1. Logistic Management Supply Chain Management By:- Israr Khan Raja
Preston University, Islamabad

2. Logistic Management

3. Logistics Management
Process of moving and positioning inventory to meet customer’s requirements at the lowest possible cost.
Difference between logistics and SCM?

4. Business Application of Logistics
Physical Distribution
Distribution Management
Proper movement and storing of finished goods
Marketing and Logistic
Closer to customers
The process of planning, implementing and controlling the efficient effective flow and storage of goods and services and related information from the point of origin to the point of consumption for the purpose of conforming to customer’s requirement

5. Business Application of Logistics
Material Management
Distribution Management

6. Elements of Logistic Management
Customer Order process
Location Analysis
Inventory Control
Material Handling
Packaging
Transportation
Customer Service

7. Distribution Management
The movement of material, usually finished goods or parts from suppliers to customers.
All activities related to physical distribution need to be managed
Impact of DM on

8. Impact of Distribution Management on
Product margins and profit
Marketing budget
Final retail pricing
Sales management practices

9. Distribution Channels
Retail
Wholesale
Direct mail
Telemarketing
Cyber marketing
Sales force

10. Inventory Management
Reactive Inventory system
Planning Approach

11. Distribution Strategies
Cross Docking
Milk Run
Direct Shipping
Hub and Spoke Model

12. Cross Docking

13. Milk Run

14. Hub and Spoke Model

15. Pool Distribution VS Normal LTL
Pool distribution is the distribution of product to numerous destination points within a particular geographic region.
LTL direct shipped to the regional terminals in truck load quantities.

16. LTL
LTL is the transportation of relatively small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers parcel carriers usually handle small packages and freight that can be broken down into units less than 150 pounds (68 kg). Full truckload carriers move freight that is loaded into a semi-trailer. Semi trailers are typically between 26 and 53 feet (7.92 and 16.15 m) and require a substantial amount of freight to make such transportation economical.

17. Pool Distribution

18. TRANSPORTATION MANAGEMENT
A transportation management system (TMS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system.
 The management of transportation operations of all types, including tracking and managing every aspect of vehicle maintenance, fuel costing, routing and mapping, warehousing, communications, EDI implementations, traveler and cargo handling, carrier selection and management, accounting.

19. Transportation in SCM Suppliers Transportation- Product Movement
Stores-Factory- Product Storage
Manufacturing process 1
Manufacturing process 2
Warehouse-Distributors- Product Storage
Dealer-Retailers- Product Storage
Customer

20. Participation in Transportation
Public
Government
Shipper-Sender
Carrier
Consignee

21. The Basic Modes of Transportation
The basic modes available to the logistics manager are
Rail
Motor
Water
Pipeline
Air

22. The Basic Modes of Transportation

23. Railroads Reliability and safety are improving and are generally good.
Capable of carrying a wide variety of products, much more so that other modes.
Very small number of carriers; likely only one will be able to serve any one customer location.
Trend is to merge smaller companies into larger ones with ultimate goal of having perhaps two transcontinental rail carriers.
Rail is a long haul, large volume system (high fixed costs; own rights-of-way).
Accessibility can be a problem.
Transit times are spotty, but are generally long.
Reliability and safety are improving and are generally good.
Premium intermodal services
Straight piggyback and containerized freight
Double stacks
Road Railer service

24. Motor Carriers-By Road
The motor carrier industry is characterized by a large number of small firms. In 1999, there were 505,000 registered motor carriers.
Low cost of entry causes these large numbers.
Used by almost all logistics systems and account for 82 percent of U.S. freight expenditures.
Consists of for-hire and private carriers.
High accessibility
Transit times faster than rail or water.
Reliability can be affected greatly by weather.
Relatively high cost compared to rail and water; trade-off is faster service.

25. Water Carriers-By Sea General cargo ships
Large high capacity cargo holds
Engaged on a contract basis
Many have self-contained cranes for loading/unloading
Tankers
Specially designed for liquid cargoes
Largest vessels afloat, some VLCCs at 500k+ tons
Container ships
High speeds for ships; increasingly more common and important
Larger vessels can handle up to 5,000 containers. .

