Black Book a Study of Fishery Industry in Mumbai

5/20/2018 Black Book a Study of Fishery Industry in Mumbai

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INTRODUCTION TO LOGISTICS

DEFINATION AND MEANING:

TheOxford English Dictionarydefines logistics as "the branch ofmilitary sciencerelating to procuring,

maintaining and transporting material, personnel and facilities." However, theNew Oxford American

Dictionarydefines logistics as "the detailed coordination of a complex operation involving many people,

facilities, or supplies," and the Oxford Dictionary on-line defines it as "the detailed organization and

implementation of a complex operation. As such, logistics is commonly seen as a branch ofengineering

that creates "people systems" rather than "machine systems."

According to the Council of Logistics Management, logistics includes the integrated planning, control,

realization, and monitoring of all internal and network-wide material, part, and product flow, including

the necessary information flow, industrial and trading companies along the complete value-added chain

(and product life cycle) for the purpose of conforming to customer requirements.

Logistics is the process of planning, implementing, and controlling the effective and efficient flow of

goods and services from the point of origin to the point of consumption

Logisticsis themanagementof the flow of goods between the point of origin and the point of

consumption in order to meet some requirements, of customers or corporations. The resources managed in

logistics can include physical items, such as food, materials, animals, equipment and liquids, as well as

abstract items, such as time, information, particles, and energy. The logistics of physical items usually

involves the integration of information flow,material handling,production,packaging,inventory,

transportation,warehousing,and oftensecurity.The complexity of logistics can be modeled, analyzed,

visualized, and optimized by dedicatedsimulation software.The minimization of the use of resources is a

common motivation in logistics for import and export

Logistics, in its most basic definition, is the efficient flow and storage of goods from their point of originto the point of consumption. It is the part of the supply chain process that plans, implements and controls

the flow of goods. It can also be seen as the management ofinventory,in rest or in motion. The word

logisticswas first used in the military service to describe the process of supplying a war zone with troops,

supplies and equipment. The term is now used more commonly in the field of business.

Logistics viewpoints:

Inbound logisticsis one of the primary processes of logistics, concentrating on purchasing and arranging

the inbound movement of materials, parts, and/or finished inventory from suppliers to manufacturing or

assembly plants, warehouses, or retail stores.

Outbound logisticsis the process related to the storage and movement of the final product and the related

information flows from the end of the production line to the end user
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Logistics fields:

Given the services performed by logisticians, the main fields of logistics can be broken down as follows:

Procurement logistics

Production logistics

Distribution logistics

After-sales logistics

Disposal logistics

Reverse logistics

Green logistics

Global logistics

Domestics logistics

Concierge Service

RAM logistics

Procurement logisticsconsists of activities such asmarket research,requirements planning, make-or-buy

decisions, supplier management, ordering, and order controlling. The targets in procurement logistics

might be contradictory: maximizing efficiency by concentrating on core competences, outsourcing while

maintaining the autonomy of the company, or minimizing procurement costs while maximizing security

within the supply process.

Production logisticsconnects procurement to distribution logistics. Its main function is to use available

production capacities to produce the products needed in distribution logistics. Production logistics

activities are related to organizational concepts, layout planning, production planning, and control.

Distribution logisticshas, as main tasks, the delivery of the finished products to the customer. It consists

of order processing, warehousing, and transportation. Distribution logistics is necessary because the time,

place, and quantity of production differs with the time, place, and quantity of consumption.

Disposal logisticshas as its main function to reduce logistics cost(s) and enhance service(s) related to the

disposal of waste produced during the operation of a business.

Reverse logisticsdenotes all those operations related to the reuse of products and materials. The reverse

logistics process includes the management and the sale of surpluses, as well as products being returned to

vendors from buyers. Reverse logistics stands for all operations related to the reuse of products and

materials. It is "the process of planning, implementing, and controlling the efficient, cost effective flow of

raw materials, in-process inventory, finished goods and related information from the point of consumption

to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse
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logistics is the process of moving goods from their typical final destination for the purpose of capturing

value, or proper disposal. The opposite of reverse logistics is forward logistics.

Green Logisticsdescribes all attempts to measure and minimize the ecological impact of logistics

activities. This includes all activities of the forward and reverse flows. This can be achieved through

intermodal freight transport,path optimization, vehicle saturation andcity logistics.

