INTRODUCTION TO LOGISTICS AND LOGISTICS PLANNINGCollege: K.C CollegeSubject: Elements of Logistics and Supply Management

Group MembersMaria boltwala-6Aisha furniturewala-13Urvi panchal-27Disha Parmar-29Avinaash Dawra-70Taruna Manwani-71Jyoti solanki-72

IndexSr NoTopicsSign

1Introduction

2Objectives Of Logistics

3

Types of Logistics

4Function Of Logistics

5Why logistics matters

6Logistics Management

7Logistics Planning

8Bibliography

IntroductionThe word logistics is derived from the Greek word logistike, meaning science of computing and calculating. In ancient times logistics involved the practical art of moving armies engaged in combats. Since that time logistics has come to imply moving men and material on war footing to achieve desired results. The term logistics was first used by the military to describe the activities associated with maintaining a fighting force in the battle field and in its strictest sense, to describe the housing of troops. Logistics is concerned with getting the products and services when they are needed and when they are desired. Logistics is concerned with the organization, movement, and storage of material and people. It deals with the planning and control of the flow of materials and related information in organizations. Its main objective is to get the right materials to the right place at the right time while optimizing the total operational costs of this process.It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. Over the years the meaning of the term logistics has gradually expanded to include business and service activities. The domain of logistics activities is to provide customers with the right goods in the right place at the right time. It ranges from providing the necessary subcomponents for manufacturing to having inventory on the shelf of the retailer to having the correct quantity and type of blood available for a surgical procedure in a hospital.Logistics is the management of the flow of resources between the point of origin and the point of consumption in order to meet some requirements. For example: Of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, equipment, liquids, and staff, as well as abstract items, such as time, information, particles, and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation. The major issue that logistics attempts to resolve is to decide how and when raw-materials, semi-finished, and finished goods should be acquired, moved, and stored. It is essentially a planning process and an information activity .So an integrative process that optimizes the flow of material and supplies through the organization and its operations to the customerA fundamental characteristic of logistics is its holistic, integrated view of all the activities that it encompasses. Therefore, while procurement, inventory management, transportation management, warehouse management, and distribution are all important components, logistics is primarily concerned with the integration of these activities to provide maximum value to the overarching system.The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible.LOGISTICS is defined as Time related positioning of resources The whole concept of logistics is based on 7 Rs (of customer service) which are: Right product Right quantity Right quality Right way Right time Right cost Right customerDEFINITIONS: The art of managing the flow of material and products from the source to user. The logistic system includes the total flow of material, from the acquisition of raw materials to the delivery of finished products to ultimate user. The process of strategically managing the movements and storage of materials, parts and finished inventory from suppliers between enterprise facilities to customers Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfillment of orders. Logistics is the art and science of management, engineering and technical activities concerned with requirements, design and supplying, maintaining resources to support objectives, plans and operations. Planning implementing and controlling the physical flow of material and finished goods from point of origin to point of use to meet customer`s need at a profit The branch ofmilitaryscience having to do withprocuring, maintaining and transporting material,personnel and facilities.

Objectives of logistics Rapid response Flexibility objective of an organization: Some companies measure this asresponse time to customers order. On an average how much time do we need to fulfill one particular type of customers order in a year? This is a measure of rapid response. Logistics should ensure that the supplier is able to respond to the change in the demand very fast. Entire production should change from traditional push system to pull system to facilitate rapid response. Instead of stocking, the goods and supplying on demand, orders are executed on shipment to shipment basis information Technology plays an important role here as an enabler. IT helps management in producing and delivering goods when the consumer needs them. This results into reducing of inventory and exposes all operational deficiencies. Now the management resolves these deficiencies and slashes down costs. [Concept of SMED and KANBAN as practiced by JIT companies in Japan or elsewhere]

