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Logistics

and Supply Chain


Management
Name-Khagendra Kumar Yadav
M-tech(AME)
Roll no- 14203015

q 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 point of origin
to point of consumption for the purpose of conforming to customer
requirements.
The mission of logistics is to get the right goods or services to the right
place, at he right time, and in the desired condition and quantity in
relation to customers order

q Main logistics activities and decisions:


cooperate with marketing to set customer service levels,
facility location decisions,
transportation activities (eg. transportation mode selection, vehicle
scheduling, carrier routing),
inventory management (inventory short -term forecasting, planning
and control, cooperate with production to calculate EOQ, sequence
and time production ),
information collection and flows and order processing,
warehousing and materials handling,
packaging and packing.

q The term basic logistics service describes


the level of service a firm provides all established customers.
Availability
Operational performance
Service reliability

q What is Logistics Management?


The objective is to plan and coordinate all the activities necessary to
achieve desired level of delivered service and quality at lowest
possible cost.
The scope of logistics include the entire gamut of activities starting
from the procurement and management of raw materials through to
delivery of final product to the customer.
The ultimate purpose of any logistics system is to satisfy the customer
by establishing linkages of people at all levels in the organization
directly or indirectly to the market place.

q Lean logistics
Lean logistics refers to the superior ability to design and administer
systems to control movement and geographical positioning of raw
materials, work-in-process. And finished inventories at the lowest total
cost.
To achieve lowest total cost means that financial and human assets
committed to logistics must be held to an absolute minimum.
It is also necessary to hold direct operational expenditures as low as
possible.
The combination of resources, skills, and systems required to achieve lean
logistics are challenging to integrate, but once achieved, such integrated
competency is difficult for competitors to replicate.

q supply chain

A typical supply chain may involve a variety of stages. These supply


chain stages include:
Customers
Retailers
Wholesalers/distributors
Manufacturers
Component/raw material suppliers

q The objective of supply chain


The objective of every supply chain should be to maximize the overall
value generated.
The value a supply chain generates is the difference between what
the final product is worth to the customer and the costs the supply
chain incurs in filling the customers request.
For most commercial supply chains, value will be strongly correlated
with supply chain profitability (also known as supply chain surplus),
the difference between the revenue generated from the customer
and the overall cost across the supply chain.

q SUPPLY CHAIN MACRO PROCESSES

q What is the Importance of Supply Chain Management?


Supply Chain Management (SCM) is an essential element to
operational efficiency.
SCM can be applied to customer satisfaction and company success, as
well as within societal settings, including medical missions; disaster
relief operations and other kinds of emergencies; cultural evolution;
and it can help improve quality of life.
Because of the vital role SCM plays within organizations, employers
seek employees with an abundance of SCM skills and knowledge.

q Is Supply chain management same as


vertical integration?
SCM is not the same as vertical integration.
Vertical integration implies ownership of upstream suppliers and
downstream customers.
Earlier, vertical integration used to be the desirable strategy but
increasingly the companies are focusing on their core business i.e. the
activities that they do really well and where they have a differential
advantage.
Everything else is outsourced.

q Implementation of SCM through Logistics


Management
SCM raises the challenge of integrating and coordinating the flow of
materials from multitude of suppliers, including offshore, and
similarly managing the distribution of the finished product by way of
multitude intermediaries.
Transferring costs upstream or downstream leads to logistics myopia
as all costs ultimately will make way to the final market place to be
reflected in the price paid by the end user.
The prime objective of SCM is to reduce or eliminate the buffers of
inventory that exists between the organizations in a chain through
sharing of information on demand and current stock levels.

q How does Logistics differ from SCM?


Logistics management is primarily concerned with optimizing flows
within the organization.
Supply chain management deals with integration of all partners in the
value chain.
Logistics is essentially a framework that creates a single plan for flow
of products and information through a business.
Supply chain builds upon this framework and seeks to achieve linkage
and coordination between processes of other entities in the pipeline
i.e. suppliers and customers, and organization itself.