy must be integrated with corporate strategy because corporate strategy sets the basic requirement to the Logistics system of a strategy
- 20. • The logicsprocess is becoming more demanding and complex, so is the business environment in which the logistics has to operate • Highlights seven critical factors including that are contributing to the complexity of logistics system operations • Escalating customer demand • Cycle time reduction • Globalization • Restructuring • Supply Chain Partnerships • Productivity pressures and • Environmental awareness
- 21. STRATEGIC LOGISTICS PLANNING • Strategiclogistics planning is essentially concerned with the deployment and management of logistics resources to met the desired cost effective service performance of the system • This may involve, number and location of warehouses, mode and carrier selection, Inventory positioning, inventory planning, sub contracting of services, sourcing, equipment and facilities planning, order management and Information systems planning etc.
- 22. • This isalso includes such decisions as location and capacities of company owned plants and warehouses, acquisition or long term hiring of carriers like ships barges, trucks etc, acquisition of martial handling system and facilities, balancing facilities to maximize throughput and flexibility and introduction of system to help, reductions in response time and in process inventory • Choice of supply, transport mode, strategic alliance with both suppliers and customers also form parts of these strategic logistics planning process.
- 23. • The processof strategically managing the acquisition, movement and storage of materials, parts, finished goods inventory, and related information flows through the organization and its marketing channel in such a way that current and future profitability is maximized through the cost-effective fulfillment of orders.
- 24. MAIN OBJECTIVES OFLOGISTICS PLANNING ARE: • Cost reduction: - This strategy is directed towards minimizing the variable costs associated with the movement and storage. The best strategy is to evaluate the alternative courses of action and select the optimum one keeping profit maximization as the prime goal in mind. • Capital reduction: - This strategy is directed towards minimizing the level of investment in the logistics system. • Service improvements: - This strategy recognizes that the revenue is a function of the logistics service provided and develops an effective service strategy that is different from the one provided by competitors
- 25. ISSUES FOR GLOBALLOGISTICS • Movement of product • The flow of information • Time /Service • Cost competitiveness • Integration • Different culture
- 26. MAIN FEATURES OFLOGISTICS • A fragmented logistics • Optimization of physical operations • Economical perspectives • Skills & dimensions
- 28. The mission oflogistics management • The mission is to plan and coordinate all those activities necessary to achieve desired levels of delivered service and quality at lowest possible cost. Logistics must therefore be seen as the link between the marketplace and the operating activity of the business. The scope of the logistics spans the organization, from the management of raw materials through to the delivery of the final product.
- 29. The marketing andlogistics interface • Interface between Logistics Marketing– The connection between marketing and logistics management, logistics concerns the market marketing, marketing facilitator logistics, in series to achieve marketing, satisfy customer demand, promote effectively, obtain the product value to support customer loyalty and so on all necessary to be resolved, logistics and marketing for the logistics management plan and marketing strategy implementation of the great role in promoting.
- 30. • Marketing isthe practice of understanding what customers need and then communicating how the company can achieve those needs. • While advertising, social networking and product packaging design are all part of marketing, so is the analysis of sales and response data to figure out what customers like and want so that the outgoing messages can be adjusted. • Logistics and marketing are normally concerned with entertaining the customers’ needs and wants, respectively by their supply and demand purposes in a marketing channel. • The interface between logistics and marketing is perilous to the delivery of customer service. The major goal of conflict for logistics and marketing interface is related to 5Ps (product, price, place, promotion, and packaging) of marketing. • Without the successful link of logistics and marketing, the firm may be unable to provide good customer services, resulting in dissatisfied customers or a lost sale. • For organizations to be successful in delivering higher customer value, logistics and marketing functions must be integrated because the right product must be at the right price, advertised through proper promotions, provided in the right packaging, and must be available at the right place.
- 31. Customer service • Logisticsis a crucial component in the efficiency of many companies. Without a good logistics plan as part of your supply chain, then getting goods to markets – or receiving raw goods – becomes a difficult task. But in order for logistics activities to operate smoothly, there is another crucial component to be considered: customer service. • Without a good level of communication and an efficient level of customer service, then any logistics chain will not operate as well as it should. Providing good customer service and communications as part of your logistics services is essential to success.
