UNIT-1

INTRODUCTION

Fierce competition in today’s market has forced business enterprises to invest in and focus on supply chains. The growth in telecommunication and transportation technologies has led to further growth of the supply chain. The supply chain, also known as the logistics network, consists of suppliers, manufacturing centers, warehouses, distribution centers and retail outlets, as well as raw materials, work-in-process inventory and finished products that flow between the facilities.

The logistics management takes into consideration every facility that has an impact on cost. It plays an important role in making the product conform to customer requirements. Also it involves efficient integration of suppliers, manufacturers, warehouses and stores and encompasses the firms’ activities at many levels, from the strategic level through the tactical to the operational level.

Logistics is a challenging and important activity because it serves as an integrating or boundary spanning function. It links suppliers with customers and it integrates functional entities across a company. With the ever-growing competition in today’s market place it becomes necessary for a firm to use its resources to focus on strategic opportunities. This includes several internal factors like management style, culture, human resources, facilities and several external factors like technology, globalization and competition. This is where the concept of logistics plays a major role, i.e. it helps to leverage certain advantages the firm has in the marketplace.

DEFINITION OF LOGISTICS MANAGEMENT

The term logistic management is process of planning, implementing and controlling the effective and efficient flow of storing goods and services and related information from the point origin to point conception. for the purpose of conforming to customer requirement.

THE WORK OF THE LOGISTICS MANAGEMENT

1. customer services 2. demand forecasting3. distributing communication4. inventory controlling 5. material handling 6. order of processing

7. affect sales person and services and supply 8. plant and where house location 9. procurement 10. packaging 11. retained goods handling 12. revers logistics 13. traffic and transportation 14. warehousing and storing 15. transporting 16. facilities of the customers

LOGISTICS MANAGEMENT NET WORK DESIGN

Logistics Network Design

A robust network is the basis for all supply chain improvements

Historically grown structures, mergers, acquisitions, as well as evolving customer needs require periodic optimization of the distribution network. Costs for transport and warehousing need to be balanced whilst taking into account the availability of goods and agreed service levels. Often when starting out heterogeneous cost structures, undefined service levels and non-transparent flow of goods need to be understood and standardized.

Camelot supports you in creating transparency and designing and developing an intelligent distribution network. We provide you with support through our proven, structured approach, best practices and specialized software for network simulations:

Use our network simulation software to optimize the number of warehouse locations while taking into consideration transport costs

Selection of the optimal warehouse locations Excellence and transparency of processes for all areas, including

customs and foreign trade Make-or-buy assessment Partner selection using tenders Implementation management Quality management and business intelligence cockpit

Our logistics experts guarantee efficient and robust solutions and will support you with design and implementation.

The primary drivers of logistics network design are requirements resulting from integrated procurement, manufacturing, and customer relationship management strategies. Within the framework of these interlocking strategies, integrated logistics requirements are satisfied by achieving total cost and service trade-offs. These capabilities play out across a network of enterprise facilities. Important to the performance of logistics requirements are warehouses. Warehouses are justified in logistical system design as a result of their contribution to cost reduction, service improvement, or a combination of both.

Transportation and inventory economics are critical network design considerations. In the least-total-cost equation, transportation reflects the spatial aspects of logistics. The ability to consolidate transportation is a primary justification for including warehouses in a network design. Inventory introduces the temporal dimension of logistics. Average inventory increases as the number of warehouses in a system increase in a stable demand situation. Total cost integration provides a framework for simultaneous integration of logistics, manufacturing, and procurement costs. Thus, total cost analysis provides the methodology for logistical network integration.

Accurate total cost analysis is not without practical problems. Foremost is the fact that a great many important costs are not specifically measured or reported by standard accounting systems. A second problem involved in total cost analysis is the need to consider a wide variety of network design alternatives. To develop complete analysis of a planning situation, alternative shipment sizes, modes of shipment, and range of available warehouse locations must be considered.

