Logistics Cost Management

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LOGISTICS COST MANAGEMENT Revenue, Cost & Margins

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By Sanjog Devrukhkar (ॐकार)

Transcript of Logistics Cost Management

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LOGISTICS COST MANAGEMENT

Revenue, Cost & Margins

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LOGISTICS COST MANAGEMENT

PRESENTED BY:

NAME OF THE STUDENT ROLL NUMBER ANITA AGARWAL 02 DHAWAL AMBANI 03 SUSHMA BHANDARI 04 KIRAN BHILARE 06 NILESH DESAI 10 SANJOG DEVRUKHKAR 11 BHAKTI JOSHI 14

MFM SEM – I (2008-11)

PRESENTED TO: MISS GITIKA MAYANK

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LOGISTICS MANAGEMENT INDUSTRY SEGMENT

Logistics Management is that part of Supply Chain Management that 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 customers’ requirements.

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ACTIVITIES / PRODUCTS INVOLVED

Customs Clearance

Transportation

Warehousing

(Multi location Invoicing)

Distribution & Transportation

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CORE COMPETENCY AREACORE COMPETENCY AREA

Warehousing and Distribution ( Handled by self )

OTHER SERVICES

To be Outsourcers on cost plus basis

Customs Clearance: By appointing external Custom House Agent

Primary Transportation: By riding available market capacities

Warehousing: By deploying own resources in Warehouses

Distribution: Take responsibility and manage through vendor

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Business Model & Products

Consolidation centre

CustomerManufacturer

Distribution & TransportationDélivre to end

Customer

Movement from

Manufacturer to Warehouse

Movement from Port to Customers

Transportation of Cleared cargo

Transportation of manufactured good

Warehousing of manufactured goods

Transportation of warehoused goods

Final DeliveryCustom Clearance from

Sea port

Air customsClearance

Sea customsClearance & Supplier s abroad

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COST MODEL Controlling office Common resources for managing overall

business. Cost to be apportioned over each contract Resources in Location specific Activity will by part of

operating cost of location. Core activity like Warehousing, will have detailed costing

resources by resources. Outsourced activity will by cost plus hence only services

hiring cost is considered. Each contract will have 10% overheads to take care of

common resources cost. Business will be operated at nominal margin of 10 % to

establish in market, as entry strategy.

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INITIAL FOOTPRINT

Controlling Office in Mumbai

Operating locations & Branches

Offices at

-Mumbai

- Chennai

- Bangalore

- Delhi

- Kolkata

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CONTROLLING OFFICE RESOURCES

Office 2000 sq ft

Manpower

- General Manager

- Head all India CC

- Head all India Transportation

- Head all India Warehousing and distribution

- Head Finance

- Support staff for all 5 above

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OPERATING LOCATION BRANCH RESOURCES

Office 500 sq ft

Manpower

- Branch Manager- - Customs Clearance - Business Development

- /Operations Manager

- Warehouse Manager

- Proposals & Business Development Executive

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INITIAL CORPUS REQUIRED

Four months equivalent operating cost reflected in Revenue progression sheet & Capital Expenditure involved in Core / Warehousing activity.

INR 0000000

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ASSUMPTIONS – REVENUE & COST

Customs Clearance Additional Business acquisition 20% per month

Primary Transportation is with reference to Customs Clearance and will grow at same rate.

Warehousing Revenue is steady and not growing throughout the year as capacity created is fix. To increase / add warehousing Revenue additional Capital expenditure need to be planned.

Head Office / Controlling Office Overhead are equally apportioned over all branches.

Branch Office overheads are apportioned only over business under that branch.

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DETAILED ACTIVITY COSTING

Core Activity : Warehousing

Warehousing Cost Model – 1

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REVENUE PROGRESSION

Year to Date (YTD) and Year End Outlook (YEO)

Revenue, Cost, Margin by Activity

Break even level for Business

Refer Revenue Progression sheet

Revenue Working-1.xls

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STATUTORY COMPLIANCE

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ANALYSIS OF YEAR END OUTLOOK

Product wise Profitability

Branch wise Profitability

Break even for each branch

Break even for all India Business

Each partner to present one branch.

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PLAN FOR NEXT YEAR

Out of other three outsourced Activities convert one activity to be handled in house through your own resources.

Carryout detailed study on Resources and Costing for Customs Clearance.

Start Inducting Resources in Company suits to this business plan.

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BIBLIOGRAPHY

www.google.com

www.wikipedia.org

Expert Personnel from Logistic Industry

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