MODULE 4

MARKETING LOGISTICS
LOGISTICS

Logistics can be referred as the process of anticipating the customer

needs & wants, acquiring the capital, materials, people, technologies
& information necessary to meet those needs or wants and
optimising the goods or service by providing a network to fulfill the
customers requirements in a timely manner.
TYPES OF LOGISTICS
Logistics can be divided into 4 types:

 Business Logistics: It is a process of planning, implementing &

controlling efficient flow of goods & services from one point to
another point.

 Military Logistics: It refers to the design & integration of all

aspects of support for operational capability of the military
forces & their equipment to ensure readiness, reliability &
efficiency.
TYPES OF LOGISTICS
• Event Logistics: The network of activities, facilities & personnel
required to organise, schedule & deploy the resources for an event to
take place & to efficiently withdraw after the event.

• Service Logistics: The acquisition, scheduling & management of the

facilities/assets, personnel & materials to support & sustain a service
operation or business.
 LOGISTICS MANAGEMENT

Logistics Management is the process of planning, implementing and

controlling the efficient, effective flow and storage of goods, services
and related information from point of origin to point of consumption
for purpose of conforming or catering to customer requirements.
SCOPE & IMPORTANCE OF LOGISTICS MANAGEMENT
 It involves the integration of information, inventory transportation,
warehousing, materials, handling and packaging.

 It integrates materials management with sales & distribution

management.

 It adds value by creating time & place utility.

 It creates value for customers, suppliers & stakeholders of the firm.

 It is an integrating function which coordinates & operates all logistic

activities along with the functional activities.
FUNTIONS OF LOGISTICS MANAGMENT

• Procurement/Purchasing
• Transportation
• Warehousing
• Order Picking
• Inventory/stock control
• Materials handling/packaging
• Physical Distribution Management and
• Recycling Returns & waste disposal.
 PURCHASING /
PROCUREMENT

Procurement is concerned with the purchasing & arranging inbound

movement of materials, parts or finished goods from suppliers to
manufacturing plants, warehouses or retail stores, etc..
The importance of purchasing is not only the cost of the goods
purchased, but also the quality and timing of deliveries of goods &
services wherein both have an impact on the operations.
TRANSPORTATION

The process of movement of the products across space or distance

adds value to the products as it gets them nearer to the points of
consumption & the distribution network or end users,
transportation provides time & place utility which forms one of
most important & primary functions of physical distribution.
 TRANSPORTATION COSTS

The factors influencing the transportation costs are the product or the
market in which it is being dealt in.

Product related cost are dictated by density of the product, ease or

difficulty of stack ability, handling & liability on loss of damage.

Market related costs can be dictated by the location of the markets,

seasonality of product movements, impact on customer service,
competition, government regulations, etc….
TYPES OF TRANSPORTATION
 Rail Transport
 Road Transport
 Air Transport
 Water Transport
 Pipeline Transport
 Ropeway Transportation(hill stations)
 Intermodal Transportation(use of 2 or more carriers
of different modes through shipment)
WAREHOUSING

It refers to the functions undertaken by a storage house other than

storing the goods Until the production process like breaking bulk,
dispatching goods to smaller consignments to retailers, holding the
stocks for retailers, regulating the goods flow to retailers, providing
market intelligence and other merchandising services to
manufacturers.
 DECISIONS IN
WAREHOUSING
• Warehousing decisions are made in a trade off frame work for which the
total cost will be the determining factor.
• It includes decisions regarding the owning or hiring a warehouse.
• It includes decisions regarding centralising & decentralising activities.
• It includes decisions regarding the investments in fixed assets
• It includes decisions regarding the space shelving, material handling, etc…
TYPES OF WAREHOUSES

• General warehouse
• Bonded Warehouse
• Cold Storages
• Buffer storage Warehouses
• Import-Export Warehouses
STOCK / INVENTORY CONTROL

It refers to the process of accounting the raw materials, packing

materials, work-in-progress and finished products.
The main objective of stock control is:
 To maximise customer service
 To minimise the cost of operations
 Minimum investment to deliver the agreed customer service.
 MATERIALS HANDLING

It refers to the process of managing the received, moved, sorted &

assembled goods to meet the management’s & customer’s
Requirement and also to efficiently handle the information that is
required by the management and the organisation.
 PACKAGING
It refers to the process of protecting the goods from effective damage
while in the storehouse or during the process of transporting the
products from the point of origin to the point of distribution. It is done
in order to:
 Facilitate storage & handling
 To promote better utilisation of transportation
 To identify product & provide information
 To protect the product
 To change the product density
 Physical Distribution
Management
It refers to the process of delivering the product to the user or
consumer promptly, safely and well within time. It involves
management of physical flow of raw materials, finished products,
i.e. the movement of goods from the point of origin to the point of
consumption.
COMPONENTS OF PHYSICAL
DISTRIBUTION

• DISTRIBUTION PLANNING & ACCOUNTING

• IN BOUND TRANSPORT
• RECEIVING
• INVENTORY MANAGEMENT
• IN PLANT WAREHOUSING
• ORDER PROCESSING
COMPONENTS OF PHYSICAL
DISTRIBUTION
• PACKAGING
• DISPATCH OF GOODS
• OUTBOUND TRANSPORT
• FIELD WAREHOUSING
• CUSTOMER SERVICE
• COMMUNICATION
DECISIONS IN PHYSICAL
DISTRIBUTION

• Laying down procedure for order processing

• Maintaining an inventory control system
• Choosing a warehousing system
• Determining a material handling system
• Selecting a method of transport
 USES OF PHYSICAL
DISTRIBUTION
• Improves customer service
• Reduces distribution costs
• Creates time & place utility
• Stabilise Prices
• Influences channel decisions
RECYCLING RETURNS & WASTE DISPOSAL.

