Implementing logistics

strategy
 What is Logistics?
Logistics is 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.“

Council of Logistics Management

 Is it different from 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.”
(Stanford Supply Chain Forum)

So, Logistics and Supply Chain are equivalent terms.

 A List of Approaches in Log. Man.

• Just in Time Inventory • Build to Order

• Vendor Managed Inventory • SC Visibility Software
• Quick Response • Internet / EDI
• Collaborative Planning, • Collaborative Transportation
Forecasting, and Management
Replenishment • Auctions / Exchanges
• Outsourcing / 3PLs • Merge - In - Transit
• Cross-docking / Flow Through • Partnerships / Alliances
Centers
 Vehicle Logistics
Vehicle logistics services include:

– Vehicle Transportation

– Marine Transportation (RO-RO)

– Ship Loading and Unloading

– Storage and Parking Lot Services

– Dealer Distributions

– Information Systems and Reporting

 Vehicle Logistics …
Special transportation services
are:

Inter-dealer transportation,

Fair exhibitions,

Sports competitions,

Collection vehicles
 Vehicle Logistics …
During the placement of
vehicles on to the ship;

Minimum parking distances,

Installation of the safety

equipment

should be realized.
 Vehicle Logistics …
Storage and Parking Lot Services:

- Transfer to addressed area,

- Transfer to the dispatch area,

- Transfer of the out of order

vehicles to the service area,

- Transfer from the service area to

the addressed area
 Supply Chain Planning Processes
Demand Forecasting
Material Requirement Planning Demand Planning

Component Production
Requirement Plan

Supplier Plant Warehouse Logistics Retailer

Order Management
Software Packages

i2 Six: A comprehensive solution suite for spend/

production/ revenue/ logistics/ fulfillment optimization

Solution suites for network design & optimization/

manufacturing planning & scheduling/ global logistics
management/ service & parts management

JD EDWARD: The advanced planning software

to synchronize demand & planning/ network
Optimization/ production & distribution planning
Software Packages

ARIBA Spend Management: It helps

companies driving down enterprise wide spend

mySAP SCM: A complete supply chain

planning solution

iBann: A complete solution suite from demand

collaboration to order management
 Results

 Reduced inventory levels by 10-15%

 Reduced markdown & scrap by 10-15%

 Used resources10-20% more efficiently Companies that

utilized best-in-
 Improved delivery reliability by 95-95% class SCM solutions
have
 Reduced outages to 0-5%

 Reduced cycle time by 10-20%

 Reduced transportation cost by 10-15%

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Logistics
Logistics

• Involves entire supply chain

• Increasing importance of logistics
– effective logistics is becoming a key to winning and
keeping customers.
– logistics is a major cost element for most companies.
– the explosion in product variety has created a need
for improved logistics management.
– information technology has created opportunities for
major gains in distribution efficiency.
Goals
Goals of
of Logistics
Logistics system
system
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• Provide a Targeted Level of Customer Service at

the Least Cost.
• Maximize Profits, Not Sales.

Higher Distribution Costs/

Higher Customer Service
Levels

Lower Distribution Costs/

Lower Customer Service Levels
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Logistics
Logistics Functions
Functions

• Order Processing
• Warehousing
• Inventory Management
• Transportation

• Design system to minimize costs of attaining

objectives
 12-16
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Transportation
Transportation Modes
Modes
Rail
Rail
Nation’s
Nation’slargest
largestcarrier,
carrier,cost-effective
cost-effective
for
forshipping
shippingbulk
bulkproducts,
products,piggyback
piggyback
Truck
Truck
Flexible
Flexiblein
inrouting
routing&&time
timeschedules,
schedules,efficient
efficient
for
forshort-hauls
short-haulsof
ofhigh
highvalue
valuegoods
goods
Water
Water
Low
Lowcost
costfor
forshipping
shippingbulky,
bulky,low-value
low-value
goods,
goods,slowest
slowestform
form
Pipeline
Pipeline
Ship
Shippetroleum,
petroleum,natural
naturalgas,
gas,and
andchemicals
chemicals
from
fromsources
sourcesto
tomarkets
markets
Air
Air
High
Highcost,
cost,ideal
idealwhen
whenspeed
speedis
isneeded
neededor
orto
to
ship
shiphigh-value,
high-value,low-bulk
low-bulkitems
items
12-17
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