Introduction to Logistics Management-II

1
Logistics is that part of supply chain management that plans, implements, and
controls the efficient, effective forward and reverses flow and storage of
goods, services and related information between the point of origin and the
point of consumption in order to meet customers’ requirements.
What is Logistics Management?

Definition: The process of planning, implementing, and controlling the efficient flow
and storage of goods, services, and related information from the point of origin to the
point of consumption.

Seven R's of Logistics:

• Right product
• Right quantity
• Right time
• Right condition
• Right place
• Right customer
• Right financial resources
Why is Logistics Management Important

Key Benefits:
• Ensures efficient movement of resources
• Meets customer demand and enhances service
• Reduces operational costs and drives revenue
Impact: Efficient logistics can significantly improve a company's
bottom line and customer satisfaction.
Example: Amazon's success is driven by its advanced logistics
network, enabling fast and reliable deliveries.

Source: Investopedia-Logistics
 ‘Stop’ and ‘Go’
nature of logistics.
Source: Grant, 2021. Logistics Management
Source: Grant, 2021. Logistics Management
Types of Logistics
Categories:
• Inbound Logistics: Managing the flow of materials from suppliers to production
facilities.
• Outbound Logistics: Delivering finished goods to customers.
• Reverse Logistics: Handling returns and recycling processes.
• Third-Party Logistics (3PL): Outsourcing logistics activities to specialized
providers.
Significance: Each type addresses specific needs in the supply chain.
Price & Harrison. 2020. Looking at Logistics: A Practical Introduction to Logistics and Supply Chain Management. Third Edition. Access Education Press.
Logistics delivers value to the customer through three logistical phases:
1. Inbound logistics—Operations preceding the manufacturing. This includes movement of raw materials and
components for processing from suppliers.
2. Process logistics—Operations directly related to processing. This includes storage and movement of raw
materials and components within the manufacturing premises per the manufacturing schedules. The inventory
management of stored materials and in-process goods is part of process logistics.
3. Outbound logistics—Operations following the production process. This includes the warehousing,
transportation, and inventory management of finished products.
 Warehousing
It is a major cost centre, and many problems at the customer end are directly a
result of improper warehousing management. Warehousing is the key decision
area in logistics.
The major decisions in warehousing are:
• Location of warehousing facilities
• Number of warehouses
• Size of the warehouse
• Warehouse layout
• Design of the building
• Ownership of the warehouse
Role of Technology in Logistics

Technological Advancements:
• Automation and robotics in warehouses
• Real-time tracking and monitoring
• Data analytics for optimization
• Internet of Things (IoT) for supply chain visibility
Impact: Technology enhances efficiency, reduces errors, and improves
decision-making.
 Logistics Mix Variables

Source: Grant, 2021. Logistics Management

Key Functions of Logistics Management

Core Activities:
• Order processing
• Inventory management
• Transportation
• Warehousing
• Material handling
• Packaging
• Customer service
Purpose: These functions ensure seamless flow of goods from suppliers to
customers.
 Customer value chain

1. Globalization

2. Focus on supply chain management

3. Outsourcing of non-core-competency functional areas

Role of logistics in customer value delivery chain
 Challenges in Logistics Management

Key Challenges:
• Synchronizing supply and demand
• Managing complex global supply chains
• Adapting to rapid e-commerce growth
• Ensuring sustainability and reducing environmental impact
Implications: Overcoming these challenges requires strategic planning and
innovation

Maersk - Get ready!

Trends in Logistics (2025)
Emerging Trends:
• Automation and AI: Robotics, autonomous vehicles, and drones for
last-mile delivery.
• Sustainability: Green logistics, alternative fuels, and sustainable packaging.
• Digitalization: IoT, blockchain, and big data analytics for transparency and
efficiency.
• E-commerce: Enhanced last-mile delivery and omnichannel strategies.
• Resilience: Supply chain risk management and supplier diversification.
• Regulatory Changes: Adapting to evolving trade policies and customs
technology.
Case Study: Amazon's Logistics
Overview: Amazon's logistics strategy exemplifies innovation in the
industry.
Key Features:
• Extensive network of fulfillment centers
• Investment in AI, robotics, and drone delivery
• Focus on speed and customer satisfaction
Impact: Sets a benchmark for e-commerce logistics efficiency.
 Transforming logistics infrastructure at Procter & Gamble
UK supply chain
• Procter & Gamble (P&G) manufactures and markets nearly 300 brands of consumer products, including

Ariel, Pampers, Sunny Delight and Pringles. With a workforce of nearly 100,000, P&G operates in

around 80 countries and in 2003 generated net sales of almost £24.5 billion. However, its supply chain

was inefficient.

