Question: what do you understand from Logistics? what are the sources of competitive advantages in Logistics?

Answer: Logistics is what makes an organization move and what keeps it moving. For example a large department store needs to have a lot of stock so the warehouse where the stock is delivered to would be at the heart of the organizations' logistics. Every item in the department store including desks, PCs, checkout tills and everything that the staff need to help them do their job is all logistics. The logistics department in any organization is the heart or the hub of the organization and without an efficient logistics operation, the company would not be successful. The definition for it is: referring to how personnel acquire, transport and store supplies and equipment. In the business community, the term is used to refer to how resources are acquired, transported and stored along the supply chain. By having an efficient supply chain and proper logistical procedures, a company can cut costs and increase efficiency. In a heavily competitive environment, a major concern of business management in general, and logistics management in particular, is the strategic use of firm capabilities and distinctive competencies for competitive advantage. Firm capabilities are those things that a company does especially well that allow it to compete successfully and prosper in the marketplace.1 Logistics examples include customer service, product availability, time advantages, and low cost distribution.2 Part of the logistics message to corporate management over the last several years has been that logistics capabilities can make major contributions to overall corporate strategy and performance, and even sometimes provide the core competitive competence by creating differentiated customer value. Capabilities or distinctive competencies have been defined in the literature as those attributes, abilities, organizational processes, knowledge, and skills that allow a firm to achieve superior performance and sustained competitive advantage over competitors.3 These two terms of "capabilities" and "distinctive competencies" are often used interchangeably in the literature. However, it has also recently been asserted that the older concept of distinctive competencies has referred primarily to production technology and physical abilities of the firm.4 The more contemporary idea of capabilities is a broader term that also embraces business behavior and processes such as customer service, responsiveness to customers, and order cycle time.5 Hence, the present research will emphasize the more modern term of logistics capabilities. An emerging concept for logistics capabilities research and management practice is that different capabilities can support different "value disciplines" or strategic emphases.6 Two major value disciplines have recently been identified as customer closeness or intimacy and operational excellence.7 The first value discipline stresses the external customer, external customer interfaces, and external goals and objectives.8 It often embraces product or service differentiation and service enhancements from logistics capabilities such as time advantages or customer services. For simplicity, the present study will refer to this first value discipline as a "demand-oriented" or customer-oriented approach. Table 1 provides a listing of major demand-oriented logistics capabilities and their definitions. The list is based on a comprehensive review of relevant literature as discussed in the study's methodology section. These

demand-oriented logistics capabilities relate to customer service, time-advantages, and responsiveness to target markets. Because of this study's emphasis on overall company strategies and the logistics discipline as a whole, only major strategic logistics capabilities are considered. Table 1 is not meant to be an exhaustive list of all possible logistics capabilities. The managerial SWOT analysis (strengths, weaknesses, opportunities, and threats) and value chain analysis (activity evaluation at each step or stage) can help identify firm-specific and industry-specific capabilities. The second value discipline is related to an organization's operational capabilities. This "supply-oriented" value discipline stresses the internal customers of a company such as the marketing and production departments or retail outlets.9 It emphasizes distribution networks for market value and for competitive advantage.10 As shown in the bottom portion of Table 1, supply-oriented logistics capabilities that can potentially result in favorable business performance relate to product availability, convenience, and low total distribution cost. Again, for simplicity, the present research will refer to this second strategic emphasis as a supply-oriented to operations-oriented value discipline. Both value disciplines of demand-oriented and supply-oriented capabilities have been described previously, but it is not clear whether both can be equally successful at creating sustained competitive advantage. Do they represent substitute strategies in a particular industry, or are they complements, and are they equally beneficial for firm performance? Existing literature tends to equivocate, with some articles saying that there is mutual exclusivity and that superior firms in the future will exhibit combined value disciplines.ll Some capabilities literature has suggested that physical capabilities related to new technology (e.g., robots and EDI) and machines (e.g., computers) are inherently more imitable and cannot be sources of long-term sustainable competitive advantages.12 In contrast, demand-oriented capabilities that result from behavioral relationships and interactions with customers, between channel firms, and from company culture are much less imitable and more likely to result in sustainable competitive advantages and superior firm performance.13 It is also not clear from the capabilities literature whether particular logistics capabilities as shown in Table I are equally important for firm success and for competitive advantage in an industry. Product availability and cost may be minimum hurdles to participate in a market as an "order qualifier" or approved supplier.l4 other capabilities may reflect sustainable competitive advantages that make a firm an "order winner" or preferred supplier. If such is true, then these latter demandoriented capabilities might reflect true competitive advantages that deserve special managerial attention.

