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Mayur M Gogate

HPGD/JL17/1290

Role of International Logistics In


Global Procurement
Index
Sr no Topic Page no
1 What Is International Logistics? 3
2 Objectives of International Logistics 4
3 Roles of International Logistics 5
4 International Logistics Vs. Supply Chain Management 6
5 Problem with International Logistics 7
6 Elements of international logistics 8
7 Hitachi’s History 11
8 Hitachi’s Mission, Vision and Values 12
9 Hitachi International Logistic 13
10 Challenges for Logistics and Hitachi Initiatives 15
11 Expansion of global logistic 17
12 Role – reversal of the online and real worlds 18
13 Fusion and information coordination between Manufacturing, Distribution, 19
and Retail
14 Future outlook 20
15 Conclusion 21
What Is International
Logistics?
• It is derived from the Greek word
“logistikos’ which means ‘to reason
logically’ It is basically consists of all
operations required for goods (both
tangible and intangible) to be made
available in markets or at specific
destinations.
• In other words logistics are basically the
physical distribution of goods from one
country to another country
Objectives of
International Logistics
A firm’s main
objective is to
have a logistics
system which
maximizes the
customer
service and
minimizes the
distribution cost
Roles of International
Logistics
• The firm’s international logistics department is responsible for
the management, communications, control, and planning of
the logistics activities.
• Logistics activities that are related to both sales and
procurement include inventory management, materials
handling, transportation management, warehouse and
distribution center management, returned products, salvage
scrap disposal, inter-plant movements, plant and warehouse
site selection, and movement of people
• All logistics functions today are assisted by information
systems as well, and many firms consider information
systems related to logistics functions as themselves a part of
logistics management.
International Logistics Vs.
Supply Chain Management
Logistics is that part of the supply chain that plans and implements and control
the efficient, effective, forward and reverse flow, and storage of goods, services
and related information between the point of origin and the point of consumption
in order to meet customers’ requirement.
Logistics is a part of the bigger supply chain management. In clear term supply
chain management involves strategies, tactics, and operations. On the other hand
logistics concentrates on the actual ways and means to fulfills the overall supply
chain strategy. Both logistic and supply chain management are incomplete
without each other.
Problem with International
Logistics
The following are the major issues faced by logistic companies when
they are involved in international trade. These might appear at every
border, and circumstances can change within a very short distance
Difference in Logistics :-

Problem with Trade


Political and Legal System.
Economic Conditions
Competition
Availability of Technology
Geography
Financial Issues
Customs Barriers
Elements of international
logistics
Transportation- Transport is
responsible for the physical movement
of materials between points in the
supply chain. In an organization uses
third party transport, the price of
moving a unit of material between
locations.
Modes of transport are- Road, Rail, Air,
Sea, Multi-modeland Pipeline.

Distribution & Supply - Physical distribution is inextricably tied with


international trade, multinational manufacturing and sourcing of raw
materials, components, and supplies. Physical distribution has become
considerably more complex, more costly, and as a result, more important for
the success of a firm. A variety of factors contribute to the increased
complexity and cost of global logistics, as compared to domestic logistics
Shipping - Shipping is an international activity perpetually exposed to change in the
international environment
➢ It is subjected to periodic cycles of depression and buoyancy in business
➢ The highly capital intensive nature of the industry necessitates
1. Large financial resources
2. Adequate utilization of capacity
➢ The efficiency of shipping services and their cost depend mainly on the available port
facilities.