• Issue- Missed cases – availability was 96 per cent and the number of missed cases was 4 per cent – and they were delivering

only about two-thirds of orders on time.

• The 4 per cent of missed cases amounted to seven or eight million cases a year and cost P&G an estimated £40 million.
 Schemes to help optimize and consolidate the supply chain.

• Upgrade its logistics infrastructure, including focusing on supplier relationship management and improving the

speed and accuracy of information flow up the supply chain.

• Creating two distribution centres in the north and south to deliver the full range of P&G’s ambient products on

one truck.

• Introducing cross-docking so that products bypass storage, saving time and resources by going straight onto

store shelves.

• Using IT solutions such as GPS tracking and electronic proof of delivery. P&G also built an automated

distribution centre (DC) at its London plant and upgraded its existing DC at Skelmersdale, Lancashire.
 Super Religare Laboratories: Logistics as a Differentiator
• Logistics management helps SRL to deliver on the promise of quality service on time

and the large network is used efficiently to honor the trust of patients.

• The entire logistics operation is supported by a large team of pick-up courier riders,

collection centers, courier companies, and freight forwarding companies for a

wider reach across the country.

• The company has a unique capability of tracking any specimen anywhere around

the globe, from the point of pick-up to its delivery at the laboratory.

https://www.thehindubusinessline.com/companies/srl-becomes-indias-largest-pathlab-chain-after-acquiring-ddrc/article34199522.ece
 SRL undertakes the following steps to make sure that transportation of specimens is safe and secure.
• Diagnostic specimens are packed and transported within India and from across the globe as per international
standards conforming to IATA regulations.
• Extensive validations of each and every specimen type are done over varying periods and conditions of transit to
ensure specimen quality.
• Specimens are transported in the required controlled temperature/cold chain conditions
(ambient/refrigerated and frozen conditions).
• Samples are packed in specially designed packaging with the required quantity of gel packs or dry ice.
• Within India, the time taken from the major metros is 6 hours. From most other locations, the time taken is
8–24 hours. From countries in South Asia and the Middle East, the time required is 24 hours.
• From European countries, it would take about 24–48 hours for specimen transportation.
• In essence, the quality in testing services backed by efficient logistics management is creating a
differentiation in its offerings and building customer base which is currently numbering over 10 million.
 “Customer Service”
A Key Element in Logistics
Strategy
 Adding Value to Airport Logistics

Baggage Handling System

It guarantees the airport staff a minimum connecting time of 45 minutes.

 CUSTOMER SERVICE FOR COMPETITIVENESS

COLLABORATIVE LOGISTICS FOR WORLD-CLASS SERVICES

• Multimodal transport operations (MTO) and container freight station (CFS) operations and
Rail Container Logistics, have formed a joint venture for the establishment of a CFS at
ICD, Dadri, Greater Noida, in the state of Uttar Pradesh.
 CUSTOMER SERVICE PHASES

• Customer service is the measure of how logistics is creating the time and place utility for a

product.

• The buyer looks for value for the money he is spending, while the seller, in delivering superior

customer service, looks for trade-off between cost and customer satisfaction.

• Hence, customer service depends on the phase of the transaction it is passing through.
 VALUE ADDED SERVICE

To cater to the needs of civil contractors, ACC, a cement manufacturing company, added value
to their logistics services by delivering the ready-to-use ready-mix cement concrete (RMC)
in the specially designed mixing trucks to the construction site as per the requirements.
RMC plants typically supply the product within a 50-km radius only, because of the inherent
characteristics of the ready-to-mix cement, which sets within a short time
• As a value added service, CWC assists farmers in getting financial loans from
banks against pledged warehouse receipts, up to a maximum of 70 per cent of
the value of food grains deposited in the warehouse.
• FedEx offering value-added services such as overnight package delivery,

10:30 am next day delivery, Saturday delivery time-definite service for

freight, and money-back guarantees.

Conclusion
Summary: Logistics management is critical for business success,
ensuring efficient resource flow and customer satisfaction.
Key Takeaways:
• Requires strategic planning and technological integration
• Must adapt to trends like sustainability and digitalization
• Plays a pivotal role in supply chain efficiency
Call to Action: Embrace innovation to stay competitive in the evolving
logistics landscape.