RAM Logistics(see alsoLogistic engineering)combines both business logisticsand military logistics

since it is concerned with highly complicated technological systems for whichReliability,Availability

andMaintainabilityare essential, ex: telecommunication systems and military supercomputers
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Emergency logistics:

Emergency logistics is a term used by the logistics, supply chain, and manufacturing industries to denote

specific time-critical modes of transport used to move goods or objects rapidly in the event of an

emergency.[6]The reason for enlisting emergency logistics services could be a production delay or

anticipated production delay, or an urgent need for specialized equipment to prevent events such as

aircraft being grounded (also known as "aircraft on ground"AOG), ships being delayed, or

telecommunications failure. Emergency logistics services are typically sourced from a specialist

provider.[7]

Military logistics:

In military science, maintaining one's supply lines while disrupting those of the enemy is a crucialsome

would say the most crucialelement ofmilitary strategy,since an armed force without resources and

transportation is defenseless. The defeat of the British in theAmerican War of Independenceand the

defeat of the Axis in the African theater ofWorld War IIare attributed by some scholars to logistical

failures. The historical leadersHannibal Barcia,Alexander the Great,and theDuke of Wellingtonare

considered to have been logistical geniuses.

Military have a significant need for logistics solutions and so have developed advanced implementations.

Integrated Logistics Support(ILS) is a discipline used in military industries to ensure an easily

supportable system with a robust customer service (logistic) concept at the lowest cost and in line with

(often high) reliability, availability, maintainability, and other requirements, as defined for the project.

Inmilitary logistics,logistics officersmanagehow and when to move resources to the places they are

needed. Supply in military logistics often deals with a number of variables in predicting cost,

deterioration,consumption,and future demand. TheUnited States Armed Forces'categoricalsupplyclassificationwas developed in such a way that categories of supply with similar consumption variables

are grouped together for planning purposes. For instance, peacetime consumption of ammunition and fuel

will be considerably lower than wartime consumption of these items, whereas other classes of supply such

as subsistence and clothing have a relatively consistent consumption rate regardless of war or peace.

Some classes of supply have a linear demand relationship: as more troops are added, more supply items

are needed; or as more equipment is used, more fuel and ammunition are consumed. Other classes of

supply must consider a third variable besides usage and quantity: time. As equipment ages, more and

morerepair partsare needed over time, even when usage and quantity stays consistent. By recording and

analyzing these trends over time and applying them to future scenarios, the US Armed Forces can

accurately supply troops with the items necessary at the precise moment they are needed. History has

shown that good logistical planning creates a lean and efficient fighting force. The lack thereof can lead to

a clunky, slow, and ill--equipped force with too much or too little supply equipped force with too much or

too little supply.

Business logistics:
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One definition of business logistics speaks of "having the right item in the right quantity at the right time

at the right place for the right price in the right condition to the right customer. Business logistics

incorporates allindustry sectorsand aims to manage the fruition ofproject life cycles,supply chains,and

resultant efficiencies.

The termbusinesslogistics has evolved since the 1960due to the increasing complexity of supplyingbusinesses with materials and shipping out products in an increasingly globalized supply chain, leading to

a call for professionals called "supply chain logisticians".

In business, logistics may have either an internal focus (inbound logistics) or an external focus (outbound

logistics), covering the flow and storage of materials from point of origin to point of consumption (see

supply-chain management). The main functions of a qualified logistician includeinventory management,

purchasing,transportation,warehousing,consultation, and the organizing andplanningof these activities.

Logisticians combine a professional knowledge of each of these functions to coordinate resources in an

organization.

There are two fundamentally different forms of logistics: one optimizes a steady flow of material through

a network oftransportlinks and storage nodes, while the other coordinates asequenceof resources to

carry out someproject(ex:restructuring a warehouse)
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Nodes of a distribution network

The nodes of a distribution network include:

Factorieswhere products are manufactured or assembled

Adepotor deposit is a standard type of warehouse thought for storing merchandise (high level ofinventory).

Distribution centersare thought fororder processingandorder fulfillment(lower level of inventory) and

also for receiving returning items from clients.

Transit points are built forcross dockingactivities, which consist in reassembling cargo units based on

deliveries scheduled (only moving merchandise).

Traditionalretailstores of theMom and Popvariety, modernsupermarkets,hypermarkets,discount

storesor also voluntary chains,consumer cooperative,groups of consumer withcollective buying power.

Note thatsubsidiarieswill be mostly owned by another company andfranchisers,although using other

company brands, actually own the point of sale.

There maybe someintermediariesoperating for representative matters between nodes such assales

agentsorbrokers.

Logistic families and metrics

A logistic family is a set of products which share a common characteristic: weight and volumetric

characteristics, physical storing needs (temperature, radiation,...), handling needs, order frequency,

package size, etc. The following metrics may be used by the company to organize its products in different

families:

Physical metrics used to evaluate inventory systems include stocking capacity, selectivity, superficial

utilization, volumetric utilization, transport capacity, transport capacity utilization.

