PROJECT ON

LOGISTIC MANAGEMENT Presented by Salman khan

UNIT 1
1-BACK

GROUND (LOGISTIC MANAGEMENT) 2-SUPPLY CHAIN MANGT. 3-ORGANISATION STRUCTURE 4-CUSTOMER SERVICE AND ORDER PROCESSING 5-DEMAND FORECASTING

1-LOGISTIC MANGT.
WHAT

IS LOGISTIC MANAGEMENT? IMPORTANCE OF LOGISTIC INBOUND AND OUTBOUND LOGISTIC IMPORTANCE OF 3 CS THIRD PARTY LOGISTIC FOURTH PARTY LOGISTIC

WHAT IS LOGISTIC MANGT?

Logistic

is the process of managing the procurement, movement and storage of material 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 of orders

IMPORTANCE OF LOGISTICS
1-Leads

to customer satisfaction 2-Integrates logistical activities 3-Competitive edge 4-Logistics wins or loses wars 5-Logisticals costs

INBOUND AND OUTBOUND LOGISTICS

INBOUND LOGISTICS (UPSTREAM LOGISTICS)

In inbound logistics, factors like required delivery time, size of shipment, mode of transportation, value of material, inventory levels etc. the task involves:

Sourcing Order placement

OUTBOUND LOGISTICS

OUTBOUND LOGISTIC (Downstream Logistics)

It

includes distribution of finished goods, order processing , warehousing, material handling, delivery vehicles operation, scheduling, shipping etc.

IMPORTANCE OF 3 CS
Company

Customer
Competition

The three cs in business are company, customer and competition. All the three c are vital for healthy business and prosperous economy.

THIRD PARTY LOGISTICS

In view to keep the cost of inbound/ outbound logistics activities under control by reducing the liability of fixed nature, and out side agencies appointed to perform these logistics function is called Third party logistics company

FOURTH PARTY LOGISTICS

Fourth

party logistics provider is a supply chain integrator that manages the recourses, capability and technologies of its own organization with those of complementary service provide to deliver a complete supply chain solution.

2-SUPPLY CHAIN MANGT.

WHAT

IS SUPPLY CHAIN? IMPORTANCE OF SUPPLY CHAIN MANGT. PARTICIPANTS IN A SUPPLY CHAIN MANGT. RELATIIONSHIP MANAGEMENT

WHAT IS SUPPLY CHAIN MANGT.?

Supply chain management is the oversight of

materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. In the SCM there are mainly three flows;

Product

flow Information flow , financial flow

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

The

customers will benefit naturally by dealing with well managed vendors. Cost of products gets reduced considerably Quicker response to change in demand Competitive edge over competitors in market Capable of satisfying customers needs which result in sorter lead time

PARTICIPANTS IN A SUPPLY
Suppliers Manufacturer Distributors customers

and

RELATIONSHIP MANAGEMENT
Supplier

relationship management: it is maintained in order to reduce the cost of supplier Employee relations management: this is useful for the reduction of wastage in the production process. Customer relation management: this is useful for achieving of end customer satisfaction. Logistics service provider relationship management: this is useful for reduction of cost during transportation.

3-ORGANISATION STRUCTURE
BARRIERS

IN FORMING EFFECTIVE LOGISTICS ORGANISATIONS

IMPROVING

LOGISTICS ORGANISATION EFFECTIVENESS RE-ENGINEERING RESPONSIVE ORGANISATION

BARRIERS IN FORMING EFFECTIVE LOGISTICS ORGANISATION

CHANGING

CORPORATE CULTURE HAVING A COMMON VISION ESTABLISING EMPLOYEE OWNERSHIP TRAINING AND EDUCATING EMPLOYEES CHANGING MANAGEMENT PROCESSES

IMPROVING LOGISTICS ORGANISATION EFFECTIVENESS

STRATEGICS GOAL SETTING: establishing clearly defined overall organization and individual goals and trying to concile both the goals for the benefit of the organization. Resources: using technical, financial, technological resources to maximize corporate objectives. Performance environments: it motivates logistics function effectiveness.

Communication process: the organization should have an transparent and easy communication process.

