BY A.R.ROHINI

LOGISTIC IN INDIA • India is being touted as the land of opportunity for

logistics service providers all over the world.

• The Indian logistics market represents $ 50billion and is growing at a rate of 7 percent annually.

[source: Frost & Sullivan]

INDIA LOGISTIC

ROAD RAILWAYS SEA AIR

Features of Indian Logistics Industry

•A number of small-integrated players.•Transportation costs account for nearly 40% of production costs.•Logistics costs around 13% of GDP, compared to 8% in the US.•Growth in Indian economy is the major driving factor for the demand in logistics industry.•Chemicals, metals, FMCG, cement and textiles have been identified as the top five contributors to logistics revenues.

TRANSPORTATIONWAREHOUSINGINVENTRY CARRYINGORDER PROCESSING ADMINISTRATION

24% 39%

27%

6% 4%

India China US Europe Japan0

2

4

6

8

10

12

14

16

18

11.580.7

39%

1011.7

17 Comparative logistic costLogIStIc Cost

INDIAN ROAD NETWORK•India has the second highest largest road network-3.3 million km.• US has the largest road network with 6.4 million km & China-1.8 million km.•National Highways-2% of total road length . But carry 40% of goods traffic of India.

TYPES OF ROADS

LENGTH(Km)

% OF TOTAL

NATIONAL HIGHWAYS

65,569 2.00

STATE HIGHWAYS

131,899 4.00

MAJOR DISTRICT ROADS

467,763 14.10

VILLAGE AND OTHER ROADS

2,650,000 79.90

TOTAL 3,315,231 100.00

INDIAN RAILWAY LOGISTICS• The Indian Railways boasts of

being the world’s 2ndlargest rail network spread over 81,511 km and covering 6896 stations.

• The freight segment accounts for roughly two thirds of railway’s revenues.

• The tonne/kilometer costs for Indian rail freight at three times that of China

[Tata Iron & Steel]• Rail services have been liberalized.

2002-03 2003-2004 2004-2005 2005-2006 2006-20070

5000

10000

15000

20000

25000

30000

35000

40000

45000

26231

27646

33480

3649040320

RAILWAY FRIEGHT REVENUESRUPEES IN CRORE

YEARS

INDIAN SEA LOGISTICS• India has 12 major and 184 minor intermediate ports

spread across the vast coastline of 7517km.• The 12 major ports handle about 76per cent of the traffic. • India's West Coast ports handles almost 70% of traffic.• India now has the largest merchant shipping fleet among

the developing countries• India ranks 17thin the world in shipping tonnage.• Indian share of maritime transport services is 1% of world

market.• The container traffic has registered an impressive growth

of 15 per cent over the last five years

INDIAN AVIATION LOGISTIC SECTOR

•Aviation holds a small share of India’ s freight market.•Air Freight is very expensive in India in comparison to road and rail.•The size of the world air cargo market is estimated at 27 million tones valued at $200 billion.•India accounts for meager 3% of the global air cargo market

THE IMPORTANT LOGISTICAL REQUIREMENT OF MODERN INDUSTRIAL ENTERPRISE

are,• Sufficient land for the main industrial plant• Sufficient water for the main plant • Sufficient electric power supply • Full movement and storage infrastructure• Communication links • Maintenance of law and order• Sufficient supply of labor , technical aspects etc.

Every organization has an information system wherein the following organized

operation takes place:

• Sources• Collection of information• Storage• Retrieval• Reports

Computerized Information system

• Computerization is often considered by many managers to be cumbersome , costly and often unnecessary

• Advantages:Rapid , Prompt , decision-making, speed

and error free retrieval • Computerization enable us to make a very

sound logistics information system

• Order processing system is only one aspect of the total logistic information system .Does not make decision it is only a decision assisting system

• Control system makes specified adjustments , given certain data received from the environment and thereby initiates action

Ex: Inventory control , Computerized material handling and storage system etc

Logistic information includes:

An External information system Internal information system• External information system :Refers to the communication between the firm and its customers and suppliers• Internal information system :Provides for an exchange of information between functional departments within the organization and for the processing the storage, retrieval and manipulation of information.

LOGISTIC INFORMATION SYSTEM DIAGRAM

ELEMENTS OF ORDER PROCESSING

LIS DESIGN

• The following are the four major consideration to be taken into account for the design of an optimal system

The decision to be made in the organization at each level of managementThe requirements of the system The requirements of control over the systemInput and Output data

Typical sales order processing through a warehouse

Total IS concept for order processing in physical distribution management

Flow chart of an automated order processing system

EXAMPLE 1

EXAMPLE2