- 32. • Communicate Quicklyand Thoroughly to Build Trust • Communication and trust go hand-in-hand. When a client sees that you communicate all information quickly, even when it may be bad news, then they will realize that they can trust you in every aspect of your relationship. • Updating clients at different stages of their logistics experience means they know your company is thorough. While advising a client of a delay may seem like a negative, it is also good business practice as it enables them to make any adjustments to their own schedules. Whether dealing with inbound logistics or outbound logistics, good channels of communication must be a constant factor. • Speed • Speed is not just about how quickly you deliver goods. It is also about how quickly you respond to customer inquiries. In the modern logistics industry, it’s not just about how fast you deliver shipments, but about how fast you deliver information. • Consistency • Consistency has to be present in how you communicate with customers. Always provide a customer with answers, even when you don’t have one
- 33. Customer service andcustomer retention • Logistics is an industry that is constantly moving and at quick speeds. They must adhere to tight deadlines and a high level of proficiency to keep up with demand. • In today's modern world, the logistics industry has become essential to our global economy. However, in a time where the competition is tough, logistics companies have to adapt quickly.
- 34. • Building CustomerLoyalty • Thanks to the growth of eCommerce, online shopping, and emerging small businesses, the logistics industry shows no sign of slowing, plus, consumers have now grown accustomed to specific standards when it comes to making purchases online. • Customer Satisfaction • Business owners understand the fundamental part of their business's success and growth is the customers. Part of that process is not just attracting them but keeping them returning for your product or service. • Fulfillment • Every industry has particular expectations from the customer that are unique to their offering. Logistics is no exception. Fulfillment management should be as streamlined and efficient as possible. From the purchase to delivery, every step in the process should consider the customer.
- 35. • Quick DeliveryTimes • The heart of logistics is rooted in how quickly products are delivered. Now, companies can offer next-day delivery, and in some cases same day. These offerings drive customers in their purchase decisions, with 45% of customers stating they are more likely to do business with a company that can provide these options. • Customer Support • In an industry such as this, you never want to underestimate the importance of customer support and communication. Without effective communication, no one would feel confident in the persons they are doing business with. In addition, customers want to contact someone at any time during the process, as they may have questions or need assistance.
- 36. • Ease ofUse • The process of placing an order, shipping, and returns should be carried out with as little hassle to the customer as possible. Returns impact overall customer satisfaction, with 96% saying it is a significant factor in purchasing decisions. However, it doesn't stop there; how people interact with your app or website also affects your customers' experience. A simple, straightforward interface and design can provide better functionality for its users. • Backend Operations that Aid in Retention • There are many contributing factors to how your customer will feel by the end of the transaction. The front end of logistics is essential; however, the back in is as important. Allowing your workflow and employees to perform at their best comes by putting systems into place that can be streamlined and enhance the company's overall efficiency. • Resolving Customer Issues • With all the care that goes into the process, mistakes can sometimes happen. Customers generally understand this fact; that is why how you handle each situation is critical. On the other hand, if a customer can have the problem quickly resolved and with little effort, they may conclude that their experience was still satisfactory.
- 37. Service-driven logistics system Aneffective starting point for logistics system design is the marketplace, in other words, companies must fully understand the service needs of the various markets that they address and then seek to develop a low cost logistics solution. The ideal logistics strategies and systems should be devised in the following steps
- 38. IDENTIFYING CUSTOMER’S SERVICENEEDS:- It is important that no two customers will ever be exactly the same in terms of their service requirements. However it will often be the case that customers will fall into groups or “segments” which are characterized by a broad similarity of service needs. These groupings might be thought of as „service segments‟.
- 39. DEFINE CUSTOMER SERVICEOBJECTIVE AND PRIORITIES: The whole purpose of logistics strategy is to provide customers with the level and quality of service that they require and to do so at less cost to the total supply chain. The definition of appropriate service objectives is made easier if the concept of the perfect order is adopted. Perfect order is achieved only when each of those service needs meets the customer‟s satisfaction. One frequently encountered measure of the perfect order is „on- time, in- full, and error- free‟. In order to calculate the actual service level using the perfect order concept, performance on each element is to be monitored and then the percentage achievement on each element to be multiplied together. Customer service is usually measured in terms of: The level of availability, The speed and consistency of the customer‟s order cycle, and The communication that takes place between seller and customer.
- 40. DESIGN THE LOGISTICSSYSTEM: In the final step, ultimate designing the service driven logistics system takes place which is based on the identifying customer‟s service needs, customer service objectives, priorities, and their service standards. Designing the service driven logistics system boosts the morale of intermediaries and the interest of the customers as well due to concentrating on the service levels and thereby adding value at each stage.
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