12-12-2012, 03:28 PM
INDIAN LOGISTICS INDUSTRY
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INTRODUCTION
Logistics management is that part of the supply chain which plans, implements and controlsthe efficient, effective, forward and backward (reverse) flow and storage of goods, servicesand information between the point of origin and the point of consumption in order to meet customer’s requirements rather to the customers’ delight. A professional working in the fieldof logistics management is called a logistician.Logistics, as a business concept, evolved only in the 1950s. This was mainly due to theincreasing complexity of supplying one's business with materials, and shipping out productsin an increasingly globalized supply chain, calling for experts in the field who are calledSupply Chain Logisticians. This can be defined as having the right item in the right quantityat the right time at the right place for the right price and to the right target customers(consumer); and it is the science of process having its presence in all sectors of the industry.
The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies. Logistics is concerned with getting (or transmitting) the products andservices where they are needed or when they are desired. It is difficult to accomplish anymarketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. Theoperating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible.
Origin and Definition of Logistics:
The term "logistics" originates from the ancient Greek "λόγος" ("logos"—"ratio, word,calculation, reason, speech, oration"). Logistics is considered to have originated in themilitary's need to supply themselves with arms, ammunition and rations as they moved fromtheir base to a forward position. In ancient Greek, Roman and Byzantine empires, there weremilitary officers with the title ‘Logistikas’ who were responsible for financial managementand distribution of supplies.
The Oxford English dictionary defines logistics as: “The branch of military science havingto do with procuring, maintaining and transporting material, personnel and facilities”.
The American Council of Logistics Management defines logistics as“the process of planning, implementing and controlling the efficient and effective flow, and storage of goods,services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.”
Objective of Logistics Management:
The primary objective of logistics management is to effectively and efficiently move thesupply chain so as to extend the desired level of customer service at the least cost. Thus,logistics management starts with ascertaining customers’ needs till their fulfillment through product supplies. However, there are some definite objectives to be achieved through a proper logistics system. These can be described as follows:
Improving customer service:
An important objective of all marketing efforts, including the physical distribution activities,is to improve the customer service. An efficient management of physical distribution can helpin improving the level of customer service by developing an effective system of warehousing,quick and economic transportation, andmaintaining optimum level of inventory.
Rapid Response:
Rapid response is concerned with a firm's ability to satisfy customer service requirements in atimely manner. Information technology has increased the capability to postpone logisticaloperations to the latest possible time and then accomplish rapid delivery of requiredinventory.
Reduce total distribution costs:
The cost of physical distribution consists of various elements such as transportation,warehousing and inventory maintenance, and any reduction in the cost of one element mayresult in an increase in the cost of the other elements. Thus, the objective of the firm should be to reduce the total cost of distribution and not just the cost incurred on any one element.
Generating additional sales:
A firm can attract additional customers by offering better services at lowest prices. For example, by decentralizing its warehousing operations or by using economic and efficientmodes of transportation, a firm can achieve larger market share. Also by avoiding the out-of-stock situation, the loss of loyal customers can be arrested.
Creating time and place utilities:
The products are physically moved from the place of their origin to the place where they arerequired for consumption; they do not serve any purpose to the users. Similarly, the productshave to be made available at the time they are needed for consumption.
Price stabilization:
It can be achieved by regulating the flow of the products to the market through a judicioususe of available transport facilities and compatible warehouse operations. By stocking theraw material during the period of excess supply and made available during the periods of short supply, the prices can be stabilized.
Quality improvement:
The long-term objective of the logistical system is to seek continuous quality improvement.Total quality management (TQM) has become a major commitment throughout all facets of industry. If a product becomes defective or if service promises are not kept, little, if any,value is added by the logistics. Logistical costs, once expended, cannot be reversed.
Movement consolidation
:Consolidation one of the most significant logistical costs is transportation. Transportationcost is directly related to the type of product, size of shipment, and distance. Many Logisticalsystems that feature premium service depend on high-speed, small shipment transportation.Premium transportation is typically high-cost. To reduce transportation cost. It is desirable toachieve movement consolidation.
Logistics Management FunctionLogistics
is the process of movement of goods across the supply chain of the company. This process is consisting of various functions, which have to be properly managed to bringeffectiveness efficiency in the supply chain of organization. The major logistical function areshown in figure