Inventory Control - Inventory control involves the procurement, care and disposition of
materials. There are three kinds of inventory
 Raw materials the materials, parts and components that have been delivered to an
organization, but are not yet being used
 In-process or semi-finished goods materials that have started, but not yet finished their
journey through the production process.
 Finished goods goods that have finished the process and are waiting to be shipped out to
customers
Warehousing - Warehousing is an essential part of product distribution.
When a product is produced and exported to another country there arises a
need for warehousing before making the final distribution of the product.
These days companies are involved in international operation it may like
store the items whose demand is likely to rise in future.
Materials Handling- The work in a warehouse moves materials from one
location to another. Everything has to be taken from delivery vehicles,
moved around the warehouse often several times and eventually put onto
departing vehicles. The activities involved form part of materials handling.
Every time an item is moved its costs money, takes time, and gives an
opportunity for damage or mistake. Efficient warehouses reduce the
amount of movement to a minimum, and make the necessary movements
as efficient as possible.
Hitachi’s History
Hitachi was founded in 1910 by
electrical engineer Namihei
Odaira in Ibaraki Prefecture.
The company'sfirst product was
Japan's first 4-kilowatt (5 hp)
induction motor, initially
developed for use in copper
mining. Thecompany began as
an in-house venture of
Fusanosuke Kuhara's
mining company in Hitachi,
Ibaraki
Hitachi’s Mission, Vision
and Values
Mission is to contribute to society
through the continuous development of
superior rail transport solutions.
Vision is that we will be a respected
leading player with impact across the
European rail industry.
Values inform us how we go about our
work, these are taken from our parent
company, Hitachi, Ltd:
Hitachi International
Logistic
• The smartphones and social networks as well as advances in digital
technologies like artificial intelligence and block chain, the penetration of
smart technology into society has been proceeding at an astonishing pace
over recent years.
• The activities with commercial transactions involving music, books, and
currencies, etc., which in the past took place in physical space (the real
world), are increasingly being replaced by cyberspace (the online world).
• In pursuing the quality and convenience of logistics, the growing
complexity of the operating sites that support logistics is beginning to put it
under strain in every market, with “working style reform” becoming a
major social problem
• The global logistics proposed by Hitachi for bringing innovation to the value
chain aims to achieve end-to-end (E2E) optimization to improve
convenience and deal with this complexity and difficulty
Challenges for Logistics
and Hitachi Initiatives
• Japan is currently going through a period of major change in its social
circumstances and environment.
• The chronic labor shortages as a result of continued aging of the population
and a low birthrate, consumers are also seeking ever greater convenience
through electronic commerce (e-commerce). Meanwhile the public
adoption of the Internet is shortening the product lifecycle, including
certain products that experience sudden bursts in popularity only to go out
of fashion just as quickly.

These changes in the social environment and the


challenges they pose for manufacturing and
logistics have been collated in terms of global
production and the global market, e-commerce,
distribution centers, transportation and small
package delivery, and consumers
Changes in Social Environment and Challenges in Production and Logistics
Expansion of global logistic
The term “global logistics” is used to mean the flow of goods between sites for
the procurement of raw materials and parts, production, distribution and
retailing, and consumption, which are traded globally beyond borders.
Role – reversal of the online
and real worlds
The online and real worlds is opening up new aspects of the international
logistics market, bringing a transformation all along the flow from
companies to consumers. In retail, competition in e-commerce is growing
worldwide, with instances in which the sales hierarchy of real-world and
online stores is being overturned.
Fusion and information coordination
between Manufacturing, Distribution, and
Retail

• Advances in digital technology mean that methods are being implemented


whereby sales figures and customer information held by retailers are disclosed
in advance to the upstream wholesalers and manufacturers, and used together
with predictions to determine the volume of incoming and outgoing orders.
• It is possible to minimize loss and unnecessary work, eliminating inventory at
all steps along the supply chain and reducing waste or loss of freshness due to
overproduction, by acquiring critical information that influences supply and
demand from end to end, including information on what might generate
demand and on what might constrain supply.
• Methods used to achieve this in the past have included marketing promotions
to control demand, demand forecasting based on product sales figures, and
various types of causal data and factors influencing sales.
Future outlook
New effective solution for efficiently “delivering the required goods in the
required quantities to the required people and at the required time” in a super
smart society is to know in advance what will be “required,” and to store
inventory at an appropriate location. To achieve this, it is vital that, along with
the manufacturers who produce the goods and the retailers who deal with
customers, the distributors (intermediaries) who stand in between them and
balance supply and demand are also included, and that the various parties
share information with each other.
Conclusion
This project has described how the logistics sites that support the
distribution of goods are facing many challenges, such as the wider adoption
of International Business, in a modern society that is striving to transform
itself into a super smart society. In response, Hitachi is working to develop
global logistics services that bring innovation to the value chain by utilizing
the latest digital technologies

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