Question: What is lnventory, v,rhy it is necessary? Discuss various costs of lnventoryin inventory problems. Answer: Inventory is the total amount of goods and/or materials contained in a store or factory at any given time. Store owners need to know the precise number of items on their shelves and storage areas in order to place orders or control losses. Factory managers need to know how many units of their products are available for customer orders. Restaurants need to order more food based on their current supplies and menu needs. All of this business relies on an inventory count to provide answers. The word 'inventory' can refer to both the total amount of goods and the act of counting them. Many companies take an inventory of their supplies on a regular basis in order to avoid running out of popular items. Others take an inventory to insure the number of items ordered matches the actual number of items

counted physically. Shortages or overages after an inventory can indicate a problem with theft (called 'shrinkage' in retail circles) or inaccurate accounting practices. 1. Ordering Cost Cost of procurement and inbound logistics costs form a part of Ordering Cost. Ordering Cost is dependant and varies based on two factors - The cost of ordering excess and the Cost of ordering too less. Both these factors move in opposite directions to each other. Ordering excess quantity will result in carrying cost of inventory. Where as ordering less will result in increase of replenishment cost and ordering costs. These two above costs together are called Total Stocking Cost. If you plot the order quantity vs the TSC, you will see the graph declining gradually until a certain point after which with every increase in quantity the TSC will proportionately show an increase. This functional analysis and cost implications form the basis of determining the Inventory Procurement decision by answering the two basic fundamental questions - How Much to Order and When to Order. How much to order is determined by arriving at the Economic Order Quantity or EOQ. 2. Carrying Cost Inventory storage and maintenance involves various types of costs namely:
y y

Inventory Storage Cost Cost of Capital

Inventory carrying involves Inventory storage and management either using in house facilities or external warehouses owned and managed by third party vendors. In both cases, inventory management and process involves extensive use of Building, Material Handling Equipments, IT Software applications and Hardware Equipments coupled managed by Operations and Management Staff resources. c. Inventory Storage Cost Inventory storage costs typically include Cost of Building Rental and facility maintenance and related costs. Cost of Material Handling Equipments, IT Hardware and applications, including cost of purchase, depreciation or rental or lease as the case may be. Further costs include operational costs, consumables, communication costs and utilities, besides the cost of human resources employed in operations as well as management. d. Cost of Capital Includes the costs of investments, interest on working capital, taxes on inventory paid, insurance costs and other costs associate with legal liabilities.

The inventory storage costs as well as cost of capital is dependant upon and varies with the decision of the management to manage inventory in house or through outsourced vendors and third party service providers. Current times, the trend is increasingly in favor of outsourcing the inventory management to third party service provides. For one thing the organizations find that managing inventory operations requires certain core competencies, which may not be inline with their business competencies. They would rather outsource to a supplier who has the required competency than build them in house. Secondly in case of large-scale warehouse operations, the scale of investments may be too huge in terms of cost of building and material handling equipments etc. Besides the project may span over a longer period of several years, thus blocking capital of the company, which can be utilized into more important areas such as R & D, Expansion etc. than by staying invested into the project.

Question: What is importance of warehouse and what is role of warehousing in the logistic system? Answers: Storage warehousing is of great importance to the fast developing businesses of today. It helps lessen the expense of companies in having to transport all the goods to different places. Storage warehouses serve as depots for merchandise or other parts for manufacturing companies. Storage warehouses are basically commercial buildings used in storing goods or merchandise owned by different companies. These warehouses are generally used by companies involved in businesses. These businesses include exporting, importing, manufacturing, wholesaling, transporting, and many other industries that require large storage facilities. Storage buildings are often comprised of very wide areas that are mostly located in industrial zones. Storage warehouses are equipped with cranes, forklifts, and container trucks which are used in loading and unloading cargos. Some of the modern storage warehouses are set with automated storage systems and would no longer require manpower inside the facility. Those storage warehouses that hold perishable goods are geared up with large refrigerators which keep the products safe and fresh. Most of these warehouses maximize vertical space measuring as high as 20 meters. Goods and merchandise are stacked in ISO standard pallets and loaded on pallet racks. The pallets containing the products are moved through the use of high-tech automatic conveyors. The automated storage and retrieval machines are linked to a computer run by logistic automation software. Tracking of merchandise in storehouses is monitored through the employment of Warehouse Management System or WMS. WMS is a computer program which stores and retrieves database containing inventories and records of transactions of the warehouse. This computerized system is maintained and watched by logistic personnel. With the introduction of Just In Time technique or JIT, the use of traditional storage warehouses have declined. JIT offers a much reduced processing of inventories by way of delivering directly the products and commodities to retailers. This is similar with automobile industries wherein the parts are directly delivered to the assembly plants. However, due to the offshore outsourcing, the distance between manufacturers and retailers is of another major concern. This demands at least one warehouse in every country or region of operation in order to cater to the expansion of the business.