These problems can be overcome if care is taken in network analysis. The cost format recommended for total cost analysis is to group all functional costs associated with

inventory and transportation. The significant contribution of total cost integration is that it provides a simultaneous analysis of time- and space-impacted costs involved in logistical network design.

The formulation of a logistical strategy requires that total cost analysis be evaluated in terms of customer service performance. Logistical service is measured in terms of availability, capability, and quality of performance. The ultimate realization of each service attribute is directly related to logistical network design. To realize the highest level of logistical operational support within overall enterprise integration, in theory each customer should be provided service to the point where marginal cost equates to marginal revenue. Such marginal equalization is not practical to achieve; however, the relationship serves as a normative planning goal.

The formulation of a service policy starts from the identification and analysis of the least-total-cost-system design. Given a managerially specified inventory availability target, service capability associated with the least-cost design can be quantified. This initial service level is referred to as the threshold service level. To evaluate potential modifications to the least-cost design, sensitivity analysis is used. Service levels may be improved by modifying (1) variation in the number of facilities, (2) change in one or more aspects of the performance cycle, and/or (3) change in safety stock.

LOGISTICS & TRANSPORTATION

While a global supply chain enables companies to leverage lower cost manufacturing, there are significant challenges imposed on transportation managers in ensuring products delivered over long distances arrive on time and are distributed to the right locations. Transportation costs are typically 5-6% of a company’s revenue and a major contributor to overall product costs. Better transportation management helps companies improve their overall supply chain efficiency.The longer lead times with global suppliers, volatile fuel prices and risks such as unavoidable delays, make estimating the cost and time associated with transportation difficult. As a result, companies incur high expedite and inventory costs.To reduce transportation overheads and ensure that the right product reaches the right location on time, transportation managers require a centralized view into all of their

transportation activities as well as the ability to understand transportation’s impact on product inventory.Overcoming challenges in logistics and transportationA consolidated view into logistics and transportation within the supply chain is vital to understanding, managing and balancing supply and demand, Viewlocity Technologies solutions assist transportation managers with:

Managing long lead times and variabilityDue to the global nature of supply chains, companies have to deal with longer lead times and significant variability. Uncertainty in transportation often leads to higher inventory costs as companies buffer their stock. Products are also expedited when there might be alternate, cheaper ways to meet demand.

Viewlocity Technologies' solutions allow you to view the impact of disruptions on upstream or downstream activities as well as on inventory. These tools allow you to focus on high value, critical issues while leaving other, less critical problems to be automatically resolved within the system.

Monitoring and communicating changes in demandConsumer spending habits are more unpredictable than ever. A company needs to be able to communicate changes in demand signals to suppliers and transportation partners to effectively manage costs and inventories.

Logistics and transportation solutions from Viewlocity Technologies enable you to leverage existing investments that you and your partners have made in various systems and present an integrated and meaningful business picture. On-boarding partners can be managed easily, even if they have widely differing technological capabilities.

Increasing product marginsProper management and disposition of product returns can significantly impact product margins. Dynamic fuel costs also significantly impact overall transportation cost.

Companies are able manage all areas of logistics, including returns using Viewlocity Technologies' supply chain visibility and control solutions. Users are able to view the details of products on a shipment, down to a serial number and can analyze prior shipment data and better plan for anticipated carrier requirements.

When it comes to logistics and transportation management, ViewlocityTechnololgies has the solutions you need to ensure:

Reduced overall system inventory Reduced supply chain operating costs Reduced expedited freight costs Enablement of lean supply chain operations Increased operating efficiency

Inventory management The answer to the question of "what is inventory management" is: Inventory management is a collection of interdisciplinary processes that include a full circle from supply chain management to demand forecasting, through inventory control and including reverse logistics.

Inventory management starts and ends with supply chain management because many of the opportunities to improve efficiencies start with shortening order to receipt time without incurring additional cost. That said, the other stages of the inventory management cycle are no less important in attaining overall efficiency.