Monetary metrics used include space holding costs (building, shelving and services) and handling costs

(people, handling machinery, energy and maintenance).

Other metrics may present themselves in both physical or monetary form, such as the standardInventory

turnover.

Handling and Order Processing
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Unit loads for transportation of luggage at the airport, in this case the unit load has protective function.

Unit loadsare combinations of individual items which are moved by handling systems, usually employing

apalletof nor med dimensions.[17]

Handling systems include: trans-pallet handlers, counterweight handler, retractable mast handler, bilateral

handlers, trilateral handlers,AGVand stacker handlers. Storage systems include: pile stocking,

cellracks(either static or movable), cantilever racks and gravity racks.[18]

Order processingis a sequential process involving: processing withdrawal list, picking (selective removal

of items from loading units), sorting (assembling items based on destination), package formation

(weighting, labeling and packing), order consolidation (gathering packages into loading units for

transportation, control andbill of lading).[19]

Pickingcan be both manual or automated. Manual picking can be both man to goods, i.e. operator using a

cart or conveyor belt, or goods to man, i.e. the operator benefiting from the presence of a mini-

loadASRS,vertical orhorizontal carouselor from an Automatic Vertical Storage System (AVSS).

Automatic picking is done either withdispensersor de palleting robots.

Sortingcan be done manually through carts or conveyor belts, or automatically throughsorters.

Transportation

Cargo, i.e. merchandise being transported, can be moved through a variety of transportation means and is

organized in differentshipment categories.Unit loadsare usually assembled into higher standardized

units such as:ISO containers,swap bodiesorsemi-trailers.Especially for very long distances, product

transportation will likely benefit from using different transportation means:multimodal

transport,intermodal transport(no handling) andcombined transport(minimal road transport).

Operators involved in transportation include: all train, road vehicles, boats, airplanes

companies,couriers,freight forwardersandmulti-modal transport operators.

Merchandise being transported internationally is usually subject to theIncotermsstandards issued by

theInternational Chamber of Commerce.

Configuration and management
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Push-Back rack for motorcycles, aLIFOrack system for storage.

Similarly to production systems, logistic systems need to be properly configured and managed. Actually a

number of methodologies have been directly borrowed fromoperations managementsuch as

usingEconomic Order Quantitymodels for managing inventory in the nodes of the network.Distribution

resource planning(DRP) is similar toMRP,except that it doesn't concern activities inside the nodes of the

network but planning distribution when moving goods through the links of the network.

Traditionally in logistics configurationmay be at the level of the warehouse (node)or at level of the

distribution system (network).

Regarding a single warehouse, besides the issue of designing and building the warehouse, configuration

means solving a number of interrelated technical-economic problems: dimensioningrackcells, choosing

apalletizingmethod (manual or throughrobots), rack dimensioning and design, number of racks, number

and typology of retrieval systems (e.g.stacker cranes). Some important constraints have to be satisfied:

fork and load beams resistance tobendingand proper placement ofsprinklers.Althoughpickingis moreof a tactical planning decision than a configuration problem, it is important to take it into account when

deciding the racks layout inside the warehouse and buying tools such as handlers and motorized carts

since once those decisions are taken they will work as constraints when managing the warehouse, same

reasoning forsortingwhen designing the conveyor system and/or installing automaticdispensers.

Configuration at the level of the distribution system concerns primarily the problem oflocationof the

nodes in a geographic space and distribution ofcapacityamong the nodes. The first may be referred to

asfacility location(with the special case ofsite selection)while the latter to as capacity allocation. The

problem ofoutsourcingtypically arises at this level: the nodes of asupply chainare very rarely owned by

a single enterprise. Distribution networks can be characterized by numbers of levels, namely the number

of intermediary nodes betweensupplierandconsumer:

Direct store delivery,i.e. zero levels

One level network: central warehouse

Two level network: central and peripheral warehouses
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This distinction is more useful for modeling purposes, but it relates also to a tactical decision

regardingsafety stocks:considering a two level network, if safety inventory is kept only in peripheral

warehouses then it is called a dependent system (from suppliers), if safety inventory is distributed among

central and peripheral warehouses it is called an independent system (from suppliers).Transportation from

producer to the second level is called primary transportation, from the second level to consumer is called

secondary transportation.

Although configuring a distribution network from zero is possible, logisticians usually have to deal with

restructuring existing networks due to presence of an array of factors: changing demand, product or

process innovation, opportunities for outsourcing, change of government policy towardtrade barriers,

innovation in transportation means (bothvehiclesorthoroughfares), introduction ofregulations(notably

those regardingpollution)and availability of ICT supporting systems (e.g.ERPore-commerce).