Minimum varianceD-delivery objective of an organization, this can be measured as On Time Deliveryor OTD. If 100 deliveries are made in a month/quarter/year how many reached as per the commitment made to the customer? This percentage is OTD.Any event that disrupts a system is variance. Logistics operations are disrupted by events like delays due to obstacles in information flow, traffic snarls, acts of god, wrong dispatches, damage in transit. Traditional approach is to keep safety stocks and transport the goods by high cost mode. The cost of this approach is huge. Logistics is expected to minimize these events, thereby minimize and improve on Time Delivery. Minimum inventoryThis is component of cost objective of a company. Inventory is associated with a huge baggage of costs. It is termed as a necessary evil. Objective of minimum inventory is measured as Inventory Turns or Inventory Turnover Ratio. Americans call this measure as turn velocity. Logistics management reduces these turns without sacrificing customer satisfaction. Lower turns ensure effective utilization of assets devoted to stock. [Concept of single piece flow as practiced by JIT companies in Japan or elsewhere]. Logistical management should keep the overall well being of a company in view and fix a minimum inventory level without trying to minimize the inventory level as an isolated objective Movement consolidation Transportation is the biggest contributor to logistics cost. Transportation cost depends on product type, size, weight, distance to be transported etc. For transporting small shipments just in time [reduction in inventory costs] expensive transport modes are used which again tend to hike the costs. Movement consolidation is planning several such small shipments together [of different types of shipments] by integrating interests of several player s in the supply chain. Generally, large shipment size and long distances reduce transportation cost per unit. Movement consolidation shall result into reduction in transportation costs QualityIf the quality of product fails logistics will have to ship the product out of customers premises and repeat the logistics operation again. This adds to costs and customer dissatisfaction. Hence logistics should contribute to TQM initiative of management. In fact, commitment to TQM has made the management worldover wake up to the significance of logistics function. Logistics can play a significant role in total quality improvement by improving the quality of logistics performance continuously and continuallyTwo Main View Points of Logistics Inbound logisticsCreation of value in a conversion process heavily depends on availability of inputs on time. Making available these inputs on time at point of use at minimum cost is the essence of Inbound Logistics. All the activities of a procurement performance cycle come under the scope of Inbound Logistics.Scope of Inbound Logistics covers transportation during procurement operation, storage, handling if any and overall management of inventory of inputs. Several activities or tasks are required to facilitate an orderly flow of materials, parts or finished inventory into a Manufacturing complex. They are sourcing, order placement and expediting, transportation, receiving and storage. Overall, procurement operations are called inbound logistics. Inbound logistics have potential avenues for reducing systems costs.Delivery time, size of shipment, method of transport & value of products involved are different from those of physical distribution cycles. Normally delivery is large as a low cost transportation mode is chosen. As the value of inventory is low, size of shipment is large & transit inventory costs are low. Outbound LogisticsValue added goods are to be made Value added goods are to be made available in the market for customers to perceive value. Finished goods are to be distributed through the network of warehouses and supply lines to reach the consumer through retailers shops in the market. During conversion value is added to the raw materials and as a result value of the inventory in this case is very high unlike inputs. Now the size of shipment, modes , of transport and delivery time are different as compared to inputs. Activities of shipment, distribution performance cycle come under the scope of Outbound Logistic

Types of Logistics Return Logistics (Reverse Logistics):In order to increase the sales as well as the market share, many companies advertise that their goods will perform well over a period of time. The customer is, therefore, led to believe that in case he buys the product of that company, he is assured of satisfactory performance of the product. But at the same time, it is very much obvious that the company cannot assure the satisfactory performance of each and every of its product which is sold in the market. Few of the products sold may not perform as advertised over the specific period of time. Such products need to be brought back by the company to confirm good customer service. Multination Companies (MNCs) to protect their market image and to stall its competitors from grabbing its customers, recall immediately the defective or substandard product from the market. Product recall is a critical competency resulting from increasingly rigid quality standards product expiration dating responsibility for hazardous consequences The company has, therefore, to take into account the defective goods that would be returned while framing the total logistical system network and calculating the total cost of such a system of network. Incorporating the goods returned in the total logistical systems network and cost is called as Return Logistics. Return Logistics requirement also result from the increasing number of laws prohibiting random scrapping and disposal on one hand, while encouraging recycling of waste such as beverage containers, packaging materials, etc. The most significant aspect of return logistical operation is the need for maximum control when a potential health liability exists. E.g.: a contaminated drug in the market is extremely dangerous and the company has to recall all the stock of contaminated drug. Military LogisticsMilitary logistics is the art and science of planning and carrying out the movement and maintenance of military forces. In its most comprehensive sense, it is those aspects or military operations that deal with: Design, development, acquisition, storage, distribution, maintenance, evacuation, and disposition of material, evacuation, and hospitalization of personnel, acquisition or construction, maintenance, operation, and disposition of facilities. Third Party Logistics (3PL)3PL, Third Party Logistics describes businesses that provide one or many of a variety of logistics related services. Types of services would include public warehousing, contract warehousing, transportation management, distribution management, freight consolidation. A 3PL provider may take over all receiving, storage, value added, shipping, and transportation responsibilities for a client and conduct them in the 3PLs warehouse using the 3PLs equipment and employees or may manage one or all of these functions in the clients facility using the clients equipment, or anything combination of the above. 3PL can be defined as the Business of proposing physical distribution reforms to a client and undertaking comprehensive physical distribution services.Third party logistics (3PL), a new business model for physical distribution, originated inthe U.K. & became highly popular in U.S. in the 1990s. 3PL providers offer innovative alternatives to clients in the form of comprehensive logistics services. Because 3PL requires that providers have intimate access to the corporate strategy of their clients, relationships are based long term contracts as a rule The growing demand for 3PL can be attributed to both demand,& supply side factors. (1)faced with deregulation & growing competition, transport companies are seeking new business opportunities, & (2) clients are seeking to outsource their logistics operations cut costs & focus management resources on core businesses. Fourth Party LogisticsTraditionally, suppliers and big corporations have been meeting the demands by increased inventory, speedier transportation solutions posting on-site service engineers and many times employing a third party service provider. Today they need to meet increased levels of services due to e-procurement, complete supply visibility, virtual inventory management and requisite integrating technology. Now corporations are outsourcing their entire set of supply chain process from a singledesign, make and run integrated comprehensive supply chain solutions. This evolution in supply chain outsourcing is called Fourth Party Logistics the aim being to provide maximum overall benefit. Thus a fourth party logistics provider is a supply chain integrator that assembles and manages the resources, capabilities and technology of its own organization with those of complementary service provider to deliver a comprehensive supply chain solution. It leverages the competencies of third party logistics providers and business process managers to deliver a supply chain solution through a centralized point of contact. As the fourth party logistics provider caters to multiple clients, the investment is spread across clients-thus taking the advantage of economies of scale.

