Download - Mngmnt of Logistics

8/6/2019 Mngmnt of Logistics

1/80

MATERIAL HANDLING


2/80

Material handling is the taking care of material.

The material handling is undertaken at every

stage of logistics activity and is an integral part

of the other elements of logistics function. Itstarts from receiving of the raw material to the

sending of finished goods to the customers.


3/80

Flow chart of movement of materials in

a production unit

storage productionunit

storage

Temporarystorage of

Semi-finishedproduct

Finishing work atAnother unit

receipt

transport

vendor

despatch

transport

CustomerDealerWarehouse


4/80

Receipt & Despatch

RECEIPT

Receipt of trucks ,ships, rails etc in a nominated area orlocation.

Unloading of individual truck , wagon or ship. Storage of the goods unloaded. Weighment of the goods. Sampling of the materials received. Documentation for receipt of goods. Documentation for storage of goods. Communication to all concerned about the receipt of

goods.


5/80

Despatch

Receipt of trucks ,ships, rails etc in a nominatedarea or location.

Weighment of the goods.

loading of individual truck , wagon or ship. Storage of the goods to ensure uninterrupted

loading.

Sampling of the goods that are loaded.

Documentation of despatches, storage,weighment, & samples.

Communication to all concerned about thedespatch of goods.


6/80

Activities performed under material

handling

The loading & unloading of trucks, wagons or

ships.

Waiting space for trucks, wagons or ships.

Adequate storage space.

Weighment facilities.

Sampling facilities.

Documentation & communication system.


7/80

Handling Methods

Type of material to be used.

Volume

If the process not going to be changed overtime than automation handling equipments can

be used.

The handling methods also depends upon on

labour shortage.


8/80


9/80

Principles & Guideline for handling

System

All the unnecessary of handling of material to

be avoided

The material should be handle in the largest

possible load by the quickest means over the

shortest route.

Handling to be done with least amount of

damage The material must be handled at least possible

cost


10/80

The handling method & equipments must be

of proper standards.

Automation must include in handling process.

Those methods & equipments should be used

which can perform a variety of tasks.

The methods and equipments selected must

make the system safe.


11/80

Ware housing

Ware house :It is the location with adequate

facilities where volume shipments are received

from the production section, broken down,

reassemble into combination , representing aparticular order and shipped to customers

location or locations.


12/80

Need of the Warehouse

To ensure the protection against delays &

uncertainties in transportation

Eliminating the uncertainties in the availability

of product at desired time and place.

Providing adjustment between the time of

production & time of use.

Act as a store for goods, receiving surplusgoods when production exceeds demands &

releasing them when supply reduces.


13/80

Types of warehouses

1. Private Warehouse : a warehouse owned

by a company making its own goods.

2. Public Warehouse : a ware house may be

operated by another organisation, including a

government agency and only used by

company o certain terms and conditions .


14/80

Advantage ofPrivate Warehouses

Private warehouses offers better control over themovement & storage of the products as required bymanagement from time to time.

There is less likelihood of errors in the case warehouse

since the companies products are handled by its ownemployers

A special design of warehouse facilities for automatedhandling, may lead to a reduction in the handling cost.This may not be present in public warehouse.

In some location for certain products and material, thepublic warehouse may not available, the only, possible isthe establishment of private warehouses.


15/80

Advantages ofPublic warehouses

It is generally less expensive

They are usually immediately available

The fixed cost of warehouse are distributedamong many users, therefore the overall cost

of warehouses per unit works out to be lower

figure.

Public warehouses facilities can be given upas soon as necessary without any additional

liability on the part of the user.


16/80

Warehouse Cost

Cost of buying the site

Cost of buying the furniture

Repair and maintenance cost Depreciation of building & equipment

Insurance


17/80

Warehouse Operations (Functions)

Receiving of goods (Raw material/semi-

finished/finished goods).

Indentifying the goods(giving particular number to

the goods).

sorting of the goods(to store at particular area).

Holding of the goods( to store at proper protection).

Dispatching of goods.

Preparing records .


18/80

Warehouse Location

Market service area.

Satisfaction of transport requirements and

facilities available in the form of rails, roads &

vehicles etc.