Given that inventory in all its forms generally represents one of the top three expense lines for nearly all companies, there is a universal need for applying the right discipline to each step in the process.

While in the perfect world, all inventory is consumed daily, we must operate businesses in a less than perfect environment. The challenge is: how close can you get to perfect before Just In Time inventory management becomes a little too late.

LOGISTICS MANAGEMENT WARE HOUSING

A bit broad, but the elements that make up the modern logistics industry continue to evolve as the breadth of value added services warehouse logistics providers often does. This expansion has been accelerated by three vital trends in the new economy: the general trend towards outsourcing, the previously unprecedented growth of e-commerce and the importance of the partnership aspect of the manufacturer/marketer – logistics provider relationship. It’s benefits include: reduced need for personnel, reduced transportation and distribution cost, improved customer service, improved cycle time, free-up Logistics call for an understanding of the total supply chain, the elements of which include inventories, packing, forwarding, freight, storage and handing. Logistics isresponsible for all the movement that takes place within the organization whether it is inbound logistics of incoming, raw materials or movement within the company or the physical distribution of finished goods, logistics encompasses all of these.

            Typical logistics framework mainly consists of Physical Supply, Internal Operations and Physical Distribution of goods and Services. To put it more simply, the material supply logistics starts from the base level of “generation of the demand”, through the “process of purchase” and “supply of material from the vendor” right through to “final acceptance” and “payments to the supplier” and “issue to the indenter” and has to be considered as a “one whole activity” with each stage having an impact on price/cost of material supply.            Logistics is, itself, a system; it is a network of related activities with the purpose of managing the orderly flow of material and personnel within the logistics channel.            Transport logistics and warehouse logistics are the most important divisions of logistics deeply connected with each other. The main target of any logistics company is not only providing any freight delivery and forwarding by any means of transport, but a wide range of warehouse services as well. As the cargo delivery is not always door to door, the transport and warehouse logistics provides the forwarding and control of freight; placing at customers disposal a real information about the status of execution, the order and the location of freight at any time.

EXTERNAL COVER WITH FUNCTIONAL CONTENT PACKAGING

Optimal packaging of a product is a critical factor in logistics. And the reason is clear: Without it, many logistics processes could not be performed at all or could be carried out only at great additional cost. The function of the packaging is not just to protect the product. It performs many other jobs as well. These include providing information about the contents as well as enabling and facilitating other logistics processes - including transport and handling as well as storage, order processing and warehousing.

MATERIAL HANDLING & LOGISTICS

Machines for transport packaging

1. Cardboard crate and tray forming machines2. Carton forming machines3. Casepacking - forming, filling, closing machines of

cardboard boxes4. Crating and crate-unloading machines5. Dampening machines to close cartons with gummed paper6. Depalletizers7. Heatshrink ovens for palletized loads8. Hooding - wrapping machines of palletized loads9. Nailing machines10. Pack-binding machines11. Palletizers12. Palletizers - by cartesian axes13. Palletizers - by fixed or mobile base14. Robots for palletization15. Strapping machines16. Systems for packaging with airbubble cushioning17. Systems for packaging with biodegradable cushions18. Systems for packaging with foam plastic shreds19. Systems for packaging with paper cushioning20. Systems for packaging with polyeurethane foam21. Taping machines22. Wraparound casepacking machines23. Wrapping machines for packaging grouped in bundles with

