Logistics
Management
KURIAN M J :
08PG0124
PRAVEEN MOSES P :
08PG0132
VENU GOPAL V :
Logistics
“Logistics is the process of planning,
implementing and controlling the efficient,
cost-effective flow and storage of raw
materials, in-process inventory, finished
goods and related information from the
point of origin to point of consumption for
the purpose of conforming to customer
i.e. Moving Right People & Right
Equipment to the Right Place at the
Right Time through the Right Methods.
Logistics Cycle
Transportation Transportation Customer
Warehousing
s
Informatio
n
flows
Factory
Transportation
Vendors/plants/ports
Warehousing Transportation
Why Logistics Management?
• In the past, Distribution was not
important. Because of manufacturers’
monopoly
E.g. 10 years waiting for Padmini Cars.
6 years waiting for Bajaj Scooters
• Shift from ‘Sellers’ Market to ‘Buyers’
Market
• Consumers are now Bosses
• To have competitive edge over others
it is necessary to manage logistics
Why Logistics Management?
• Business has become more Complex
& Dynamic now
• Vibrant market (Market is time &
price sensitive)
• Rivals not only copy, they add more
features & give more value for your
money
So why Logistics
Management?
• Complicated business scenario
• Rapid economic boom
• Globalization, Liberalization
• Intelligent consumers
• Quick delivery & after sales service
(24 hrs)
Hence the need of Logistics
Management.
Nature & Concept of Logistics
Management
• Logistics from Greek word ‘Logisticos’
meaning “science of computing and
calculating”
• First used in military sense (Logistical
Support)
(World War II & other wars)
Strategic Logistic Management
includes 4 steps
1. Corporate vision & objectives – To
turn it into winning edges over
others
2. Strategic logistics analysis (i.e.
finding alternatives, evaluation,
selection etc.)
3. Logistics planning & evaluation
4. Managing change
Various Decisions in Logistics
Management
• Plant Location
• Choice of sources/ markets
• Production structure & planning
• Distribution/ Dealer network
design
• Warehouse location/ operations
• Plant layout
Various Decisions in Logistics
Management
• Inventory management/ stock
levels
• Transportation models/ Routing/
Capacity
E.g. Cement Transportation
(wagon shortage) change in packaging
(Jute, plastic)
• Packaging
• Material Handling
• Storage problems in monsoons
Various Agencies Involved
• Shippers
• Suppliers
– Carriers (Rail, Road, Air etc)
– Warehouse providers/ Freight
forwarders
– Terminal operators (port, stevedores)
• Government (Regulations &
logistics)
– Role CST, local sales tax, excise,
Other Factors
• Inbound Logistics (Raw Materials)
• Outbound Logistics (Finished Products)
• Single v/s Multiple plants
• Nature of the products
e.g. various dimensions
- Bulk, perishable, non-perishable,
refrigerated, non-durable, industrial v/s
consumer products, packaged products
(Fruits/ Vegetable exports)
Logistics
Department In
Contact person:
Gautham Nayak,
Project Manager,
Bosch.
Company
•Robert Bosch Engineering and
Business Solutions Limited is a 100%
owned subsidiary of Robert Bosch
GmbH.
•Provide engineering, IT and business
services for the automotive,
industrial, consumer goods and
building technology divisions of the
Bosch group worldwide.
•ISO 9001:2000 certified and
Company
Core Business:
• Automotive technology
• Industrial technology
• Consumer goods and power tools
• Security Systems
Company
Bosch has invented the following:
•Anti-lock braking system (ABS)
•Traction control systems (TCS)
•Electronic Stability Programme (ESP)
Logistics
Bangalore Production Center is the
Hub, which caters to the demand of
power tools.
• Exercise Warehouse
• Other Warehouse
The entire system is controlled by a
ERP software.
Logistics interface with
Marketing
• First, to analyze ‘customer needs’
and then design' services’.
• Then, design a suitable logistics
system.
• Less inventory but faster mode of
transport for reaching the goods.
• ‘Customer Servicing’ through ‘better
& faster’ logistics.
Logistics interface with
Production
• Inventory tied up is money tied up.
• To produce the right product.
• Production schedule through better
planning management.
• Production to be market oriented.
Logistics interface with
Production
• Procurement of raw materials
requires planning, lead time, mode of
transportation, time, cost.
• Co-ordination between production
and other departments
i.e. ‘Logistics’ the whole concept
Models in Logistics
Management
These are ‘Quantitative’ models from
operations research
2.Forecasting Models
– Demand and Supply based on past
data
3.Mathematical Programme Model
a) Location Model
• i.e. planning optimal & ideal location of
plant & warehouses, both for inbound
and outbound
• To minimize Transportation cost
Models in Logistics
Management
b) Allocation Models
• i.e. optimal allocation of commodities from
‘sources’ to destinations with a vast &
multidimensional network
e.g. a company with 3 plants & 15
warehouses
c) Distribution Network Design Model
• Involves location of warehouses & break
bulk points, choice of transportation modes
• Distribution costs include transportation,
ware housing, handling, inventory
Models in Logistics
3.
Management
Inventory Models
– Costs on buffer stock keeping for
uncertainties
– Shipment & inventories of Finished products,
its warehousing & retailing
– Pipeline inventory
5. Routing Models
– i.e. routing of transportation network to
destinations
– The simplest model is called the shortest
path problem
e.g. Critical path method in Operations
Inventory Management
Decisions
• JIT (Just In Time) is a Japanese
philosophy (initiated recently)
i.e. nothing is produced/ moved until the
need arises
• Produces against advance firm order
(Pull)
• ‘Push’ is in anticipation of the demand
• In pull, product flow is based on
demand
Inventory Management
Decisions
ROP (Reorder point)
• At ROP, the new order is placed
• The quantity to be ordered is based on
EOQ
EOQ = (2AS)
√ i
A = Annual usage
S = Set up ordering cost
i = Inventory carrying cost
Reliance Retail Ltd
Contact person
Tom Antony
Asst Manager, RRL
Cochin, Kerala
RRL organization structure
How the Logistics department
works???
• Kerala divided into 8 zones
• Central warehouse in Trichur ( centre
of Kerala geographically)
• The whole logistics department is
centralized with ERP software – S.A.P.
• Quantity level at each zonal
warehouse inspected and reported to
the central warehouse everyday
• If minimum quantity is reached,
S.A.P. triggers automatically, intent
which goes to Distribution centre
(D.C.)
• Intent contains details like site code,
article code, quantity needed etc,
which are generated by S.A.P.
• A chart will be generated by S.A.P. and
given to drivers of distribution fleet
which will contain route information,
item code, quantity etc to be delivered
to different stores across Kerala
• The goods will be taken from Central
warehouse to distribution centre, and
from there to stores.
• Tools used by S.A.P. – graph theory,
travelling salesman algorithm etc
