1 logistics- overview a
DESCRIPTION
Logistics 5th SemesterNotes for lecturesTRANSCRIPT
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Elements of Logistical Management
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What is logistical Management?
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A Function Of Business Management
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Business & Business Management
What are business functions?
• What is function?
• What is activity?
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Logistical Management
• Ensuring availability of resources at minimum cost for production
• Ensuring availability of finished products at minimum cost to the
customer
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Definition of Logistics as a function of management
Logistics is the process of strategically managing procurement and storage of material , part and
finished inventory [and related information flow] through organization and its marketing
channels in such a way that current and future profits are maximized through cost effective
fulfillment of order
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What is the most accessible production process known to you?
Production and Logistics
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How Logistics is visualized?
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C AS
H
I N V E N T O R Y
I N F O R M A T I O N
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Receiving stores
V1 V2
Operation
Finished Goods Stores
W1 W2 W3
R1 R2 R3 R4 R5
V3
V5
V4
R6
Market
Procurement cycle
Manufacturing Support cycle
Distribution cycle
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What are logistical functions?
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Inventory Management Neither stock-out nor stockpiling
Inventory policies, models, systems
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Information management* Fast & accurate information in real time
in competitive business supported by Information technology
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Transportation * The most visible of all elements
* High contributor to costs of logistics- Movement costs, Preservation costs, Cost of
idle asset, Administration costs
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Net work analysis # Number of facilities, their location,
communication systems, operational decisions
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Warehousing* Switching facility rather than a storage facility that provides economic & service
benefits
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forklift_1.jpg
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Material handling * Receiving, moving, storing, dispatching
activities* Impact on cost [capital as well as running]
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Packaging* Types of packaging- consumer packaging and
industrial packaging
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Genesis of modern logistics • Military planning
• OR techniques like VA, PERT, CPM etc. • “Battles are won or lost even before they are
fought……….”Field Marshall RommelSome logistical feats in history:
• Indians in the Gulf countries – 1991• 1776 American war of Independence [4th
July1776]
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BERLIN AIRLIFT- 1945
In total, 1,534 tons of provisions were needed daily to keep the over 2 million people alive.
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OPERATION OVERLORD – NORMANDY BEACH
II World War-1945
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What Causes Bad Logistics?
• Infrastructure: bad roads, inefficient railways, poor communication lines, congestion in ports
• Taxation: e.g. Octroi• Information: Inadequate information, bad
communication • Management: Bad management decisions [carrier
selection, out sourcing etc.] What Does Bad Logistics Cause?
• Costly products, shortages• Deteriorating economy
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Importance of Logistics
Why should we learn logistics? Why is logistics important for management
students?1. Logistics is the bed rock of trade and business
2. Leads to customer satisfaction, D & F expectations of customers
3. Integrates logistical activities4. Competitive edge in a commodities market
5. Logistics wins or loses wars6. Supports critical functions like operations and
marketing to be JUST IN TIME to the customer
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Importance of Logistics
7. Logistical costs are 5% to 35% of sales depending on type of business, geographical
areas of operation etc.8. Crucial to survival and prosperity in global
business9. Logistics experts are moving up in Corporate
Ladder10. Leads to the concept of supply chain
management11. Indian market is changing- shift from seller’s
market to buyer’s market
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12. Changing customer13. Competition, internal & external
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1. Rapid response Ability to respond rapidly to customer’s order
• Short lead-times• High flexibility
• Real time information• Concepts of SMED and Kanban
Operating Objectives Of Logistics
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2. Minimum variance• Any event that disturbs flow of supplies to
customer is variance• Interrupts product delivery
• Undermines OTD Objective• Problems in information flow, traffic snarls, acts
of god, wrong dispatches, transit damage• How to maintain smooth, undisturbed flow of
supplies to customer?Traditional approach – Inventory
Modern approach – Minimum Variance
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3. Minimum inventory• Low inventory volume by high inventory turns
• Kanban as an inventory control tool • Single piece flow as practiced by JIT
companies
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4. Movement consolidation Movement planning to reduce costs
• Bulk volume, same product or collection• Long runs, eliminating broken short runs • Integrating interests of several players in
business
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5. Quality Quality of logistics performance - complete fulfillment of order, product, place, time and
quantity
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6. Life cycle support [cradle to cradle logistical support to product]• After sales service• Reverse logistics
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• Reverse logistics Rigid quality standards
Transit damage Product expiration dating
Product recall Law against unscientific disposal Law making recycling mandatory
Erroneous order processing by supplier Reuse of packaging material
• What are the drivers of reverse logistics?