Transportation rates prevailing in the area and

distribution cost per unit area

Competition from the competitors means thatwhether they have warehouses in the same

area or not


19/80

Availability of power, water, gas etc. & their

cost

Labour supply labour cost in that area

Real estate, excise, Govt. taxes, subsides in

that area

Potential of further expansion

----Attitude of local residents & Govt. towardsestablishment of warehouse.

Cost of land for warehouse.


20/80

Insurance And Claim Procedure

Insurance is process of making arrangement

with an insurance company for the payment of

sum of money in the event of loss, injury or

accident. Type of Insurance are:

Insurance against life

Insurance against Risks such as fire, loss by

robbery, strikes and civil commotion. Marine Insurance

Insurance against third parties


21/80

Claim Procedures

Imported consignments

Indigenous consignments


22/80

Marine Insurance Policy

A policy is obtained to cover approximate

value of a consignment to be received by sea,

air and post in a year plus 70% of the value to

cover custom duty , freight and other overheadexpenses.


23/80

Monthly statement regarding shipment receipt

are send to the insurance with the following

particulars

Purchase case number and date

Number of packages

The name of vessel

The port of shipment

The sum to be insured in Indian currency


24/80

On receiving the monthly statement, the

insurance company calculates the premium

account to be paid and send the bill. On

receiving the payment, certificate is issusedindicating that consignments are insured.


25/80

Imported consignments

Carriers are bound to delivered the goods in

condition in which they were tendered for

carrige. They are liable to make the loss or

damage occurring while the consignment isunder their custody.


26/80

When cargo is discharge, the consignee mustexamine the goods thoroughly. If there is anyloss or damage, an application to the

steamers agent must be made for the surveyand this survey must be conducted within 3days from the date of landing of goods. Incase the steamer survey is not granted by thesteamer agent, the reply to that must beobtained from the steamer agent by theconsignee.


27/80

Filling claims with carriers

As soon as steamer survey report is obtained, the claimfor the loss or damage must be preferred, supported bythe following documents.

Claim bill in triplicate (3 copies).

Invoice and Packing list.

Bill of lading.

steamer survey report .

landing remark certificate from the Port Trust.claim is to be settled with in one year

from the date of arrival of streamer.


28/80

Filling claims with insurance

company

. If the claim is not settled within the 6 months withthe steamer agents then it should be brought in the

notice of insurance company The documents to be

sent to the insurance company are : 1. bill of lading

2. invoice and packing list

3. Correspondence with streamer agents 4. survey reports


29/80

If the consignment is landed but missing in docks, a claimmust be put against the Port Trust andLanded But MissingCertificate should be obtained. The insurance company should

be achieved immediately with the following documents:-

Name of the streamer

Bill of lading (their number and date)

No. of packages missing.

Marks and numbers.

Policy number

Invoice value

Date of discharge


30/80

Claims for packages in sound

condition

If consignment is received in sound condition but ifthere is a shortage then the consignee mustimmediately refer the matter to the supplier to make

proper loss. Such cases should be surveyed if the lossis to be more than Rs.500. As soon as the liability isadmitted by the supplier, the consignee mustwithdraw the claim put with the insurance company.Consignee must immediately put a claim with the

custom authorities for the refund of appropriatecustom duty. Claim to be put within six months forrefund of appropriate custom duty.


31/80

Claims for air consignments

Airlines are responsible for the loss and

damage to the goods under their custodies.

The rest of the steps of the claim are same as

of steamer agent.


32/80


33/80

Copy of bill of entry.

Customs examine certificate.

Official stamp of survey fee paid.

A copy of the bill of lading.

Invoice and packing list.

Insurance certificate.

Documents showing the exact value of loss.Payment of claims is made by Indian

Insurance Companies only in Indian currency.


34/80

Generally the claim against insurance

company in respect to imported consignments

may be categorised as follows:

1. claim for damages.

2. claim for shortages.

3. claim for short landed consignments.

4. claim for landed but missing consignments.


35/80

Indigenous Consignments

In this ,action has to be initiated in the same way asfor imported consignments. The supportingdocuments to be furnished to the insurance company

are: Invoice .

Certificate of the loss obtained from the carrier.

Survey report.

Official stamps receipt from the surveyors . Insurance particulars such as policy number.

Documents showing the exact value of loss.


36/80

In case of the claims with the railways it should

be put within the 6 months from the date of

railway receipt as laid down in section 78 B of

Indian Railways Act. If the entire consignmentis not receipt at the destination from over2

months after the date of booking, the

consignee should write to the railways under

whose zone the destination station is situated.