It is one of the most important activity that has gained a lot of

importance in the recent times mainly due to stringent government
regulations and raising awareness of the environment. The materials
that are salvaged due to overbuying due or forward purchase
changes in product design, etc.. are sold by the firms as by-products.
Technology and Communication

The integration of technology, such as communication platforms and

data-sharing systems, plays a crucial role in ensuring effective
communication within the logistics process.
Streamlining the Logistics Process
Process Optimization: • Integration of Systems:
• Identify bottlenecks and • Implement integrated software
inefficiencies in logistics processes. systems for seamless data flow.
• Utilize Lean and Six Sigma • Connect different elements of the
principles to streamline supply chain for real-time visibility.
operations. • Use technology to bridge
• Implement automation communication gaps and enhance
technologies for repetitive and collaboration.
time-consuming tasks.
Streamlining the Logistics Process
• Supply Chain Visibility: • Collaboration with Partners:
• Invest in technologies such as • Foster strong partnerships with
RFID, IoT, and GPS for improved suppliers, distributors, and other
tracking. stakeholders.
• Enhance transparency by • Share information and collaborate
providing stakeholders with real- on joint initiatives to improve
time visibility into the movement overall supply chain efficiency.
of goods. • Establish clear communication
• Utilize analytics to gain insights channels and expectations with
into the performance of logistics partners.
processes.
Streamlining the Logistics Process

Continuous Improvement:
• Implement a culture of continuous improvement within the logistics team.
• Encourage feedback from employees and stakeholders for ongoing process
enhancement.
• Regularly review and update logistics strategies based on performance
metrics.
Strategic Issues in Logistics
Management
• Globalization
• Sustainability
• Technological Disruptions
• Risk Management
• Customer Expectations
• Regulatory Compliance
 Technology in Logistics - Electronic
Data Interchange (EDI)
Definition:
• Electronic Data Interchange (EDI): EDI is a technology that enables the electronic
exchange of business documents and information between different computer
systems.
2. Functions of EDI in Logistics:
• Data Standardization: EDI uses standardized formats for documents such as purchase
orders, invoices, and shipping notices.
• Automation: Automates the exchange of information, reducing manual data entry
and minimizing errors.
• Speed and Efficiency: Facilitates faster and more efficient transactions between
trading partners.
• Improved Accuracy: Reduces the risk of errors associated with manual data entry and
processing.
Benefits of EDI in Logistics: • Integration with Supply Chain
• Cost Reduction: Reduces costs associated Management (SCM):
with paper-based processes, manual data • End-to-End Integration: EDI integrates
entry, and errors. seamlessly with SCM systems, providing
• Enhanced Accuracy: Minimizes the risk of a cohesive view of the entire supply
errors in data transmission and processing. chain.
• Faster Transactions: Accelerates the • Inventory Management: Supports
exchange of business documents, leading accurate and real-time inventory
to faster and more responsive supply management through efficient data
chains. exchange.
• Improved Visibility: Provides real-time • Order Fulfillment: Enhances order
visibility into the status of orders, fulfillment processes by automating
shipments, and inventory. order processing and acknowledgments.
• Industry Adoption of EDI: • . Challenges and Considerations:
• Retail: Widely used in the retail • Implementation Costs: Initial
industry for order processing, setup costs can be a consideration
inventory management, and invoicing.
for smaller businesses.
• Manufacturing: Employed for efficient
communication with suppliers, • Security Concerns: The secure
distributors, and manufacturing transmission of sensitive business
partners. data is crucial.
• Logistics Service Providers: Used for • Compatibility: Ensuring
tracking shipments, managing compatibility with the systems of
warehouse activities, and coordinating trading partners.
transportation.
TECHNOLOGY IN LOGISTICS
• Electronic Data Interchange (EDI)
• Artificial Intelligence
• Expert systems
• Bar coding / Scanning
ELECTRONIC DATA INTERCHANGE
It is a electronic computer-to-computer transfer of
standard business document and information between
organisations. It involves organisation-to-organisation,
computer-to-computer exchange of business data in a
structured, machine process-able format.
Its purpose is to eliminate duplicate data entry & to
improve the speed & accuracy of the information flow
by linking computer applications between
organisations.
BENEFITS OFFERED BY EDI
• Reduced paper work to be created & filed.
• Improved accuracy due to reduced manual processing.
• Increased speed of order transmission.
• Reduced costs of order placement & related processing & handling.
• Improved information availability due to speed.
ARTIFICIAL INTELLIGENCE
It is concerned with the concepts & methods
of interference of a computer & the symbolic
representation of the knowledge used in
making inferences. It comprises activities like
solving problems, learning & understanding
language, etc..
USES OF ARTIFICIAL
INTELLIGENCE
• To model response time requirements for customer
delivery.
• To determine which warehouses should serve which
plants with which products & at what inventory
levels.
• To model customer service response with various
levels of reliability
• To perform sensitivity analysis to determine how
much inputs can vary without affecting the
structure of the optimal solution.
BAR CODING AND SCANNING

Bar coding / scanning refers to placing

computer readable codes on items, cartons,
containers & even rail cars. Universal product
code(UPC) is present on virtually all consumer
products. These comprise of unique five digit
number given to each manufacturer & product.