Function Of logistics Transportation management: Transportation enables the means of transfer of inventory given the location & network framework developed earlier. This involves the selecting the modes of transportation like Air, Water, Rail, Road & the decisions relating to outsourcing this activities to other agencies. Selection of the modes of transportation depends on the following factors: Speed & reliability loss& damage Inventories Freight rate Market competitiveness Company policy & customer influence External market influences. Inventory management: Inventory management concerns with the decision regarding the amount of type & material stored at various facility location. These decisions will be affected by the decision made under the function of facility location & transportation e.g.: the location of warehouse & retail outlets.& modes of transport whether fast or slow will affect the quantity type of material to be stored at facilities location. Warehousing management: Warehousing provide the adequate space for the inventory at the right location, unpack aging, sorting, & consolidation of material & modification of material elements if required .the role of warehouse provide the economic & service benefit to the logistical system Packaging: It helps in achieving the objective of maintaining the material in the right condition through the logistics process. Packaging decision is impacted by requirement of other activities like protection & facilitation during transportation, material handing & storage as so ultimately customer requirements.

Why Logistics Matters?In the past, logistics was considered a custodial activity. Storekeepers were the custodians of supplies stored in small storerooms and large warehouses. Consequently, the science (and art) of logistics, and the people who make the health logistics system work, were not considered an important part of family planning, HIV and AIDS, or vaccination programsto name only a few. Fortunately, as time passed, more and more program managers have come to understand how important logistics is to a programs success. he goal of a health logistics system is much larger than simply making sure a product gets where it needs to go. Ultimately, the goal of every public health logistics system is to help ensure that every customer has commodity security. Commodity security exists when every person is able to obtain and use qualityEssential health supplies whenever he or she needs them. A properly functioning supply chain is a critical part of ensuring commodity security financing, policies, and commitment is also necessary. Effective supply chains not only help ensure commodity security, they also help determine the success or failure of any public health program. Both in business and in the public sector, decision makers increasingly direct their attention to improving supply chains, because logistics improvements bring important, quantifiable benefits. Well-functioning supply chains benefit public health programs in important ways by increasing program impact enhancing quality of care improving cost effectiveness and efficiency.

Logistics increases program impactIf a logistics system provides a reliable supply of commodities, more people are likely to use health services. Customers feel more confident about the health program when they have a constant supply of commoditiesit motivates them to seek and use services. Figure 1-1 shows the impact of improved product availability.Notice that, as the availability of a mix of contraceptive methods improves, the contraceptive prevalence rate (CPR) for the public sector increases. When a choice of contraceptive methods is available in Health programs cannot succeed facilities, more women use contraception. When more unless the supply chain delivers a women use contraception, it impacts a number of key reliable, continuous supply of health public health indicators: maternal mortality, infant commodities to its customers. Mortality and total fertility rates all decrease. No product? No program!Logistics matters.

Logistics enhances quality of careWell-supplied health programs can provide superior service, while poorly supplied programs cannot.Likewise, well-supplied health workers can use their training and expertise fully, directly improving the quality of care for clients. Customers are not the only ones who benefit from the consistent availability of commodities. An effective logistics system helps provide adequate, appropriate supplies to health providers, increasing their professional satisfaction, motivation, and morale. Motivated staff are more likely to deliver a higher quality of service.Logistics matters.

