Logistics

LOG i STICS

A glimpse…

Logistics originated in the military's need to supply themselves with arms, ammunition and rations as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistikas’ who were responsible for financial and supply distribution matters.The term "logistics" originates from the ancient Greek "λόγος" ("logos"—"ratio, word, calculation, reason, speech, oration").

http://en.wikipedia.org/wiki/Ancient_Greek

Supply Chain Management

•suppliers ( and their suppliers), •consumers (and their consumers), •manufacturing centers, warehouses,• distribution centers, •and the retail outlets, •as well as raw materials, work-in-process inventory, and finished products that flow between facilities

Four Pillars• Procurement• Demand and Replenishment • Customer Service• 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

“Ensuring availability of the right product in the right quantity, and of right condition at the

right place, at the right time, for the right customer, at the right

cost”- Council of Logistics Management

Main Objective

Consumers

Manufacturing

Supplier

Supplier

Warehouse

RetailersDistributors

A Typical Supply Chain

Client

Vendor A

Vendor C

Vendor D

- Receiving- Quality Assurance- Storage- Production- Picking/Packing

Customer A

Customer B

Customer C

Forwarders/Brokers/Truckers

Forwarders/Brokers/Truckers

Current Logistics Practice

• Warehousing• Materials Handling• Inventory Management• Transportation and Distribution

Logistical Operations

A warehouse is a place for storage or any space or area that is used to keep materials, goods,

products, and other items for a period of time until finally withdrawn, used, transferred or sold.

It is also described as a place where things kept are protected from elements and safe guarded from

losses

What is a Warehouse?

•To receive materials and supplies in accordance with proper documentation procedures and in conformance with specified quality.•To plan and provide adequate storage space for goods•To keep storage of goods in accordance with efficient warehousing practices including ease of order picking•To undertake measures to protect stocks from damage, pilferage, and unauthorized movements•To implement a system of reconciling inventory records with actual physical stock•To issue and transfer materials and goods in conformance with set documentation procedures•To assist in the effective and efficient disposal of scrap/surplus items by identifying, collecting, and segregating these items for easier disposal.

Major Objectives of Warehousing

What is Materials Handling?

From an engineering point of view, it is the art and science involving the moving, packaging, and storing of substances in any form.

From the logistics management point of view, it is the portion of the business system which affects the relationship of material and packaging to the product, facility, or customer without adding usable worth or changing the nature of the product.

• Motion• Time• Place• Quantity• Space

Elements of Materials Handling

Objectives of Materials Handling

Reduced Cost-Lower Inventory and production control

costs-Better space utilization/ reduce demurrage-Shorter production time cycle

Reduce Waste-Less Spoilage-Less damage by improper handling

Increased Productivity Capacity-Assure constant rate of production-Coordinated handling system-Better control of materials-More effective use of manpower-Eliminates production bottlenecks

Improved Working Conditions-Safer working situations-Less fatigue-Upgrading employee to more productive work

Improved Distribution-Quicker delivery to customers-Increased production volume due to lower cost-Cut damage claims.

3Ms of Materials Handling

What

When

Where

Who

How

Material

Movement

Method

Physical Characteristics

Volume

Source & Destination

Scope

Route

Frequency

Speed or Rate

Unit Handled

Equipment

Manpower

Inventory ManagementInventory Management determines the amount of inventory to keep in stock that is how much to order and when to replenish, or order.

Role of Inventory Management in Logistics

•management of inventories to have the right amount and to achieve competitive priorities for the business.

•balance the conflicting cost in keeping inventory to ensure supply versus stock-out issue that affects revenue and customer service.

Transportation and Delivery

it provides service operation which moves materials and goods between each process in the link and between links in the supply chain to obtain cost efficient transport route from supplier to factory and factory to customer.

supplier storage plant warehouse customers

RM SupplyPoint RM Storage Manufacturing FG Storage Markets

Movement/transport

Movement/transport

Movement/transport

Movement/transport

Movement/ Transportation Sytem

Distributionis the coordination and management of the movement, inventory, protection and storage of finished goods from the end of production line to the customers to achieve timely and cost effective service level. It aims to minimize cost involved in physically moving and storing products from its production point to the point where it is purchased by customer, while maintaining customer service level

Manufacturingplant

Raw materialssupply point

Raw materialssupply point

MarketCustomer

MarketCustomer

MarketCustomer

Simple Distribution System

ManufacturingPlant

ManufacturingPlant

ManufacturingPlant

Raw MaterialsSupply point




warehouse

warehouse

warehouse

warehouse

wholesaler

wholesaler

wholesaler

wholesaler

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

retailer

Complex Distribution System

QuizQuiz• Define supply chain (3points)Define supply chain (3points)• 4 pillars of supply chain4 pillars of supply chain• 7 Rs7 Rs• 3M’S of Material Handling3M’S of Material Handling• 5 elements of Material Handling5 elements of Material Handling• 3 types of material inventory3 types of material inventory

Logistics

Business

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