Once a logistic system is configured, management, meaning tactical decisions, takes place, once again, at

the level of the warehouse and of the distribution network. Decisions have to be made under a set

ofconstraints:internal, such as using the available infrastructure, or external, such as complying with

given productshelf lifesandexpiration dates.

At the warehouse level, the logistician must decide how to distribute merchandise over the racks. Three

basic situations are traditionally considered: shared storage, dedicated storage (rack space reserved for

specific merchandise) and class based storage (class meaning merchandise organized in different areas

according to their access index).

Airline logistic network. Note howDenverworks ashubin the network.

Pickingefficiency varies greatly depending on the situation For man to goods situation, a distinction is

carried out between high level picking (vertical component significant) and low level picking (vertical

component insignificant). A number of tactical decisions regarding picking must be made:

Routing path: standard alternatives include transversal routing, return routing, midpoint routing andlargest gap return routing

Replenishment method: standard alternatives include equal space supply for each product class and equal

time supply for each product class.

Picking logic: order picking vs. batch picking
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At the level of the distribution network, tactical decisions involve mainlyinventory

controlanddeliverypath optimization. Note that the logistician may be required to manage thereverse

flowalong with the forward flow.

Warehouse management systems and warehouse control systems

Main articles:Warehouse management systemandWarehouse control system

Although there is some overlap in functionality, warehouse management systems (WMS) can differ

significantly from warehouse control systems (WCS). Simply put, a WMS plans a weekly activity

forecast based on such factors as statistics and trends, whereas a WCS acts like a floor supervisor,

working in real time to get the job done by the most effective means. For instance, a WMS can tell the

system that it is going to need five ofstock-keeping unit(SKU) A and five of SKU B hours in advance,

but by the time it acts, other considerations may have come into play or there could be a logjam on a

conveyor. A WCS can prevent that problem by working in real time and adapting to the situation by

making a last-minute decision based on current activity and operational status. Workingsynergistically,

WMS and WCS can resolve these issues and maximizeefficiencyfor companies that rely on the effective

operation of their warehouse or distribution center.[21]

Logistics outsourcing

Logistics outsourcing involves a relationship between a company and an LSP (logistic service provider),

which, compared with basic logistics services, has more customized offerings, encompasses a broad

number of service activities, is characterized by a long-term orientation, and thus has a strategic nature.[22]

Outsourcing does not have to be complete externalization to a LSP, but can also be partial:

A singlecontractfor supplying a specific service on occasion

Creation of aspin-off

Creation of ajoint venture

Third-party logistics(3PL) involves using external organizations to execute logistics activities that have

traditionally been performed within an organization itself.[23]According to this definition, third-party

logistics includes any form of outsourcing of logistics activities previously performed in house. For

example, if a company with its own warehousing facilities decides to employ external transportation, this

would be an example of third-party logistics. Logistics is an emerging business area in many countries.

The concept of a fourth-party logistics(4PL) provider was first defined by Andersen Consulting

(nowAccenture)as an integrator that assembles the resources,planning capabilities, and technology of itsown organization and other organizations to design, build, and run comprehensive supply chain solutions.

Whereas a third-party logistics (3PL) service provider targets a single function, a 4PL targets management

of the entire process. Some have described a 4PL as a general contractor that manages other 3PLs,

truckers, forwarders, custom house agents, and others, essentially taking responsibility of a complete

process for the customer.

Production logistics
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The termproduction logisticsdescribes logistic processes within a value adding system (ex:physical

plantor amine). Production logistics aims to ensure that each machine and workstation receives the right

product in the right quantity and quality at the right time. The concern is not the transportation itself, but

to streamline and control the flow through value-adding processes and to eliminate nonvalue-adding

processes. Production logistics can operate in existing as well as new plants. Manufacturing in an existing

plant is a constantly changing process. Machines are exchanged and new ones added, which gives theopportunity to improve the production logistics system accordingly. Production logistics provides the

means to achieve customer response and capital efficiency.

Production logistics becomes more important with decreasing batch sizes. In many industries (e.g.,mobile

phones), the short-term goal is a batch size of one, allowing even a single customer's demand to be

fulfilled efficiently.Track and tracing,which is an essential part of production logistics due to product

safety and reliability issues, is also gaining importance, especially in

theautomotiveandmedicalindustries.

Logistics management[

Main article:Logistics management

Logistics management is that part of thesupply chainthat plans, implements, and controls 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 customer requirements. A professional

working in the field of logistics management is called a logistician.

Materials management

Channel management

Distribution (or physical distribution)

Supply-chain management

Logistics automation

ASRSused by the U.S. military, also used by business in conjunction with manual picking.

