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Business Studies Notes 3
rd.
Year
Undergraduate / Graduate Level
SUBJECT: Logistics
network configuration
Authors: (Original Study Notes and Lecture Notes prepared by Mr. K.P. Saluja (M.B.A. from Indian Institute of Management Ahmedabad), and by Mr. K. K. Prasad (M.B.A from IGNOU Delhi) These notes are intended to be used by undergraduate students, completing Year 3 Business Degree Courses. These notes will help undergraduates and graduates complete case studies, coursework assignments and pass exams in Business Studies and Economics.
TABLE OF CONTENTS
(1) Logistics definition (2) Logistics activities (3) Seven R's in Logistics (4) Military logistics (5) Handling and order processing (6) Configuration and management (7) Warehouse management system and control (8) Logistics outsourcing
Logistics definition
Logistics is a part of supply chain management that deals with the effective forward and invert stream of merchandise, benefits, and related data from the starting place to the reason behind utilization as per the necessities of customers. Logistics the board is a part that holds the supply chain together. The assets oversaw in planned operations might incorporate unmistakable products like materials, hardware, and supplies, as well as food and other consumable things. In military logistics, it is worried about keeping up with armed force supply lines with food, deadly implements, ammo, and extra parts separated from the transportation of troops themselves. In the meantime, common operations manage the procurement, development, and capacity of unrefined substances, semi-completed products, and completed merchandise. For associations that offer types of assistance like trash assortment, mail conveyances, public utilities, and after-deals administrations, strategic issues additionally should be tended to.
for two-thirds of logistical costs and has a major impact on customer service. Transportation policies and warehouse management are closely intertwined. The ascent of business exchanges through the web lead to the need of "e- operations". Contrasted with conventional operations, e-strategies handle distributes are esteemed at fewer than 100 US dollars to clients spread at different objections all over the planet. In e-coordinated factors, clients' requests come in waves, when contrasted with customary planned operations where the interest is predictable. Inbound logistics is one of the primary processes of logistics concentrating on purchasing and arranging the inbound movement of materials, parts, or unfinished inventory from suppliers to manufacturing or assembly plants, warehouses, or retail stores. Outbound logistics is 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. Given the services performed by logisticians, the main fields of logistics can be broken down as follows: Procurement logistics Distribution logistics After-sales logistics Disposal logistics Reverse logistics Green logistics Global logistics Domestics’ logistics Concierge service Reliability, availability, and maintainability Asset control logistics Point-of-sale material logistics
Emergency logistics Production logistics Construction logistics Capital project logistics Digital logistics Humanitarian logistics Procurement logistics Procurement logistics consists of exercises, for example, statistical surveying, requirements planning settle on or-purchase choices, supplier management, ordering, and order controlling. The objectives in acquisition strategies may be problematic: expanding productivity by focusing on center capabilities, re- evaluating while at the same time keeping up with the independence of the organization, or limiting procurement costs while maximizing security inside the supply process Advance logistics Advance logistics consists of the activities required to set up or establish a plan for logistics activities to occur Global logistics Global logistics is in fact the most common way of dealing with the "stream" of merchandise through what is known as a supply chain, from its place of creation to different regions of the planet. This frequently requires a multi- purpose transport system, transport through sea, air, rail, and truck. The viability of worldwide strategies is estimated in the Logistics Performance Index. Distribution logistics
RAM logistics combines both business logistics and military logistics since it is concerned with highly complicated technological systems for which reliability, availability and maintainability is essential, ex: weapon systems and military supercomputers. Asset control logistics Asset control logistics companies in the retail channels, both organized retailers and suppliers, often deploy assets required for the display, preservation, promotion of their products. Some examples are refrigerators, stands, display monitors, seasonal equipment, poster stands & frames. Emergency logistics Emergency logistics (or humanitarian logistics) is a term utilized by the operations, store network, and assembling ventures to signify explicit time- basic methods of transport used to move merchandise quickly in case of an emergency. The justification for enrolling crisis operations administrations could be a creation delay or expected creation delay, or a pressing requirement for particular gear to forestall occasions, for example, airplane being grounded (otherwise called "airplane on ground" — AOG), ships being deferred, or media communications disappointment. Compassionate operations includes states, the military, help offices, givers, non-legislative associations and crisis coordinated factors administrations are ordinarily obtained from an expert supplier. The term creation planned operations portrays calculated processes inside a worth adding framework (ex: production line or a mine). Creation coordinated operations plans to guarantee that each machine and workstation gets the right item in the ideal amount and quality with flawless timing. The worry is with creation, testing, transportation, stockpiling, and supply. Creation coordinated factors can work in existing as well as new plants: since assembling in a current plant is a continually evolving process, machines are traded and
new ones added, which offers the chance to further develop the creation operations framework accordingly. Creation strategies give the necessary resources to accomplish client reaction and capital productivity. Creation planned operations turns out to be more significant with diminishing bunch sizes. In numerous ventures (for example cell phones), the momentary objective is a clump size of one, permitting even a solitary client's interest to be satisfied effectively. Track and following, which is a fundamental piece of creation coordinated factors because of item wellbeing and unwavering quality issues, is additionally acquiring significance, particularly in the auto and clinical businesses. Construction logistics Construction logistics has been utilized by human advancements for millennia. As the different human civilizations attempted to fabricate the most ideal works of development for living and security presently construction logistics has arisen as a crucial piece of development. In the beyond couple of years, construction logistics has arisen as an alternate field of information and concentrate inside the subject of store network the board and strategies.