Logistics improves cost efficiency and effectivenessAn effective supply chain contributes to improved cost effectiveness in all parts of a program, and it can stretch limited resources. Strengthening and maintaining the logistics system is an investment that pays of in three ways. (1) It reduces losses due to overstock, waste, expiry, damage, pilferage, and inefficiency;(2) It protects other major program investments; and (3) it maximizes the potential for cost recovery.

Importance of Logistics to a Company:Small business owners also conduct distribution logistics with inventory and warehousing. And, every small business owner can tell you about how they handle reverse logistics, with returned merchandise or refusal of services. Larger businesses may deal in all four logistic fields.In the business environment, logistics either have an internal or external focuses (inbound or outbound). Depending upon the business involved, this part of the chain can be simple or complicated. For more complicated procedures, third parties often are hired to conduct any one of the four fields within business logistics.Third-party logistics (3PL) involves using external individuals or organizations to execute logistics activities that have traditionally been performed within an organization itself. If, for example, a company decides to export its product, it may hire a person or organization to help with distribution logistics. Today, there is a movement toward buildingfourth-party logistics(4PL), which integrates 3PL competencies and other organizations to design, build, and run comprehensive supply chain solutions. A 4PL general contractor would manage other 3PLs, truckers, forwarders, custom house agents, and others, essentially taking responsibility of a complete process for the customer.Another specialty includeslogistics consulting services. Firms in this industry specialize in the production and distribution of goods, from the first stages of securing suppliers to the delivery of finished goods to consumers. Such firms give advice on improvements in the manufacturing process and productivity, product quality control, inventory management, packaging, order processing, the transportation of goods, and materials management and handling. In the process, these consulting firms might suggest improvements to the manufacturing process in order to use inputs better, increase productivity, or decrease the amount of excess inventory. Consulting firms in this segment of the industry also advise on the latest technology that links suppliers, producers, and customers together to streamline the manufacturing process.Evenproject managementrequires logistics, as one vein of this science coordinates a sequence of resources to carry out projects. Typical constraints in project management include scope, time, and budget, or the same constraints involved in business logistics. The time constraint refers to the amount of time available to complete a project.

Logistics ManagementLogistic management provides a major source of competitive advantage in other words a position of enduring superiority over competitors in terms of customer preference may be achieved through logistics. Logistics management encompasses all material flow management. From the inflow of purchase material into works material flow through manufacturing processes and material flow to customers logistic management covers both physical flow of products as well as information flows. It evolves procedures hat meet customer service at minimum cost. The cost reduction is achieved by speeding the flows of materials, work in process and finished products. Logistics managementis the part ofsupply chain managementthatplans,implements, andcontrolstheefficient,effective, forward, and reverse flow and storage ofgoods,services, and related informationbetween thepoint of originand thepoint of consumptionin order to meet customer's requirements. A professional working in the field of logistics management is called a logistician.1. Materials management2. Channel management3. Distribution (or physical distribution)4. Supply-chain managementThe Chartered Institute of Logistics and Transport (CILT), established in the United Kingdom in 1919, received a Royal Charter in 1926. The Chartered Institute is one of the professional bodies or institutions for the logistics and transport sectors that offers professional qualifications or degrees in logistics management.DEFINITION: The process of planning, implementing and controlling the efficient, effective flow and storage of goods a d services related information right from the point of origin to the point of consumption in order to satisfy customers requirement. Logistics management includes the design and administration of systems to control the flow of materials, work in progress and finished inventory to support business unit strategy

Automation softwareSoftware or cloud-based SaaS solutions are used for logistics automation which helps the supply chain industry in automating the workflow as well as management of the system. There is few generalized software available in the new market in the said topology. This is because there is no rule to generalize the system as well as work flow even though the practice is more or less the same. Most of the commercial companies do use one or the other of the custom solutions.But there are various software solutions that are being used within the departments of logistics. There are a few departments in Logistics, namely: Conventional Department, Container Department, Warehouse, Marine Engineering, Heavy Haulage, etc.Software used in these departments Conventional department: CVT software / CTMS software. Container Trucking: CTMS software Warehouse: WMS/WCSImproving Effectiveness of Logistics Management1. Logistical Network2. Information3. Transportation4. Sound Inventory ManagementLogistics Management in India in Todays ContextLogistics in Indian Business Environment Liberalization opens our door to competition. Global business has long supply & distribution lines. Changing Indian customer, aware, demanding and less brand loyal Competition ensures that product differentiation in terms of quality is difficult. Product life cycles are shrinking Our markets are shifting from sellers to buyers Many consumer products are moving into commodities market In India, large distances separate production and consumption centers. Essential commodities have to travel from Food Corporation Warehouses to consumers through PDS. Still Logistics performance in India has not been impressive Fruits and vegetables are grown at various places but do not enjoy access to market.LOGISTICS IN THE GLOBALISATIONLogistics functions are same domestically and globally but differ in four Ds i.e. distance, documents, diversity in culture and demand of customer. In the global logistics distances are longer, documentation is more extensive, customer demand varies to satisfy cultural differences within both, countries and regions. Developing strategies to respond to the 4 D environment is the global challenge for logistics management.There are some factors that facilitate globalization and necessitate global logistics and also some barriers that continue to impede global logistics. Logistics management must balance the cost of overcoming these barriers with the potential benefits of going goal