Logistics automationis the application ofcomputer softwareand/orautomatedmachinery to improve the

efficiency of logistics operations. Typically this refers to operations within a warehouse or distribution

center, with broader tasks undertaken by management systemsandenterprise resource planningsystems.

Industrial machinery can typically identify products through eitherBar CodeorRFIDtechnologies.

Information in traditional bar codes is stored as a sequence of black and white bars varying in width,

which when read by laser is translated in a binary sequence, which according to fixed rules can be

converted in a decimal number. Sometimes information in a bar code can be transmitted through radio

frequency, more typically radio transmission is used in RFID tags. An RFID tag is card containing a
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memory chip and an antenna which transmits signals to a reader. RFID may be found on merchandise,

animals, vehicles and people as well.

Logistics: profession and organizations

A logisticianis aprofessionallogistics practitioner. Professional logisticians are often certified by

professional associations. One can either work in a pure logistics company, such as

ashippingline,airport,orfreight forwarder,or within the logistics department of a company. However, as

mentioned above, logistics is a broad field, encompassing procurement, production, distribution, and

disposal activities. Hence, career perspectives are broad as well. A new trend in the industry are the 4PL,

or fourth-party logistics, firms, consulting companies offering logistics services.

Someuniversitiesand academicinstitutionstrain students as logisticians,

offeringundergraduateandpostgraduateprograms. A university with a primary focus on logistics

isKhne Logistics Universityin Hamburg, Germany. It is non profit and supported by Khne-Foundation

of the logistics entrepreneurKlaus Michael Khne.

TheChartered Institute of Logistics and Transport(CILT), established in theUnited Kingdomin 1919,

received aRoyal Charterin 1926. The Chartered Institute is one of theprofessionalor institutions for the

logistics and transport sectors that offersprofessional qualificationsor degrees in logistics management.

CILT programs can be studied at centers around UK, some of which also offer distance learning options.

The institute also have overseas branches namely The Chartered Institute of Logistics & Transport

Australia (CILTA) in Australia and Chartered Institute of Logistics and Transport in Hong Kong

(CILTHK) in Hong Kong.

TheInternational Association of Public Health Logisticians (IAPHL)is a professional network that

promotes the professional development of supply chain managers and others working in the field of public

health logistics and commodity security, with particular focus on developing countries. The association

supports logisticians worldwide by providing a community of practice, where members can network,

exchange ideas, and improve their professional skills.

Logistic families and metrics

A logistic family is a set of products which share a common characteristic: weight and volumetric

characteristics, physical storing needs (temperature, radiation,...), handling needs, order frequency,

package size, etc. The following metrics may be used by the company to organize its products in different

families Physical metrics used to evaluate inventory systems include stocking capacity, selectivity,

superficial utilization, volumetric utilization, transport capacity, transport capacity utilization.

Monetary metrics used include space holding costs (building, shelving and services) and handling costs

(people, handling machinery, energy and maintenance).

Other metrics may present themselves in both physical and monetary form, such as the standardInventory

turnover
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Logistics management:

Logistics Management Definition:

Logistics management is the process of planning, i mp l e me n t i n g , and controlling the efficient,

effective flow and storage of goods, services, and related information from point of origin to point of

consumption for the purpose of conforming to customer requirements

Scope and importance of logistics management:

The scope of logistics management is very wide. It is not confined to manufacturing operations alone. It is

pervasive in all types or organizations whether government or private, wholesalers or retailers

In a manufacturing organization having an integrated structure, activities such as purchasing, production

planning and control, warehousing and inventory control are centralized under materials

management/logistics department and distribution of finished goods is done by marketing department.

Considerable amount of cross-functional co-ordination is required.

-For EG:

Marketing department does the demand forecasting and incoming order processing. Production planning

and control uses this information to plan work schedules and priorities. Again the information regarding

production capacity is utilized by the marketing department to realize and process the delivery of

incoming orders. The receipt of the material bought from the supplier and finished goods sold to the

customers have to be informed to the accounts department for making payment to the supplier and billing

the customers. Thus logistics management includes all these cross functional coordination activities of

material management, production planning and control and physical distribution management including

raw material, semi-finished, finished goods warehousing, inventory and transportation. Binding to these

entire cross functional and coordination activities requires an efficient information system. Logisticsmanagement adds value when inventory is correctly maintained to facilitate sales to meet the customer

demand. Costs:

Logistics expenditure accounts for 13% (2001) of the GNP. Expenditure of individual firms ranges from

5 to 35% of sales. Therefore, logistics though vital to business is quite expensive.

