1.
7 INTEGRATED LOGISTICS
Introduction:
Integrated logistics is a technique which utilises various source and
Channels to meet customer demand in time. Logistics is viewed as a
Competency that links an enterprise with its customers and suppliers.
Information from the customers flows in the form in the form of sales
Activity, forecasts and orders. Information is then translated into
Manufacturing and purchasing plans. Raw materials are procured and
Converted into finished products. Thus, the process is viewed in terms of two
Inter-related efforts, inventory flow and information flow.
The entire logistical process is viewed in terms of two inter- related
Activities. They are:-
a. Inventory Flow
b. Information Flow
a)Inventory Flow:-
1. The operations of logistics starts with a purchase of raw material
From supplier and ends when this raw material is converted into a
Finished Product sold to customers.
2)This raw material gets value at each stage of its development.
Stages of Inventory Flow:-
1. Procurement:- It basically involves purchase of raw material for
The finished product.
2. Manufacturing Support:- It basically involves performing
Various manufacturing activities and operations to convert raw
Material into a finished product.
3. Physical Distribution: It basically involves movement of
Finished goods towards the customers for utilization of value
Created.
b. Information Flow..
Logistical Information Flow involves two major types of flows:-
I )Planning and Co-ordination flows:-It provides information concerned with planned activities.
ii) Operations Flow:- It is needed to direct day to day activities.
Information flow is on both the directions. Information flows from
Customers in relation to their needs, wants, preferences, etc.
Information also flows within the various units of the organization
Such as manufacturing plant, warehouse, etc.
1.8 LOGISTICAL COMPETENCY
Introduction
1)The two main objectives of logistics are:
a) To minimise overall logistics costs.
b)To provide superior customer service.
2. But the problem is that if company attempts to provide superior
Customer service, then logistical cost will increase. In the same manner,
If the company attempts to reduce overall logistical costs, then customer
Service is not satisfactory.
3. Thus, a company has to maintain a proper balance between its two
Main objectives so as to provide superior customer service at a lower
Logistical cost. This is possible through a proper logistical competency.
4. Thus, logistical competency is the arms capability to provide superior
Customer service at lowest possible cost.
5. Its arms is to exploit logistical function to provide superior customer
Service at lowest cost in order to gain market share.
6. In a tour made by product from raw material stage (supplier) to the
Manufacturing firm, from manufacturing firm to the point of
Consumption such as transportation, warehousing, material handling,
Inventory management, etc are performed.
7. The WORK OF LOGISTICS is to co-ordinate functional areas like
La transportation, warehousing, material handling, etc into Network Design
To achieve logistical competency.
Devlopement to logistical competency
Market leader
State 4
Customer service
State 3
Market access
State 2
Gaining cost Effectiveness
State 1
SEVEN PILLARS / SEVEN PARAMETERS to achieve logistical competency.
1. Network Design: Logistical network includes various facilities such as
Manufacturing plants, warehouses, distribution centres and retail stores.
Logistical network analysis involves:
1)Determining which facilities are needed (Plants, warehouse,Distribution centres).
2)Determining how many of each type of facility. (number of plants,warehouses, distribution centres)
are needed.
3)Determining the geographical location of each facility.
4)Determining the work to be performed at each facility.
All this analysis of various facilities is known as Logistical Network
Analysis.
Proper network analysis will result in establishing an appropriate
Network design which will reduce overall logistical costs but yet provide
Superior customer service.
2. Information Management: Information Management is a invisible
Element in the process of logistical management. Information plays a
Crucial role in the process of logistics management. Demand
Forecasting and order processing are two areas of logistical work that
Depends on information. Timely information and accurate data are the
Key to the better logistical performance.
3. Transportation: Transportation refers to physical movement of
Products from one place to another. Since products are produced in a
Different area and are consumed in a different area, transportation
Physically moves the products from where they are produced to where
They are needed. It acts as a physical link that connects the company to
Its suppliers and customers.
Transportation is accomplished in three ways:
One’s own fleet- Private carriage borbe include albed
Contract with specialists on long term basis-contract carriage
Contract on individual shipment basis- common carriage
Determinants of effective transport system
Cost: The cost refers to total cost for the movement of goods between
The two geographical functions and expenses related to administration
And maintaining in-transit inventory.
Speed: Speed of transportation refers to the speed with which goods
Reach the destination.
Consistency: Consistency in speed means achieving the same speed
Over a long period of time.
Logistical competency can be achieved by deciding proper mode of
Transportation, deciding number and size of transport facilities, deciding
Delivery routes to be followed, etc.
4. Inventory Management: Inventory management involves maintaining
The required level of stocks to meet customer requirements
Altaneously ensuring minimum inventory carrying cost. Inventory
Management involves decision to be taken on various aspects such as:
Safety Stock
Lead Time
Replenishment of stock
Logistical competency can be achieved by accurate sales forecasting,
Efficient order management, stock control, etc.
5. Warehousing, Material Handling & Packaging:
Warehousing: Warehousing is a storage place where goods are
Stored until they are sold. Thus, warehousing is basically holding
Goods before dispatch after it is produced.
Logistical competency can be achieved by deciding number of
Warehouses, location of warehouses, types of warehouses, offering
Specialized services, etc.
6. Material Handling: Material handling means providing the right
Amount of right material, in the right condition, at the right place, at the
Right time.
Logistical competency can be achieved by deciding the type of material
Handling equipment, scheduling material handling activities and proper
Maintenance equipment.
7. Packaging: Packaging is an important logistical management function.
It has a significant impact on the cost and productivity of the logistical
System. Packaging influences both the efficiency and the effectiveness
Of logistical operations.
Basically, there are two types of packaging: Consumer packaging and
Logistical packaging.
Consumer packaging
Focus customer convenience, market appeal and product protection.
Logistical packaging includes individual units, master cartons and containers. It
Focuses on handling, protection and communication. Logistical
Competency can be achieved by decided proper type of packaging.