Qualities of leadership and decision making: if the top executive is highly capable who makes logical decision then the organization that reports to him shall also be effective .

RE-ENGINEERING
Re-engineering

means recreating the organization and system rather than making minor changes Now the trend is toward integrating logistics function. Logistics mangt can provide value for customers through serving them better, faster, and cheaper.

RESPONSIVE ORGANIZATION
The

responsive organization puts the customer at the center of business and designs all systems and procedure to improve the speed of response and reliability of the response. From function to process From profit to performance From product to customer

4-CUSTOMER SERVICES AND ORDER PROCESSING

MEANING OF CUSTOMER SERVICE THREE LEVELS OF CUSTOMER SERVICES IMPORTANCE OF CUSTOMER SERVICE WHAT IS A PERFECT ORDER? 7 RS ORDER PROCESSING ORDER PROCESSING CYCLE LEAD TIME

MEANING OF CUSTOMER SERVICE

Customer service is a series of activities

designed to enhance the level of customer satisfaction that is the feeling that a product or services has met the customer expectation
the changing business scenario customer services is playing a prominent role

In

THREE LEVELS OF CUSTOMER SERVICE

Customer

service is viewed in the three principle ways Customer service as an activity Customer service as a performance measure Customer service as a philosophy

1.

2.
3.

IMPORTANCE OF CUSTOMER SERVICE

Improved

customer service makes business grow and helps for survival in long run. customer loyal to the firm.

Makes

Provide

and competitive edge

WHAT IS THE PERFECT ORDER?

perfect order is a customer order which is fulfilled in all respects that is time, place, quantity, fault free installation and documentation. The perfect order represent following standard: 1. Complete delivery of all items 2. Complete and accurate documentation 3. Faultiness installation

THE 7 RS
1.

2.
3. 4.

5.
6. 7.

Right material Right quantity Right condition Right time Right source Right service Right price

ORDER PROCESSING
Order The

processing is the core of logistics activity

receipt of the customer order is the trigger that sets in to motion all the logistic function that end in the delivery of the product to the customer .

ORDER PROCESSING CYCLE

1.

2.

1.

In the first step customer feels the need for certain product and places and order to the supplier. When the supplier receives the order he checks for the following things; Quantity ordered is available in the stock If not available start its production Customers credit is satisfactory Acknowledgement receipt of the order giving to the customer

1.

Picking and packing instruction are issued to ware house products are transported and delivered to the customer customer verifies the receipt of the product in terms of quality and quantity

The

The

LEAD TIME
Lead

time is an important parameter that determines the effectiveness of customer satisfaction process. one of the current challenges in the market is demand for lower lead time. 1. Lead time is the time between order and placement and shipment receipt for customer perspective.

5-DEMAND FORECASTING

Definition Importance of demand forecasting

Types of demand forecasting

Purpose of forecasting(long and short)

DEFINITION

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting may be used in making pricing decision in assessing future capacity requirement or in making decision on whether to enter a new market.

IMPORTANCE OF DEMAND FORECASTING

Forecasting product demand is crucial to any supplier, manufacturer or retailer. Demand forecast are necessary since the basic operation process moving from the supplier. Most firms can not simply wait for demand to emerge and then react to it . In other words most manufacturer make to stock . An order cycle could takes weeks or months to go back through part supplier and sub assembelers.

TYPES OF DEMAND FORECASTING

1.
2.

3.

Short term forecasting Relate to a period not exceeding a year Usually day to day information which are concerned with tactical decision under the given resources constraints. In short forecasting a firm is primarily concern with the optimum utilization of its existing production capacity.

Long term forecasting refers to the forecast prepared for long period during which the firm scale of operation

Long term forecasting permit alternatives in the scale of production differ from industry to industry
relates to in formation which are vital for undertaking strategic decision of the business

PURPOSE OF FORECASTING (LONG AND SHORT)

Purpose of short term forecasting Appropriate production scheduling

Reducing costs of purchasing raw materials Determining appropriate price policy Forecasting short term financial requirement

Purpose of long term forecasting Planning of a new unit or expansion of an existing. Planning long term financial requirements.

Planning man power requirement.