Logistics management requires skillful planning and coordination and control of complex activities as

mentioned below:

Demand forecasting

Distribution communication

Inventory Control

Material Handling

Order Processing

Part & Service Support


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Plant and Warehouse side selection

Procurement

Packaging

Salvage & scrap disposal

Traffic & transportation

Warehousing & Storage

Time & Place Utility

Efficient Movement to Customer

Return goods handling

Customers Service


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CHARACTERISTICS OF LOGISTICS:

Top-notch communication. It may seem fairly obvious but a team that cant communicate well together

cant work well together. Communication is very complex within teams. It involves being able to speak

up assertively when there is a problem and resolve the issue effectively. Listening successfully is also

critical for managers and non-managers alike. Communication allows employees to share ideas that cancontribute to operational standards.

Standardization. Speaking of standardization, set guidelines for operation are a fantastic way to increase

productivity. Having operational standards that are written down allow each team member to know their

assigned roles. Keep in mind that operational standards can be changed. In fact, you should allow

employees to communicate their concerns and contribute to changes in order to more effectively operate.

Reliance on experts. There are obviously experts on your team who have familiarized themselves with

one aspect of your operations. Relying on these individuals to train others is essential. Consult with

experts of any given operation to help you develop standards that can be used throughout the team. For

more information on transportation jobs and freight brokers

Effective cross training. You should allow members of your team to train with experts on areas where

they may not be familiar. Have your drivers sit for an hour with customer service agents, for example, so

that they can get a better idea of how customers are expressing concerns.

Willingness to try new things. This is especially true of logistics and operations. Although its important to

stick with what works when it works, you should always be willing to listen to the latest information

regarding your industry. New technological advancements, for example, may make your operations more

streamlined.

SCOPE

The Scope of Logistics in Business:

a.)Logistics / Supply Chain in a business aim to the following contributions:

- Achieve maximum customer service level

-. Ensure high product quality.

- Achieve minimum (possible) cost.

- Be flexible in the constant market changes.

- Logistics management tries to have the right product, in the right quantity, at the right place, at the

right time, with the right cost.

- Logistics management must balance 2 basic targets:

Quality of Service


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Low Cost


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2.1) FUNCTIONS OF LOGISTICS:

a.)Transportation management:

Transportation enables the means of transfer of inventory given the location & network framework

developed earlier. This involves the selecting the modes of transportation like Air, Water, Rail, Road &

the decisions relating to outsourcing this activities to other agencies

b.)Inventory management:

Inventory management concerns with the decision regarding the amount of type & material stored at

various facility location. These decisions will be affected by the decision made under the function of

facility location & transportation e.g.: the location of warehouse & retail outlets & modes of transport

whether fast or slow will affect the quantity type of material to be stored at facilities location.

c.)Warehousing management:

-Warehousing provide the adequate space for the inventory at the right location, unpack aging, sorting, &

consolidation of material & modification of material elements if required the role of warehouse provide

the economic & service benefit to the logistical system. -Economic benefits: movement

consolidation, break bulk, cross-dock, processing /postpone movement & stock piling.

- Service benefits are spot stocking, assortments, mixing & production supports.

d.)Material handling system: Material handling activities are required while unloading, moving &

loading material at facilities. These include the variety of mechanical equipment like Conveyors, Forklift,

Truck, and Crane. One of the considerations of effective material handling is the minimization of product

damage during handling.

e.)Packaging: -It helps in achieving the objective of maintaining the material in the right conditionthrough the logistics process.

- Packaging decision is impacted by requirement of other activities like protection & facilitation during

transportation, material handing & storage as so ultimately customer requirements.

f.)Information System: -Communication to and fro plays important role in an organisation.

-faster the information, faster the responding time.

-role of technology, fast and accurate information.

-a real time logistics in competitive business.

-role of information, helps in logistical forecasting, order processing and management operations.

-enormous information results into product recall and reshipment.

g.)Network Design:-A network design results into a location analysis with minimum movement within

and outside the organizations.


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-Number of facilities ,excess should be eliminated.

-Either work is done by self or is outsourced

-2 way communication process, communication takes place between facilities.

-Salient features =

(2.2) THE MISSION OF LOGISTICS MANAGEMENT

-The mission is to plan and coordinate all those activities necessary to achieve desired levels of delivered

service and quality at lowest possible cost.

- Logistics must therefore be seen as the link between the marketplace and the operating activity of the

business.

-The scope of the logistics spans the organization, from the management of raw materials through to thedelivery of the final product.

Information flowInventory flowMoney flow.


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Materials flow

Requirements information flow

(2.3) Objectives of Logistics Management:

-To make available the right quantity of right quality products at the right place and time in right

condition.