The recent development of storage warehouses presents double purpose. Storage warehouses can now be manipulated as retail stores. The traditional high ceilings with decorative shelves are replaced with sturdy industrial racks. These racks encompass ready to sell items placed just below the racks while merchandises which are in pallets are usually stored on top of the shelves. In this way, one building can be used as warehouse and at the same time offers retailing that can save a lot of resources compared to having two separate buildings for each purpose. Role of Warehousing in Logistics:

Many organizations are using this different types of warehouses according to their requirement. For storing different types of goods and for transporting different goods, these warehouses are used rapidly. The main requirement of the logistics is the warehouse management functions. In logistics, the management of the goods is done. The management of the goods include controlling the flow of goods, and information about the goods. Different warehouse systems are used in logistics for making it effective. The different systems are warehouse management system and the warehouse control systems. For maximizing the efficiency, these systems are used a lot. These are the different operations which are done using the warehouses in logistics. They provide various services like labeling, ticketing, configuring and testing. They provide the services very rapidly. These warehouses act as the control centers for monitoring the goods. For customer satisfaction one has to use the warehouses. In any logistics system, transporting of the goods is done from one location to the other. For checking whether the goods are transported to the customers at the right time and date, for this warehousing is used. Before delivering the goods, the goods are replenished in the warehouse initially. Although the storage is done for a short period, they are widely used. The time which is needed for transporting goods will also become less as the warehouses are placed near the centers. So, the cost of the transportation gets reduced. So, for any business the main integral part is the warehouse.

Question: What do you understand by term 'Dispatch'. Discuss importance of warehousing and Distribution Centres Location. Answer: DISPATCHING Dispatching is "the selecting and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers." A dispatch list is "a listing of manufacturing orders in priority sequence. The dispatch list is usually communicated to the manufacturing floor via hard copy or CRT display, and contains detailed information on priority, location, quantity, and the capacity requirements of

the manufacturing order by operation. Dispatch lists are normally generated daily and oriented by work center". A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations. Distribution centers are the foundation of a supply network, as they allow a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer out of a single facility, sharing space, equipment, labor resources, and inventory as applicable. A typical retail distribution network operates with centers set up throughout a commercial market, with each center serving a number of stores. Large distribution centers for companies such as Wal-Mart serve 50125 stores. Suppliers ship truckloads of products to the distribution center, which stores the product until needed by the retail location and ships the proper quantity. Since a large retailer might sell tens of thousands of products from thousands of vendors, it would be impossibly inefficient to ship each product directly from each vendor to each store. Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center.

Question: Write short notes on : Answers: Types of Inventory:A manufacturing inventory consists of three different parts: raw materials, work in process and finished goods. Using a leather crafting business as my sample craft company, here are definitions and examples of the three: 1. Raw materials: Everything the crafter buys to make the product is classified as raw materials. That includes leather, dyes, snaps and grommets. The raw material inventory only includes items that have not yet been put into the production process. 2. Work in process: This includes all the leather raw materials that are in various stages of development. For the leather crafting business, it would include leather pieces cut and in the process of being sewn together and the leather belts and purse etc. that are partially constructed. In addition to the raw materials, the work in process inventory includes the cost of the labor directly doing the work and manufacturing overhead. Manufacturing overhead is a catchall phrase for any other expenses the leather crafting business has that indirectly relate to making the products. A good example is depreciation of leather making fixed assets. 3. Finished goods: When the leather items are completely ready to sell at craft shows or other venues, they are finished goods. The finished goods inventory also consists of the cost of raw materials, labor and manufacturing overhead, now for the entire product.

Buffer Stock: Buffer Stock is the Inventory of inputs held as a reserve against short-term shortages
and/or to dampen excessive fluctuations in the prices of commodities and thus protect local exporters from wild swings in world commodity prices. Buffer stock is the Inventory of inputs held as a reserve against short-term shortages and/or to dampen excessive fluctuations in the prices of commodities and thus protect local exporters from wild swings in world commodity prices.

Bar Code: A barcode is an optical machine-readable representation of data, which shows data about the object to which it attaches. Originally, barcodes represented data by varying the widths and spacings of parallel lines, and may be referred to as linear or 1 dimensional (1D). Later they evolved into rectangles, dots, hexagons and other geometric patterns in 2 dimensions (2D). Although 2D systems use a variety of symbols, they are generally referred to as barcodes as well. Barcodes originally were scanned by specialoptical scanners called barcode readers, scanners and interpretive software are available on devices including desktop printers and smart phones. The first use of barcodes was to label railroad cars, but they were not commercially successful until they were used to automate supermarket checkout systems, a task for which they have become almost universal. Their use has spread to many other tasks that are generically referred to as Auto ID Data Capture (AIDC). The very first scanning of the now ubiquitous Universal Product Code(UPC) barcode was on a pack of Wrigley Company