A study on Logistics management

at Lintas Freight
By
Polina Anusha
Roll Number:1408020415
Under the esteemed Guidance of
V. Harinath

LOGISTICS
Defined
Planning implementing and controlling
the physical flow of material and
finished goods from point of origin to
point of use to meet customer`s need at
a profit
By Philip Kotler
It is essentially a planning process and
an information activity
So A integrative process that optimizes
the flow of material and supplies

The word logistic has originated from

Greek word Logistikos and the Latin
word Logisticus which means science of
computing & calculating
In ancient times it was used more in
connection with moving armies, the
supplies of food & armaments to the war
front.
During World War II logistics gained
importance in army operations covering
the movement of supplies , men &
equipment across the border
Today
It has acquired the wider meaning and is

Scope of Logistic
It is of critical importance to the organization how
it delivers products & services to the customer ,
whether the product is tangible or intangible.
Effective & efficient Physical movement of the
tangible product will speak of intangible services
associated with the product and the organization
which is delivering it.
In Case of intangible product , the delivery of
tangibles at the right place & right time will speak
about its quality.
On the macro level infrastructure such as Various
modes of transport , transportation equip., storage
facilities, connectivity & information processing
are contributing to a larg3e extent in the physical
movement of goods produced in manufacturing ,
mining & agriculture Sectors.

Scope of logistics
This speed & reliability in distribution of
products & services contribute to a great
extent in the growth of a country`s
domestic & international trade . Logistic
cost as a percentage of GDP across the
world is shown in the following table
Country
Logistic cost as a percentage
of GDP
Korea
China
Japan
India
France

16
15
14
13
12

Scope of logistics
India spent nearly $ 50 billion to move
material from one use to another.
So the Public distribution system in the
country needs logistical support for
delivering goods at right place on time and
the lowest cost.
At Micro Level logistic plays a critical role in
the value delivery system of business
organization to provide superior customer
service i.e. to achieve a desired level of
delivered services and quality at the lowest
possible cost.
In a nutshell any productivity improvement
that could be achieved in any part of logistic

Fact
In a manufacturing org. the business process
starts with the flow of material from the
suppliers, progress to the plant, then to the
customer through the distribution channel the
department may excel in their respective
function but org. as a whole their performance
may be dismal.
Reason
Lack of Co ordination in their activities
They have different goal to cherish
There is no single agency that coordinates
their functions and homogenizes them.
How to overcome ?

Logistic A system approach

Logistic recognizes that all the activities of
material movement across the business
process are interdependent and needs close
coordination and these are to be maintained
as a system and not the functional Silos.
System is shown as logistic Mix including
following functional Areas
Order Processing
Information Flow
Warehousing
Inventory control
Packaging

Order Processing
Involve following activities
Order checking for any deviation in agreed on
negotiated term
Technical details;price;delivery period;payment
terms;taxes etc
Checking the availability of material in stock
(material requisition)
Production & material scheduling for shortage
Acknowledging the order, indicating deviation if
any
It is routine operation but require great deal of
planning training of people involved and
investment to bring about efficiency & accuracy
In a large organization a system capable of
handling thousands of voluminous orders with

Information Flow
It is basically information based activity of
inventory movement across the supply chain.
Hence role of information system plays a vital
role in delivering superior customer service
This function is required to facilitate the
following information needs
Order Registration
Order checking & editing
Order processing
Coordination means to integrate the total
supply chain of the company with informational
needs as to time ,quantity, value e.g Lead time,
rate of consumption , delivery schedule & price
of the material , Transportation time & cost etc.

Warehousing
A storage place wherein finished goods are
stored till they are sold.Effectiveness of an
organization`s marketing strategy depends on
making the right decision regarding
warehouse.

Nowadays
Warehouse are treated as switching
facilities rather than storage place.It is a
major cost center, many customer problem
are the direct result of improper
warehousing management.
Major decision of ware house are as
follows:-

Inventory management
Point order problem
That is
How much to order
When
to order
For this we require
Dependable IMS
Independent
IMS
Purchase Control
Issue
management

Stores control

ABC Analysis

Packaging
It is also a critical element in
physical distribution of the
product , which influences the
efficiency of the logistic system
this is done with the view of
following : Foe handling and damage
prevention
For communications
For inter modal transportation
Storage space economy

Transportation
Foe the movement of goods from supplier to
buyer , transportation is the most
fundamental and important component of
logistic.
E.g. for low unit value products the
transportation cost component is 20% of
the product cost.
In logistic cost its share varies up to 65-70%
in case of mass consumed very low unit
price products.
Mode of transportation ( Cost & time
factor)
Own fleet or Outsourcing