autoadhesive film

24. Wrapping machines for packaging grouped in bundles with heatshrink film

25. Wrapping machines for packaging grouped in bundles with sealable film

26. Wrapping machines for packaging grouped in bundles with stretch film

27. Wrapping machines for palletised loads in heatshrink film28. Wrapping machines for palletised loads in stretch film

INTERNAL HANDLING AND STOCKING - LOGISTICS

1. Accident prevention equipment (for handling)2. Air conveyor belts for bottles3. Automatic warehouses4. Belts for fastening, lashing, etc.5. Continuous conveyors and transporters6. Conveyor belts7. Conveyor belts (components for)8. Doors and leveling equipment9. Flooring and coverings for industrial usage10. Fork lift trucks11. Industrial doors12. Lifting devices13. Loading bays - dock levellers14. Logistics management systems15. Means for aerial working16. Means for automatic and robot handling (AGV, LGV, etc.)17. Mechanical conveyor belts for bottles18. Modular conveyor belts19. Pallet trucks20. Pallet turner21. Picking lines22. Shelf and alternative elevators for boxes and pallets23. Shelving for warehouses24. Slat conveyors25. Storage racks26. Storage systems27. Systems and plants for warehousing28. Systems for loads stability29. Tanks30. Thermal and electric trucks for transport and lifting31. Trolleys for manual movement

32. Vertical conveyor belts (continuous, beakers, etc.)

A TYPICAL ORGANIZATIONAL CHART EXAMPLES TO REPRESENT THE LOGISTICS ORGANIZATION STRUCTURE.

Logistics enterprise can have many organization structures, but the most typical logistics organizational structure consists of the shareholder, board of directors, the sales supervisor, logistics manager, customs supervisor, merchandiser supervisor, materials manager,  purchasing manager, trading manager, merchandiser manager, warehouse manager, distribution manager, customs specialist, documentation specialist, shipping specialist, courier , warehouse stock management and employees.

GOVERNMENT ROLE IN TRANSPORTATION

1] Government plays a very important and crucial role in the transportation business or system.

2] They provide basic infrastructure to the nation like roads, railway tracks, ports, container yards, cranes at ports, public warehouses etc.

3] Government is conducting an inspection, verification of goods and other storage by establishing customs authority.

4] However govt. can also charge a tax on the goods and services provided by distributer, They charged various taxes like octroi, road tax, other duties such as customs, export trade, excise tax, sales tax whether it is state or central, then VAT that is value added tax, service tax etc.

5] If someone is shirking or avoiding their taxes then the government should take decision to frame a procedure for the payment of that taxes and duties with the penalties for that person.

6] Government can give restriction or prohibitions regarding the carrying of goods and services in specific modes of transport like Inflammable products such as petrol, diesel etc.

7] Govt. is licensing the transporters and provides a commission. That is they permit the transporters to make trade on a law basis.

8] Government can fixed or charged the freight rates for the govt. vehicle or carrier like trains, buses etc.

The Government has announced a road policy and a set of guidelines for development of highways, including a series of measures to attract private investment in the sector, both foreign and domestic. Key initiatives in this sector include:

The government has permitted 100 per cent foreign equity (up to US$ 306 million) in construction and maintenance of roads, highways, tunnels etc. 

In order to share project risks, the government, through the National Highways Authority of India (NHAI), can acquire equity stakes up to 40 per cent in build-operate-transfer (BOT) projects. 

Promoters are permitted to charge toll tax on certain projects. These toll taxes are indexed to the wholesale price index. 

Road projects are entitled to corporate tax holidays for 10 years.  The government also facilitates investors with feasibility study, land acquisition, resettlement and rehabilitation, etc. 

Earlier, most of the private sector investments were through the build-operate-transfer schemes. Now many of the recent projects are being bid on a toll collection system to finance the project. This new scheme has generated considerable interest among private investors and operators.The Government of India has studied various strategies adopted by ports world-wide to address similar issues facing ports in India. The government envisages commercialization/ privatization/ modernization of major existing ports. These are expected to result in technological upgrades and overall improvement of performance levels, of the ports. 

Today the Government of India has recognized the need for privatizing the national carriers although the procedure for this is yet to be decided. Recently, changes have been made in the Airports Authority of India Act in order to permit the privatization of the two Metro airports of Delhi and Mumbai. The Government has also taken an important step in setting-up a high-powered Committee, whose task is to examine the inconsistencies in the aviation sector and make recommendations for its rapid improvement. This document takes into account these positive developments and examines

important questions often raised in the context of improving civil aviation in India