LOGISTICS MANAGEMENT

UNIT - 1
 DEFINITION OF LOGISTICS
• According to Philip Kotler -

Planing, Implementing and Controlling

the Physical flows of materials and
finished goods from point of origin to
point of use to meet the customer’s need
at a profit is called Logistics.
 CONCEPTS OF LOGISTICS
Logistics in a business is typically made up of many components,
• Customer service
• Demand forecasting
• Warehousing
• Material handling
• Inventory control
• Order processing
• Transportation.
 EVOLUTION OF LOGISTICS CONCEPT
• INDEPENDENT BUSINESS FUNCTION (Till 1950)
logistics function were limited to warehousing and
transportation of raw manterials.
• LIMITED INTERNALLY INTERGRATED BUSINESS
FUNCTION (1960 - 70)
corporate faced difficulty in coverting products to cash three
reasons are
1. competitive environment
2. recession in 1958
material management and physical distribution
management were together.
• FULLY INTERNALLY INTERGRATED BUSINESS
FUNCTION (1980)
business started generating change
1. transportation is no longer stable because of high fuel
price.
2. inflation continued.
3. production productivity was high
materials management, manufacturing management and
physical distribution were intergrated together and named
Logistics.
• EXTERNALLY INTERGRATED BUSINESS FUNCTION
(1990s).
1. Liberalization - movement of goods from one country to
another - world class competition. - firms started to adapt
the concept of TQM (Zero defects)
2. Rapid innovation
3. New inventory management techniques - MRP, DRP and
JIT.
4. customer satisfaction
5. emergence of 3p’s (Third Party Logistics service) allows
the corporate to concentrate on the core competencies of
production and marketing.
6. Supply chain management extends this concept to firms.
 EVOLUTION OF Logistics Management
• 1. Military logistics in ancient times
Military operations, where the effective movement of
personnel, equipment, and supplies was essential to battles
and campaigns, are the origin of logistics management.
Military logistics can be traced to ancient Persia, where
Cyrus the Great set up a network of supply points and
transportation routes to support his armies.

This is the first documented example of military logistics.

• 2. The Industrial Revolution and its impact on
logistics management

Significant modifications to logistics management

were brought about by the industrial revolution in the 18th
and 19th centuries.
Businesses now have new opportunities to move
goods over long distances effectively thanks to the
development of transportation.
• 3. Development of transportation systems and
logistics infrastructure
Transport and logistics infrastructure made
significant strides in the 20th century.
The development of trucking, air cargo, and
container shipping revolutionised the movement of
goods. This made it simpler and more affordable to move
goods across international boundaries and continents.
Building warehouses, distribution centres, and
other logistics facilities contributed to supply chain
effectiveness improvement by cutting lead times and
inventory costs.
Logistics can have a significant impact on a company's
success, including:
• Increased efficiency
• Lower costs
• Higher production rates
• Better inventory control
• Smarter use of warehouse space
• Increased customer and supplier satisfaction
• Improved customer experience
 COMPONENTS OF LOGISTICS
• STRATEGIC COMPONENTS
Relation of customers in terms of their ability to returns
againist investment made. commitment of long run
• LOGISTICAL COMPONENTS
Deals with basic services required to deliver the goods.
• NON - LOGISTICAL COMPONENTS
Value added services offered to the customers.
 COMPONENTS OF LOGISTICS
• Transportation
An important part of logistics at every stage, from
acquiring raw materials to transporting finished products.
• Material handling
The goal is to move the right material to the right
place at the right time and in the right condition.
• Inventory management
Monitoring the location of supplies and goods
across business locations.
• Information and control
forecasting demand and inventory, which can
help with planning and organizing transportation.
• Demand planning
Ordering merchandise in the right quantities and
at the right price, and mobilizing suitable transportation to
meet customer demand and protect profits.
• together for transport.
• Warehousing
Ensuring goods reach the end user on time and in
good condition, without adding to the manufacturer's cost
burden.
• Packaging and unitization
Helps products of all different shapes and sizes
come together for transport.
 NATURE AND IMPORTANCE OF
LOGISTICS
• Improved customer experience
• Customers are more likely to return and be satisfied if
products arrive in good condition and they can track their
orders.
• Reduced costs
• Logistics management can help companies cut shipping
costs, reduce warehouse space needs, and automate
processes to reduce administrative costs. These cost
savings can be passed on to customers through better
prices or product value.Better visibility
• Logistics management can help companies gain visibility
into their supply chains and operations, and make
informed decisions using real-time insights.
• Support for expansion
• Logistics management can help businesses plan for the
future and pave the way for expansion.
• Increased efficiency
• Logistics management can help businesses increase
production rates, improve inventory control, and reduce
waste and inefficiencies.
 COMPETITIVE ADVANTAGE OF
• According to WilliamLOGISTICS
C Copacino 5 ways to gain
competituve advantage
• Lowering costs
Logistics management can help businesses
reduce costs by making activities and processes more
efficient, and by partnering with suppliers and business
customers.
• Shortening order fulfillment time - Flexibility
Logistics management can help businesses meet
customer expectations by shortening the time it takes to
fulfill orders.
• Creating Value added service
Logistics management can help businesses create
value by offering services such as faster or scheduled
delivery, or product assembly.
• Superior customer service
Logistics management can help businesses
improve the customer experience by providing real-time
information on the location of goods, and by ensuring that
the right amount of product is delivered on time and in the
required quality.
• Regeneration
• it must have the capacity to innivate or develop new ways
to serve the market.
Generic Value Chain - Michael E.Porter
 Advantages Of Value Chain Analysis
• 1. The value chain is a very flexible strategy tool for looking at
business, competitors and the respective places in the industry’s
value system.
• 2.The value chain can be used to diagnose and create
competitive advantages on both cost and differentiation.
• 3. It helps in understanding the organisation issues involved with
the promise of making customer value.
• 4. Comparing a business model with the competitors using the
value chain can give you a much deeper understanding of your
strengths and weaknesses
• 5. It can be adapted for any type of business – manufacturing,
retail or service, big or small.
 FUNCTIONS OF LOGISTICS
• PROCUREMENT FUNCTION
• PRODUCTION FUNCTION
• PHYSICAL FUNCTION
 PROCUREMENT FUNCTION
• Identifies the need of inputs in terms of quality.
• negotiation with the vendors, order placement and
shipment of goods.
• sbsequent requirement of handling the goods, storing the
goods and movement of goods to the final use.
• these ate the in bound logistics.
 PRODUCTION FUNCTION
• deals with efficient and effective management of work in
progress inventory.
• timely available for the semi processed materials to
support production.
• this function is limited to movement within the enterprise.
• the production function of logistics is also called
manufacturing function or operational function.
 PHYSICAL FUNCTION
• it refers to the movement of finished goods from the last
point of production to the customers.
• the majore logistics componets which comes under this
function are
– transportation
– distributing warehousing
– order processing
– protective packaging
• this ensures zero defect service
• this function is also called out bound logistics.
 PRINCIPLES OF LOGISTICS
MANAGEMENT
• 7 p’s of Logistics.