26. Air Carriers-By Air
Limited number of large carriers earn about 90% of the revenue.
Any of the air carriers can carry air freight although some haul nothing but freight.
Cost structure is highly variable; do not own rights-of-way.
Transit times are fastest of the modes, but rates are highest.
Average revenue per ton mile 18 times higher than rail; twice that of motor carriers.
Seek goods with a high value to weight ratio.
Accessibility is low as is capability.
Reliability subject to weather more than other modes.

27. Pipelines Refers only to the oil pipelines, not natural gas
Not suitable for general transportation
Some research has been performed to move minerals in a liquid medium, but outside of a few attempts to transport slurried coal via pipeline, no real successes have occurred.
Accessibility is very low.
Cost structure is highly fixed with low variable costs.
Own rights-of-way much like the railroads.
Major advantage is low rates.

28. Pipelines

29. How To Select Mode of Transportation
Transit Time: Boat takes a lot longer than air but is cheaper.
Predictability: The estimated transit time and the actual transit time can vary. Receiving a product before the expected arrival date can be as bas as receiving it late. Airfreight is generally more predictable and less variable.
Cost of Transportation: Airfreight is the most expensive mode of transportation but may be justified when products are critical or perishable.
Non-economic factors: Foreign governments might give preferential treatment to certain national transportation company or limit the amount of usage for a certain mode of transportation. Customers may demand specific mode.

30. How To Select Mode of Transportation
Cost
Speed
Consistency
Distance
Volume-cost per unit
Density
Stowability-dimensions
Handling

31. Transport Documentation
Bill of Lading
Freight Bill
Shipping Manifest

32. Bill of Lading

33. Intermodal Transportation
Refers to use of two or more modes of transportation cooperating on the movement of shipment by publishing a through rate.
Logistics managers are looking for the best way to move shipments and these often attempt to take advantage of multiple modes of transportation, each of which has certain useful characteristics.

34. Intermodal Transportation

35. Warehousing
A warehouse is a location with adequate facilities where volume shipments are received from a production centre, broken down re-assembled into combinations representing a particular order or orders and shipped to the customer’s location/s.
Number of warehouse
Types of warehouse
Location of the warehouse

36. Third Party Logistics
A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides service to its customers of outsourced (or "third party") logistics services for part, or all of their supply chain management functions.

37. 3PL Vs. Transportation Services

38. Benefits of 3PL

39. Benefits of 3PL Save time Help expand Narrow your focus
Don’t need to invest in:
Trucks
Training
Development
Help expand
New markets
International
No roads
Narrow your focus
Allows you to focus on your strengths
Don’t get spread too thin
Reach more customers more effectively
Can ensure delivery times
can help a company run leaner

40. Services Provided By 3PL’s

41. Savings Potential of 3 PL of 3 PL
Route Design & Optimization
Closed Loop Dedicated Operations
Mode Conversion
Core Carrier Management
Rate Negotiation & Audit
Inbound Consolidation
Reverse Logistics
DC Location Realignments
Reduced Inventory

42. Short comings of 3PL Lack of Direct Oversight
One of the downsides of using 3PL services is that the client businesses have no direct control over their operation. They are relying on the 3PL company to consistently come through in delivering the promised services. This lack of direct control means that client companies are at the mercy of any problems the 3PL company faces. Beyond the possible loss of business, the damage that results from 3PL services failing to deliver certain products on time are the client company's problem, not the 3PL service's.

43. Short comings of 3PL Dependency
Handing over logistics to a 3PL service is a large commitment. Businesses need a reliable structure to function. Logistical downtime can translate into large amounts of lost productivity and revenue. Consequently, while the free market dictates that a business which is dissatisfied with its 3PL service could always find another, or develop its own logistical infrastructure, the reality is not so simple. Switching the nature of a company's logistical support can cost the company a great deal in unforeseen costs resulting from the transition. When businesses contract with 3PL services it creates a dependency which is no small matter to change. This dependency puts the client company in uncomfortable situations if pricing schemes or service reliability from the 3PL service is not working out as expected.

44. 10 Commandments of Outsourcing Logistic
Develop a strategy for outsourcing
Establish a rigorous provider selection process
Clearly define expectations
Develop a good contract
Establish sound policies and procedures
Identify and avoid potential points of friction
Communicate effectively with your partner
Measure performance and communicate results
Motivate and reward provider
Be a good Partner

45. The Move to 4PL