1 Logistics Overview Logistics Overview 2 Session Objectives

1 Logistics Overview

Logistics Overview 2 Session Objectives § Definition of logistics § Logistics & supply chain management differentiation § Objectives of logistics management

Logistics Overview 3 Logistics Origin The word logistics traces its origin to the Greek word logistikos and the Latin word logisticus, meaning the science of computing and calculating.

Logistics Overview 4 Logistics History § Great Pyramid of Giza [2700 BC] § Steam Engine [1800] § World War I [1914 -18] § Invention of Sea Container [1956 - Malcom P Mclean] § Kanban & JIT concepts [1970 -1980]

Logistics Overview 5 Logistics Definition “Planning, implementing and controlling the physical flows of materials and finished goods from point of origin to point of use to meet the customer’s needs at a profit. ” [Philip Kotler]

Logistics Overview 6 Logistics Definition “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 point of origin to point of consumption for the purpose of confirming to customers’ requirements. ” [The American Council of Logistics Management]

Logistics Overview 7 Logistics Definition “Logistics is essentially a planning process and an information-based activity. ” [Martin Christopher] “The corporate traffic cop, ” which directs the flow of material from the source through the production and distribution to the final customer. [Philip scary]

Logistics Overview 8 Logistics Definition Logistics vs. Physical Distribution

Logistics Overview 9 Pervasiveness of logistics [Example-1] Logic in Logistics for 30 -minute Pizza Order registration: 1 minute Make line: 2 minutes Oven time: 5 minutes Inspection, quality check & packing: 1 minute Route checking & final confirmation: 1 minute Out of door time: 10 -12 minutes Punch in time: on return

Logistics Overview 10 Pervasiveness of logistics [Example-1] Logic in Logistics for 30 -minute Pizza Importance: Process Sequencing, Just-in-Time inventory availability and time management for success in this service operations logistics.

Logistics Overview 11 Pervasiveness of logistics [Example-2] 24 Hour ATM Logistics aspects: § Availability and continuous supply of currency notes § Information availability to customers on credit limits available at time of withdrawal § Data mining with automatic updating for real-time information on creditworthiness § E-business solutions takes care of the complex transaction process involved in ATM operations

Logistics Overview 12 Pervasiveness of logistics [Example-3] Dabbawala’s of Mumbai § Over 2, 000 office employees are catered to daily § 5000 men & women (mostly illiterate) operate in assigned areas in Mumbai § Each handles an optimum lot size of 25 -30 tiffin boxes § Dabbas collected from houses and put in tiffin racks at a network of 96 railway stations across Mumbai § Use of colour code system on dabbas to identify collection and delivery points § After lunch time operation works in reverse direction

Logistics Overview 13 Pervasiveness of logistics [Example-3] Dabbawala’s of Mumbai Logistics aspects: § Timely collections and deliveries § Error free deliveries and pick-ups § Smooth working against odds of rains, scorching heat, strikes etc § Precision of six sigma accuracy

Logistics Overview 14 Pervasiveness of logistics [Example-4] Laundry Service in Five Star Hotels Logistic operations: § Collecting laundry from 210 rooms § Three parts: staff uniforms, room laundry (bed sheets, pillow covers) and guest clothes § Special attention given to guest clothes for express or same day delivery § Identification code, and the punching into the computer for tracking, processing and final delivery § Hand over to the laundry service supplier, who delivers it in the evening to the housekeeping department

Logistics Overview 15 Objectives – Logistics Management The primary objective of a logistics system is to move the inventory in a supply chain effectively and efficiently to extend the desired level of customer service at the least cost.

Logistics Overview 16 Objectives – Logistics Management Based on Manufacturer’s viewpoint § Minimise transportation cost for raw materials § Reduce inventory cost § Freight reductions [Consolidations, Load unitising] § Proper Planning & Routing of transportation from their warehouse to destination § Eliminate warehousing charges § Proper scheduling to reduce material-handling costs

Logistics Overview 17 Objectives – Logistics Management Based on Logistician’s viewpoint § Scheduling transportation modes for good time management § Offer competitive rates to clients § Providing good service levels § Acting as representatives for Traders in International Trade

Logistics Overview 18 Objectives – Logistics Management Based on Customer’s viewpoint § Timely Deliveries § Error free documentation § Safe deliveries of their shipments/ Minimum product damages § Perfect stock maintenance § Low distribution costs for competitive advantage § Reliable & consistent delivery performance

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