37/80

If the consignment is received in damage or in

open condition, the consignee should asked

for the open delivery assessment to the Chief

Commercial Superintendent of the destinationrailway for the survey. The Chief Commercial

Superintendent will have to give the survey

report with the 3 days.


38/80

Freight Rate Structure

Freight rates for any mode of transport are

based on the following principles:

Fixed cost.

Variable cost

Public use (material for public daily use will be

carried at lower rates than others)

Government policy Reasonable profit


39/80

Booking of goods by Road

Forwarding note : This contain the information on

the consignor & consignee,

originating & destination address ,

nature of goods & their quantity,

selected route for despatch,

packing condition


40/80

The carrier is supposed to examine the

forwarding note and the nature of goods

offered for despatch , work out the distance he

would have to cover to deliver the goods andquote a freight rate for transport. If this rate

and other conditions given by carrier are

accepatable to the owner of the goods, the

forwarding note is accepted by the carrier anda contract is deemed to have been arrived at.


41/80

Goods Consignment Note : this note is

issued by carrier. It gives the details of the

goods accepted for despatch , the rate of

transport charge, the total freight. It alsomentions whether transport charges are pre-

paid or payable at destination. On the back of

this note terms and conditions are printed ,

taken from Common Carrier Act 1880


42/80

Selection of a Carrier

Constitution of the carrier firm.

Carriers business turnover.

Carriers area of operation.

Carriers branch offices. Number of truck owned by Carrier.

The name of clients currently served by Carrier.

Normal transit time.

References from other companies. Expedition with which claims for damages/shortages etc are settled.

The nature and value of the contracts with other companies


43/80


44/80

In deciding the claim for damages, a carrier gets thebenefits of any insurance that may have been takenby the owner of goods.

The value of goods to be paid is equals to actualvalue of the goods or their invoiced value, or thatwritten in the dispatch documents.

The storage of the goods in Transporters warehouse

is at the owners cost expect when the negligence ofthe carrier is proved. The carrier is authorized torecover the cost of repairs, expect when thenegligence of the carrier is proved.


45/80

Freight rate Structure

(Rail transport)

1.Class Rates:- In this commodities are classifiedinto different classes. The class rates per quintal forcertain distances are fixed These rates are less for thelonger distances.

2.Special rates:- These are the subsidy rates fordefense material, exist at subsided rates.

3.Station to Station rates:- They are fixed rates to

meet the competition from other sources oftransportation. There is no reduction in the first 150km. Also there is no reduction in the rates forpetroleum and other hydrocarbons oils.


46/80


(Air transport)

General Cargo Rates (GCR):- These are the rateswhich are fixed or weight upto 45 kgs.

Class rates :- discounted rates for certain classifieditems. E.g. valuable cargo, live animals etc.

Specify commodity rates:- These are the heavilydiscounted rates applicable directly between two pointsfor e.g. Delhi to Frankfurt , Delhi to Sri Lanka.

Govt. Mandatory Rates:- These rates offer incentives

to export of certain commodities. For e.g. Indian Govt.has directed low rates for the export of leather from Indiato various countries in Europe and for USA also.


47/80


(Sea transport)

Factors while making tariff structure

character of cargo.

Volume of cargo

Availability of cargo

Competition from other carriers

distance

fix charges Insurance

port charges/facilities


48/80

Factors that must be considered

before Exporting goods by Sea

1. Packaging : following things should be in

mind :

Packaging to be of minimum dimensions

There should be optimum utilization of space

within the package.

Goods with different freight rate should not be

packed together in a one package.


49/80

Marking :

company name .

location to send

quantity

the serial no. of each pacakage out of total

number .

Import/export licence number.

The country of origin


50/80

Freight broker: He furnished the following

things:-

Name of the shipper

Quantity & description of the cargo

Part of shipment

Port of destination

Name of the ship in which he seeks space.


51/80

Clearing & forwarding Agent:- These

persons give assistance in processing the

custom documents. They pay EXIM duty on

the behalf of shipper.


52/80

Bill of lading:- It includes the following:-

Name of the ship

Nationality

Shipper's Names

Marks & No. of packaging

Description of goods

Weight of goods Freight rates (Total)

Measurement of goods.