-To offer best service to consumers.

-To reduce the cost of operations.

-To maintain transparency in operations.

(2.4) GAINING COMPETITIVE ADVANTAGE THROUGH LOGISTICS

-A firm can gain competitive advantage only when it performs its strategically important activities

(designing, producing, marketing delivering and supporting its product) more cheaply or better than

its competitors.

-Value chain activity disaggregates a firm into its strategically relevant activities in order to

understand behavior of costs and existing and potential sources of differentiation.

They are further categorized into two types:

Suppliers Operations CustomersDistributionProcurements


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Primary- inbound logistics, operation outbound logistics, marketing and sales, and service

Supportinfrastructure, human resource management, technology development and procurement

-To gain competitive advantage over its rivals, a firm must deliver value to its customers through

performing these activities more efficiently than its competitors or by performing these activities in a

unique way that creates greater differentiation.

-Logistics management has the potential to assist the firm in the achievement of both a cost/productivity

advantage and a value advantage.

- The under lying philosophy behind the logistics concept is that of planning and coordinating the

materials flow from source to user as an integrated system rather than, as was so often the case in the past,

managing the goods flow as a series of independent activities.

- Thus under a logistics management regime the goal is to link the marketplace, the distribution network,

the manufacturing process and the procurement activity in such a way that customers are service at higher

levels and yet at lower cost.

Importance and need of Logistics Management in todaysbusiness:

a.)Logistics management deals with the coordination of resources in an organization. b.)Logistics

management focuses on the organization as a whole and not on individual units and departments while

deciding about the allocation of resources.The resources may be in the form of men, machines, materials,

money and time.

c.)Logistics management helps in the efficient use and deployment of the scarce resources. In absence of

effective logistics management, there will be a depletion of various meager resources.

d.)In developing countries like India projects do not succeed because of lack of attention to logistics

management. Due to this there is a delay in the implementation of the projects. There is also uneven

distribution of goods and services. In certain areas, there is excess of goods and services available, while

in certain other areas, they are scarce. There is general inefficiency, uncertainty and instability in

rendering services to the public.

e.)Depending on the type of business, the expenditure on logistics can be anything between 5 and 35

percent of the sales. The cost of logistics management is therefore found to be high by certain industries.

Because of this high cost, they are reluctant to implement logistics management. But, if adequate attention

is paid to logistics, cost reduction can be effected in various departments. This is because logisticssuggests the use of efficient means of transport, locating areas where cheaper materials are available,

determining the correct quantities to be dispatched to market areas so that there is no scarcity or surplus

felt in those areas etc.

f.)In case a problem arises, logistics management would investigate the problem and resolve the same on

the basis of costs and benefits to the organization as a whole and not to any particular department or unit.

For example, to manufacture any product with zero defects would mean high cost of Production, which


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the customer may not be willing to pay. At the same time, if the finished product contains a lot of

defectives, the customers would be unwilling to buy such products. Logistics management tries to find out

the permitted standards of allowable defects in the finished products without any loss in the market share.

This information is passed on to the production departments, which fix standards for production.

g.)Another type of interface problem is caused when for example-, the marketing department considersthat it is responsible only for the sale of the finished product. On the other hand, the production

department may feel that the moment the goods are loaded on to the vehicle, its responsibility ceases.

Such rigid compartmentalization of responsibilities and roles is definitely not desirable. This leads to

neglect of activities in the interface areas which affect the overall efficiency of the organization.

h.)Logistics management does away with the ambiguity in the definition of the responsibilities of

individuals, Units and departments in an organization. It focuses on areas of possible inefficiency and

ensures that all areas are effectively managed. It brings about co-ordination between units and

departments.


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Materials management

Materials managementcan deal with campus planning and building design for the movement ofmaterials, or withlogisticsthat deal with the tangible components of asupply chain.Specifically, this

covers the acquisition of spare parts and replacements,quality controlof purchasing and ordering suchparts, and the standards involved in ordering, shipping, and warehousing the said parts

Supply Chain Materials Management Areas of Concentration

Goals

The goal of materials management is to provide an unbroken chain of components for production tomanufacture goods on time for the customer base. The materials department is charged with releasingmaterials to a supply base, ensuring that the materials are delivered on time to the company using thecorrect carrier. Materials is generally measured by accomplishing on time delivery to the customer, ontime delivery from the supply base, attaining a freight budget, inventory shrink management, and

inventory accuracy. The materials department is also charged with the responsibility of managing newlaunches.

In some companies materials management is also charged with the procurement of materials byestablishing and managing a supply base. In other companies the procurement and management of thesupply base is the responsibility of a separate purchasing department. The purchasing department is thenresponsible for the purchased price variances from the supply base.

