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    Logistics - Objective & Importance

    Uploaded by

    Prajyot Salunkhe

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    Attribution Non-Commercial (BY-NC)
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    Logistics - Objective & Importance

    Uploaded by

    Prajyot Salunkhe
    222 views10 pages

    Original Title

    Logistics – Objective & importance

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    © Attribution Non-Commercial (BY-NC)

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    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    222 views10 pages

    Logistics - Objective & Importance

    Uploaded by

    Prajyot Salunkhe

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
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    Logistics – Objective &

    importance
    Logistics department
    • The logistics department is entrusted with the
    responsibilities of ensuring that the entire
    process of logistics is maintained and developed
    in accordance with the goals of the business at
    an economical cost.

    • Entire process of logistics - a complete


    process of planning, managing, controlling and
    coordinating to make sure that the goods reach
    the right place, at the right time, and in a right
    condition.
    Importance of Logistics
    • Logistics is important to strategy
    • Supply and distribution lines are lengthening
    with greater complexity
    • Logistics adds significant customer value
    • Customer Service Expectations are increasing.
    • Logistics costs are significant
    Logistics is important to strategy
    • Firms spend a great deal of time finding
    ways to differentiate their product offerings
    from those of their competitors.

    • Wal-mart wins with logistics.

    • The 2010 Supply Chain Strategy –


    Unilever.
    Supply and distribution lines are
    lengthening with greater complexity
    • Globalization and internationalization of
    industries everywhere depend heavily on
    logistics performance and costs, as
    companies take more of a world view of
    their operations.
    • if a firm seeks foreign suppliers for the raw
    materials that make up its final product or
    selects a foreign locations to build its
    product, the motivation is to increase profit.
    Logistics adds significant customer
    value.
    • The customer value concept recognizes that the
    market place success in new competitive environment
    will require not only continued investment in the brand
    but also investment in customers.
    What is customer value
    • Customer value is created when the perception of
    benefits from a transaction exceed the total cost of
    ownership.
    • The same idea can be expressed as a ratio:
    Perceptions of benefits

    Customer Value =
    Total cost of ownership
    Logistics adds significant customer
    value.
    • Total cost of ownership – In most transaction
    there will be cost other than price involved –
    for example maintenance cost, running cost,
    inventory carrying cost, disposal cost.

    • The marketing task is to find ways to


    enhance customer value by improving the
    perceived benefit and/or reducing the total
    cost of ownership.
    Customer Service Expectations are
    increasing
    • Customer are expecting
    - rapid processing of their request
    - quick delivery
    - high degree of product availability

    • The internet ,just in time, VMI, logistics


    software, RFID, GPS, CPRF, have all
    contributed to the meeting customer
    expectations.
    Logistics costs are significant

    • For any country, the annual logistics cost varies


    between 9% and 20% of the GDP, the figure for
    the US being about 9%. US-based Armstrong &
    Associates, Inc.

    • The annual logistics cost in India is estimated to


    be 14% of the GDP, which translates into USD
    140 billion assuming the GDP of India to be
    slightly over USD 1 trillion.
    Logistics costs are significant
    • if India can bring down its logistics cost
    from 14% to 9% of the GDP (level in the
    US), savings to the tune of USD 50 billion
    will be realized at the current GDP level,
    making Indian goods more competitive in
    the global market.
    • The government plans to create a council
    for the development of logistics sector to
    enhance efficiency and reduce cost for
    movement of goods across the country.

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