53/80

Import of goods by Sea

When an import cargo expected, the copy of bill of

lading, invoice, packing list etc. are received from

the shipper in advance by clearing & forwarding

agents who process the custom document & pay thecustom duties and also obtained a delivery order

from shipping company and clears the goods from

the post after paying port charges & delivers the

goods to the importer at the destination.


54/80

Claims

Under Indian carry of Goods by sea Act

1925),claims are to be settled in one year from

the date of their landing. The claim for the

partial loss or damage or short landing is givento consignee or to clearing & forwarding

agents in writing, requesting the shipping

company for the survey. The survey should be

done within the three days of landing.


55/80

CHARTERING

A merchant who want so ship large amount,

particularly if in bulk, would charter or hire a

tramp ship. The merchant or organization who

hires the ship is referred to as the charterer.The formal contract drawn up between the

ship owner and the charterer is known as the

charter party.


56/80

Kinds of Charter

Time Charter

The ship is chartered as a functioning operating

unit or a period of time. The charterer pays the

hire money and the ship transport cargowherever the charterer wishes.

Voyage Charter

The ship is chartered to carry on specifiedvoyage between places.


57/80

Demise Charter

Normally a ship owner or prospective ship

owner prefer this method. The charterer will

have to equip the ship with personnel, fuel andother necessaries and operate the ship. This

charter is usually for a long period say for

about five years or more.


58/80

CharterParty

After the terms have been agreed upon, the

documents called the charter party is drawn

up. The different types of charter party

arrangements determine the distribution ofresponsibilities and items of costs between

ship-owners and charterers.


59/80

The charter hire depends on the duration of thecharter. The owners have to pay fordepreciation, insurance, survey and brokerage,if any, unless otherwise agreed. The charterershave to pay for wages, maintenance andrepairs, stores, supplies and equipment,lubricating oil, water, insurance and survey(unless otherwise agreed), overhead charges,

fuel, port charges, cleaning of holds,commissions on cargo, brokerage and claims.The freight depends on the quantity of cargo.


60/80

STRUCTURE OF STANDARD TIME

CHARTER FORM Date, Name and Address of Ship owners and

charterer.

Description of Ship-Name, where registered,

capacities, speed, fuel consumption, etc. Condition of ship.

Trading limits.

Hire money, how paid, what currency to beused, and when payments are to made.

Date hire commence and date completed


61/80

Where hire commences

Agreement on charterers right to complain and

perhaps remove master or chief engineer.

Clauses concerning strikes, war, etc.

How arbitration should be organized in the

event of a dispute.

STRUCTURE OF STANDARD


62/80

STRUCTURE OF STANDARD

VOYAGE CHARTER FORM Date, name and address of ship owner and charter. Description of ship name and where' registered, capacities,

relevant to the cargo in question.

Name of goods to be shipped and in what manner.

Name of loading and discharging ports. Details of routes to be followed.

Date, vessel is to arrive at the loading port.

The freight rate and currency.

How the problems of strikes, ice congestion in ports, are tobe settled.

Arbitration clause.


63/80

LINEAR CONFERENCE

A linear conference is a group of two or more

vessels operating carriers which provides

international linear services for the carriage of

cargo on a particular route or routes with inspecified geographical limits on uniform or

common freight rates and on other mutually

agreed conditions.


64/80

A linear service provides

Regularity of sailings to scheduled ports .

Stability of freight rates.

Coverage of wide range of ports .

Rebates on rates .

Uniform rates for all shippers.


65/80

Norms & Practices

Deferred Rebate system :-(If he is using the

vessels of the member lines of the conference then

he get the rebates 10% of

for 3-6 month. The Dual rate system :- If a shipper sign a contract

with conference to protect, They get bereft of rates

which are lower than other non-contractors.

Immediate Rebate system :- Contract shipper aregiven cash or immediate rebate (9.5%) of freight on

shipment of their cargo.


66/80

Basic product requirement for a


67/80

Basic product requirement for a

container are

It must have an airtight and water tight outer

shell & flooring

It must have sufficient strength to withstand.

It must have internal lining which can becleaned easily and does not buckle with

temperature changes.

It should not absorb moisture.

It must have such a construction as allows easy

circulation of air around the cargo.


68/80

Types of container

Conventional enclosed containers.

Insulated and ventilated containers.

Refrigerated containers.

Open top containers.