Logistics PlanningTheinternalproductioncapacityexpansionplansand also suppliers expansion plans are concurrently decided on the basis ofsales forecast. Outsourcing is given priority only after internal capacity is fully used. The money is already spent for internal capacity in from of plant machinery and persons the cost already gets added due to those expenses. So vendoring out should be considered only after the internal capacityisfullyusedup.Theextentoffuturelogistical activitiesisbasedonforecastscustomerordersand promotions.Thebudgetfortheinventoryhastobemadeplanfor efficient logisticaloperationsandt heplansfor Manufacturing and procuring theinventory items have tobe synchronizedthissynchronizingshouldbepreferablydone bydedicatedsoftwarededicatedSoftwareisavailablein MRP and MRP1 packages Theprocurementofmaterialsrequiredfor manufacturingand orderfulfillmentthelogisticsactivity flows outline the sequence of logistics Operations from order receipt through orderprocessingdistributionAnd dispatchingandtransportationtocustomerdeliverythis involves Inventory management activities in order to reconcile inventory availability based on prior planning and ordering for actual requirements.

Definition:Planning is the list of the activities to achieve a typical goal, which is fitting in the budgeted expenses and possible to achieve. The planning is the main function at each and every group in the company. At the top of company people have to device the mission for thecompany. They have toset a goal for the company. To achieve the goal of the company proper planning has to be doneLogistics planning processProper logistics planning entails considering logistical aspects throughout the various stages of the procurement process. It contributes to efficient procurement processes, and reduces the risk of incurring problems that may lead to additional costs and delay.Logistics planning starts at the needs assessment phase of procurement by considering the desired result of the requisitioned and the end-user and from there working backwards to determine what will lead to a successful completion of the activity. Ideally this process should begin even before the requisition is placed, through close cooperation and efficient communication between the operational unit requesting the purchase and procurement officers.Phase 1: Problem Definition and planning1. Feasibility Assessment Situational analysis(to provide senior management with the best understanding of the strengths and weaknesses of the existing capabilities and includes internal review, market assessment and competitive evaluation and Technology Assessment) Supporting logic development ( evaluates current procedures and practices and identifies areas with improvement potential and includes clear plans for potential redesign ) Cost benefit estimate ( Benefits should be categorized in terms of services improvements and cost reduction)2. Project Planning: Statement of objectives Statement of constraints Measurement standards (includes definitions of how cost components are calculated and also relevant customers service measures and method of calculation. Analysis procedures Project work plan (a project work plan must be determined and the resources and time required for competitions identified)

Phase 2: Data Collection and analysis1. Assumptions And Data collection: Define analysis approach and techniques (most common techniques are analytical, simulation and optimization) Define and review assumptions ( Includes Business assumptions; market consumer, and product trends and competitive actions, Management assumptions alternative distribution facilities, transport modes, logistics processes and fixed and variable costs and Analysis assumptions defines the constraints and limitations that must be included to fit the problem to the analysis technique) Identify data resources Collect Validation Data (The objective of validation is to increase management credibility regarding the analysis process and to ensure that the results of the analysis accurately reflects the reality. Comparison should focus on historical activity and expense levels)

2) Analysis Define analysis questions ( involves defining specific analysis questions concerning alternatives and the range of acceptable uncertainty) Complete and validate baseline analysis Complete alternative analysis Complete sensitivity analysis

Phase 3 Recommendations and Implementations1. Development of Recommendations Identify the best alternatives Evaluates Costs and Benefits Develop a Risk Appraisal Develop Presentation2. Implementation Define Implementation plan Schedule Implementation Define acceptance Criteria Implement

BibliographyInternet sources:WikipediaGoogle Search EngineLogistics Reference Books

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