LOGISTICS MANAGEMENT & PHYSICAL DISTRIBUTIONLogistics management is the process of

managing the movement and storage of materials ,parts and finished inventory from supplier through the firm and to customers.

It involves 1.physical supply or material management which involves movement of raw materials to plant and 2.physical distribution ,flow of finished products from the plants to the customers.

TYPES OF LOGISTICSSUPPLIER LOGISTICS-It takes care of the

flow of supplies and raw materials from vendor to the company.

It includes 1.supplier evaluation ,2.ordering of the final product.

PRODUCTION/CORPORATE LOGISTICS-It integrates production ,sales , logistics, and after sales service.

Replenishment production system-tracks outgoing shipments ,inventory movements , generates market demand and production plan .

Purchase support system-consisting of ordering and payment system to prevent shortages and fulfill customer needs.

CUSTOMER LOGISTICS-It is a process of Right quantity, of the Right product, to the Right place, in the Right conditions , at the Right costs , and at the Right time , with the Right impression.

speedy and timely delivery ,low distribution costs , shorter lead time , safety of goods

PHYSICAL DISTRIBUTIONRefers to the movement of goods from

producers to customers. It involvesOrder processingInventory managementMaterials handlingWarehousingtransportation

PHYSICAL DISTRIBUTION AND MARKETING MIXPROMOTION-To make product available

during promotion to meet demand/reduce distribution to build image of exclusivity.

PRICE-Lowering distribution cost to increase profits.

PRODUCT-Attributes affecting it are weight , size, value, packaging ,delivery schedules

OBJECTIVES OF PDSTOTAL COST GOALS- Minimize transportation

, storage ,material handling, cost of lost sales.

CUSTOMER SERVICE GOALS-TIMEDEPENDABILITYCOMMUNICATIONCONVENIENCEPRODUCT PROTECTIONACCURACY

FUNCTIONAL AREAS OF PDSNETWORK DESIGN-No and location of

facilities to perform physical distribution.INFORMATION TECHNOLOGY-Used in sales

forecasting and order processing.TRANSPORTATION –Speed/costINVENTORY MANAGEMENT- EOQWAREHOUSING-PRIVATE/LEASED/PUBLIC

CONTD…MATERIAL HANDLING EQUIPMENTS- MECHANIZED/SEMI

AUTOMATIC/AUTOMATIC(ROBOTICS) SECONDARY

PACKAGING-HANDLING/STORAGE /PROTECTION FROM LOSS OR DAMAGE

MAJOR COST ELEMENTS OF PDSTransportation costs-railway costs , road

way costs , sea way costs, airway costsInventory costs-ordering & carrying costsWarehouse costs-cost of land , building,

administrative costMaterial costs-material handling

equipments , cost of damagesPackaging costs-Customer service costs-trade off between

lost sales & inventory carrying costs