Open sided containers.


69/80

Advantages

Reduces loss and damage claims.

It gives door to door pick up & delivery service.

It eliminates multiple handling of cargo , for the

container is handled as a unit.

Improvement relating to handling, marketing and

pattern of packaging is made possible by the

container.

Cost of packaging gets reduces.

Containers can be used as an efficient storage

system till the goods are finally used.

Infrastructure for


70/80

Infrastructure for

containerisation

Modernisation of ports.

Inland depots .(dry ports)

Customs procedure.

Insurance

Mechanised handling of Containers.

Cranes.

Lifts

Interstate tariffs and


71/80

Interstate tariffs and

documentation

Intra state movement of goods : In India we

have a regulated intra state transport. These

regulations try to manage the transportation

system within the state. All the state authoritiesare committed to provide adequate, well co-

ordinated, economical and efficient

transportation services to the people of the

state. In this the regulations may be based onvehicle size, rates and routes.


72/80

In India the state Govt. try to regulate the

documentation system by dividing the vehicles

into various categories.

Heavy Weight Vehicles : Wt. more than 12000kgs.

Light Weight Vehicles : Wt. less than 7500 kgs.

Medium Weight Vehicles : Wt. between 7500 to

12000 kgs.


73/80

The vehicles in order to transport goods within a

state need to follow the following procedure.

Apply to the District Transport Office for permit with

the vehicle registration card (Form No. 26) .

Clarify the purpose of transport vehicle.

Deposit form and fees with the district transport

office. DTO will issue the permit under the form 32/33 that

is known as Temporary Permit.

Thus the intra state transport requires a permit & that

is known as Temporary Permit.


74/80

Temporary Permit (SEC-87)

A regional transport authority and the state transport

authority may without following the procedure as

laid down in section 80, grants permits to be effective

for a limited period which, shall not exceed 4months, to authorize the use transport vehicles

temporary.

For the convenience of passengers on special

occasions such as religious gatherings.

For the purpose of seasonal business.

To meet a particulars temporary need.


75/80

Provided that the regional transport authority

or state transport authority in case of goods

carriages under circumtances of special

nature, a permit for a exceeding 4 month butnot more than a year.


76/80

Inter State movement of goods

It means when we are sending our goods from

one state to another and for that we require a

document that is known as National Permit.

National Permit:-It means a permit granted byappropriate authority for carrying the goods from

one state to another.

An Application for National Permit (Sce-86):-An

application for the grant of National Permit forthe registration are submitted to registering

authority in the following way:-

Form Contents and duration of


77/80

Form Contents and duration of

Authorization (Sec-87) a) An application for the grant of authorization for

National Permit shall be made in the form-46 and shall

be deposit with a fee ofRs.500 per annum in the form

of bank draft.

b) Every authorization shall be granted in the form-47.

The authority which granted the authorization shall

inform the state transport authorities concerned , of the

registration number of vehicle, the name and theaddress of the permit holder and the period for which

they said authorization is valid.

c) The period of validity of authorization shall not

exceed one year at a time.

Age of vehicle for the purpose of


78/80

Age of vehicle for the purpose of

National Permit

No National permit shall be granted in respect

of goods carriage which is more than 12 years

old at any point of time.

No. National permit shall be granted for a multiaxel goods carriage which is more than 15

years old at any point of time.

Quarterly return to be filled by a national

permit holder in form No. 49 to the authority

which granted the national permit.

Additional conditions for National


79/80

Additional conditions for National

Permit (Section 90) 1. The vehicle under national permit shall be painted in dry

leaf brown color with 30 cms board white board and the

words "National Permit" shall be there on the both sides of the

vehicle in bold letters within a circle of 60cm diameter.

2. A board with words "National Permit valid in the states of

...................." with blue letters on white back ground shall be

carried in the front top of such vehicle.

3. No such vehicle shall carry any goods without a bill of

lading.

4. The vehicle shall have minimum of 2 drivers and shall be

provided with a seat across its full width behind the driver seat

providing the facility for the spare driver to stretch himself

and sleep.


80/80

5. The vehicle must have the following documents and

shall be produced on demand by an officer, namely

given below.

Certificate of fitness Certificate of Insurance

Certificate ofRegistration

National Permit

Taxation

6.The vehicle shall be subject to fulfill all local rules or

restriction as imposed by the State Government.