• Getting the Right product, in the Right quantity, in the

Right condition, at the Right place, at the Right time, to
the Right customer, at the Right price.

• 3 C’s of Logistics

• Communication, Collaboration, and Change

 LOGISTICS NETWORK
• logistics network is a system that coordinates the
movement of goods between suppliers, manufacturers,
wholesalers, retailers and consumers.
Five steps to an optimised logistics network
• Define the Goal. ...
• Gather the data
• Document the current situation. ...
• Logistics network scenario modelling to test
alternatives. ..
• Principles of Global
Storage, Logistics Management
• warehousing
• materials handling.
• Packaging
• Inventory.
• Transport.
• Information and
• control.
 INTERGRATES LOGISTICS SYSTEMS
• An integrated logistics system, or ILS, is a business model that
coordinates all aspects of a company's supply chain to improve
efficiency and effectiveness while reducing costs.
Departments
• Aligns departments, processes, resources, and flows to work in
the same direction
Technology
• Uses technology to coordinate and work together across the
supply chain and logistics
Support
• Plans and develops efficient support for systems throughout their
 Integrated logistics can involve many
• Procurement: Aligning supplier relationships with demand
activities, including:
forecasts
• Warehousing: Strategically positioning warehouses to
optimize distribution and reduce delivery times
• Inventory management: Using real-time data to prevent
stockouts or overstocks
• Order processing: Streamlining picking, packing, and
shipping processes
• Transportation management: Planning and executing the
movement of goods from the point of origin to the point of
consumption.
• Integrated logistics can lead to significant improvements,
such as:
• Reduced operating costs
• Faster order turnaround times
• Enhanced customer satisfaction
• On-time delivery
• Order accuracy
• Flexibility to meet specific needs
• Shorter lead times
Advantages of integrated logistics
• Lower costs. Integrated logistics consolidates various
supply chain functions hence it lowers the cost of
logistics.
• Improved efficiency and flexibility. ...
• Better supply chain visibility. ...
• Enhanced customer service.
 CASE STUDIES
HOW TO WRITE A CASE STUDY
TYPE - 1
• Executive Summary/Synopsis. Introduce the topic area of
the report. ...
• Introduction. Summarise the your task. ...
• Findings. Identify the key problems you have identified by:
...
• Discussion. Summarise the major problem(s). ...
• Recommendations. ...
• Conclusion. ...
• References. ...
 TYPE - 2
• Prepare: Before you start writing, read the case
thoroughly, take notes, and highlight relevant facts.
Identify two to five key problems and possible solutions.
• Start with a headline: Write a brief headline that
summarizes the most important information, similar to a
newspaper headline.
• Provide an overview: Start with an introductory
overview.or words of advice and a call to action.
• Describe the problem: State the problem, consequences,
and hesitations.
• Detail the solution: Explain the solutions implemented to
solve the problem.
• Share the results: Refer to key results and benefits.
• Conclude: Finish with recommendations and next steps,