Three Forces
Which have

change the perspective of

logistics

Globalization

Focus on Supply chain

Management
Outsourcing of Non Core

Globalization
The entire world has become a
global village for marketers because
of the liberalization of economics of
most countries and the emergence
of WTO which is forcing business
organizations to supply products
beyond the national boundaries
wherever there is a market
opportunity.
In such conditions the role of

LOGISTICS
Will be to provide time and place

Focus on Supply Chain Management

Business the world over are striving for
competitiveness. In their struggle for
survival their focus has shifted to the
supply chain
I.e.
Integrating the process of Procurement ,
processing & distributing to deliver value
for money to the customer
Two key roles logistics planning & support
are
Value delivery process
success of

Outsourcing of Non Core Competency

functional Area
Outsourcing is a acceptable trend in
business.
Corporation have realized that doing
everything by themselves does not result in
effective & efficient use of scare resources
available to them.
It is better to outsource functional area to
experts who can do job at the lowest cost
and that to efficiently & Effectively.
LOGISTICS
Is one such area where most of business
org. do not have enough expertise thus

Value Chain
It is understood now that an
organization`s competitive Success
could only come through either cost
leadership or offering differentiated
product and services

LOGISTIC MANAGEMENT
Can provide both the benefits
simultaneously
Through its value chain activities
Which can be categorized into different
types
Inbound logistics
operations

Infrastructure
O
p
e
r
a
t
i
operationso
n
s

A&F

S&M
Services
In bound logistics

Technology

Out bond Logistics

M&M

HR

Customer Value

Supply Chain

Stores

Procurement

Vendor

Inbound
Logistics

Operations

Stores

Warehouse

Customer

Out Bound
Logistics

Supply Chain
Material flow

Stores P
r
RM

o
c
u
r
Purchase e
m
e
n
Vendor t

OPERATIONS

Information flow

Inbound Logistics

Material flow

D
Stores
is
FG
tr
i
b
Warehousing
u
ti
o
n Customer

Out bound logist

Logistics for Business Excellence

For Business Excellence logistics operation
need to be integrated on the following two
fronts
integration of logistic into business
Integration

of components of logistics
To achieve the objective of making
available right product at the right place
and at a right time at low cost , every
business is required to integrate logistics
into the business process.
For logistic operation to run smoothly,

Logistic
HR

A/Cs Finance
MarketingPPC
Utilities

QC Mat. Mng. IT

Others

Organizational Functions
In process Log.

Suppliers

Procurement
In Bound Log.

Processing

Distribution

Customer

Out Bound Logistic

Logistic System Component

Transportation Material Handling & Storage
Logistical Packaging

Warehousing
Information
Inventory Mang.

LOGISTIC FUNCTION
Order Processing

Objectives of Logistic management

Inventory Reduction
Reliable and consistent delivery
performance
Freight economy
Minimum product damage
quick Response

NOTE:
Amongst most of the Indian
companies logistics outsourcing
Has now become an accepted trend
for the following reasons:
Cost Saving
Focus on core Business
Paucity of funds
Reduction in liabilities
Wider Geographical coverage
Cross pollination of better available
practice

Warehousing
Nowadays warehousing is used as a
switching facility rather than as a long
term storage house.
Attention is paid to
1

Higher
lower
shorter
inventory turnover
operating
cost
cycle time
And in light of these warehouse`s
performance is judged by its productivity
1
and cost performance while2trying to
achieve 2 polemic goals.

We have to decide on 2 factors

Whether to have
Centralized
decentralized
warehouse
warehouse

It ensures tight control

distribution
On inventories and can
centers
Operate on EOS

multiple

location of

Objective
Main
better customer service
operating cost
Ancillary objective

low

Maximum utilization of storage space

Higher labour productivity
Maximum Asset utilization
Reduction in material handling
Increase in inventory turnover
Reduce order filing time

Warehousing Function
3 Functions
Material Storage Function
Material Handling Function
Information Handling Function

Material Storage function

Due to non synchronization of
Manufacturing cycle with that of the
consumption cycle of the material ,
storage of the material remains a big
hurdle
So material storage is required to
accommodate the following functions:
Holding
Consolidation
Postponement
Break Bulk
packing

Material Handling function

This involves three function

1.

2.

Loading & unloading

Material Movement
3.

Order filing

Information handling function

For this following information is
required
Goods inward
Inspection & auditing
Goods outward
Excess Stock
Invoicing
Warehouse expenses
Transit damage & Breakage
Consignment tracking
This all information facilitate quick
decision