In large companies with multitudes of customer changes to the final product over the course of a year,there may be a separate logistics department that is responsible for all new acquisition launches andcustomer changes. This logistics department ensures that the launch materials are procured for productionand then transfers the responsibility to the plant materials management

Standards

There are no standards for materials management that are practiced from company to company. Mostcompanies use ERP systems such as SAP, Oracle, BPCS, MAPICS, and other systems to managematerials control. Small concerns that do not have or cannot afford ERP systems use a form ofspreadsheet application to manage materials. Some other construction projects use barcode and GPSmaterials management systems like Track'em.[
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Materials management is not a science and depending upon the relevance and importance that companyofficials place upon controlling material flow, the level of expertise changes. Some companies placematerials management on a level whereby there is a logistics director, other companies see the importancelevel as managing at the plant level by hiring an inventory manager or materials manager, and still othercompanies employ the concept that the supervisors in the plant are responsible accompanied by aplanners.

Materials Management Challenges

The major challenge that materials managers face is maintaining a consistent flow of materials forproduction. There are many factors that inhibit the accuracy of inventory which results in productionshortages, premium freight, and often inventory adjustments. The major issues that all materials managersface are incorrect bills of materials, inaccurate cycle counts, un-reported scrap, shipping errors, receivingerrors, and production reporting errors. Materials managers have striven to determine how to managethese issues in the business sectors of manufacturing since the beginning of the industrial revolution.Although there are no known methods that eliminate the afore mentioned inventory accuracy inhibitors,there are best methods available to eliminate the impact upon maintaining an interrupted flow of materialsfor production.

One challenge for materials managers is to provide timely releases to the supply base. On the scale ofworst to best practices, sending releases via facsimile or PDF file is the worst practice and transmittingreleases to the supplier based web site is the best practice. Why? The flaw in transmitting releases viafacsimile or email is that they can get lost or even interpreted incorrectly into the suppliers systemresulting in a stock out. The problem with transmitting EDI releases is that not all suppliers have EDIsystems capable of receiving the release information. The best practice is to transmit the releases to acommon supplier web base site where the suppliers can view (for free) the releases. The other advantageis that the supplier is required to use the carrier listed in the web site, must transmit an ASN (advancedshipping notification), and review the accumulative balances of the order.

Improving circulation infrastructure

Redundancy can be reduced and effectiveness is increased when service points are clustered to reduce theamount of redundancy. An effective materials management program can also resolve island approachesto shipping, receiving, and vehicle movement. Solutions can include creating a new central loadinglocation, as well consolidating service areas and docks from separate buildings into one. Developingbetter campus circulation infrastructure also means re-evaluating truck delivery and service vehicle routes.Vehicle type, size, and schedules are studied to make these more monument for other MaterialsManagement Campus Planning and Building Design


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Overview

Materials management plans and designs for the delivery, distribution, storage, collection, and removal ofoccupant-generated streams of materials and services. It is usually an additional service that is offered aspart of a campus planning process or a building design project. It is most beneficial for university, healthcare, and corporate environments. Materials management looks at the planning and design considerationsneeded to support the efficient delivery and removal of goods and services that support occupant activity.The streams of occupant-generated materials and activity include mail, office supplies, lab supplies, food,special deliveries, custodial services, building supplies, waste and recycling, and service calls.

A materials management plan may include planning guidelines or full design for the following:

Truck delivery and service vehicle routes, to reduce vehicle / pedestrian conflict

Loading docks and delivery points, to increase accommodation and reduce queuing and vehicleidling

Recycling, trash, and hazardous waste collection and removal, to increase waste diversion andreduce costs Service equipment and utility infrastructure relocation or concealment, to improve aesthetics and

realize landscaping goals

Regulatory and operation planning

Benefits

The effective materials management plan builds from and enhances an institutional master plan by fillingin the gaps and producing an environmentally responsible and efficient outcome. An institutional campus,

office, or housing complex can expect a myriad of benefits from an effective materials management plan.For starters,there are long-term cost savings, as consolidating, reconfiguring, and better managing acampus core infrastructure reduces annual operating costs. An institutional campus, office, or housingcomplex will also get the highest and best use out of campus real estate.

An effective materials management plan also means a more holistic approach to managing vehicle use andemissions, solid waste, hazardous waste, recycling, and utility services. As a result, this means agreener, more sustainable environment and a manifestation of the many demands today for institutionsto become more environmentally friendly. In fact, thanks to such environmental advantages, creativematerials management plans may qualify for LEAD Innovation in Design credits.

And finally, an effective materials management plan can improve aesthetics. Removing unsafe and

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