Seven R's in logistics
The Seven R's is a popular concept used to enforce best practices in logistics management which consists of the following: Right product (including the right information about it) (At) right quantity Right time Right condition Right place (To) the right customer (With the) right (financial) resources
Military logistics
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 more repair parts are needed over time, even when usage and quantity stay consistent. By recording and analysing 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. Business logistics 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 all industry sectors and aims to manage the fruition of project life cycles, supply chains, and resultant efficiencies. The term business logistics has evolved since the 1960s due to the increasing complexity of supplying businesses 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 Include inventory management, purchasing, transportation, warehousing, consultation, and the organizing and planning of these activities. Logisticians combine 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 of transport links and storage nodes, while the other coordinates a sequence of resources to carry out some project (e.g., restructuring a warehouse). Nodes of a distribution network A distribution network would require a few middle people to bring customer or modern merchandise from makers to a user. Mediators would mark-up the costs of the products during distribution, yet benefit clients by giving lower transportation costs than the producers. The quantity of mediators expected for the distribution network relies on the kinds of products being disseminated. For instance, customer merchandise, for example, beauty care products and painstaking work may not need any mediators as they can be offered house to house or can be obtained from nearby flea markets. For modern products, for example, unrefined components and equipment, middle people are not required in light of the fact that makers can offer an enormous number of merchandise to a client. By and large, there are three sorts of middle people, specifically: specialist/intermediary, distributer, and retailer. The nodes of a distribution network include:
- Factories where products are manufactured or assembled
- A depot or deposit, a standard type of warehouse for storing merchandise (high level of inventory)
- Distribution centers for order processing and order fulfilment (lower level of inventory) and also for receiving returning items from clients. Typically, distribution centers are way stations for products to be disbursed further down the supply chain. They usually do not ship inventory directly to customers, whereas fulfilment centers do.
- Transit points for cross-docking activities, which consist of reassembling cargo units based on deliveries scheduled (only moving merchandise)
Order handling is a consecutive cycle including: handling withdrawal list, picking (particular expulsion of things from stacking units), arranging (collecting things in light of the objective), bundle development (weighting, naming, and pressing), order consolidation (gathering bundles into stacking units for transportation, control and bill of filling). Picking can be both manual and 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-load ASRS, vertical or horizontal carousel or from an Automatic Vertical Storage System (AVSS). Automatic picking is done either with dispensers or DE palletizing robots. Sorting can be done manually through carts or conveyor belts, or automatically through sorters. Transportation Combining little shipments into enormous shipments can assist with saving transportation costs. There are three strategies to do this: office combination, multi-stop solidification, and fleeting union. Office solidification utilizes the financial matters of scale by shipping little shipments over brief distances and enormous shipments over significant distances. Multi-stop combination makes various stops to unite little shipments on account of not exactly load transporting. Fleeting combination changes the delivery plans advances or in reverse to make a solitary huge shipment as opposed to a few little shipments over time. Freight can be combined into beds or compartments. There are five essential methods of transport, in particular, transport, rail, truck, air, and pipeline worked by various transporters. These delivery techniques can be joined in different ways, for example, multi-purpose transport (no taking care of), multimodal transport, and consolidated transport (negligible street transport). A transporter picks a transporter by considering the all-out cost of shipment
and travel time. Air is the most costly sort of transport, trailed by truck, rail, pipeline, and ship. Freight can be coordinated in various shipment classes. Unit loads are typically gathered into higher normalized units, for example, ISO holders, trade bodies or semi-trailers. Particularly for extremely significant distances, item transportation will probably profit from utilizing different transportation implies: While moving freight, regular imperatives are greatest weight and volume. Administrators associated with transportation include: all train, street vehicles, boats, planes organizations, messengers, cargo forwarders and multi-modular vehicle administrators. Stock being shipped universally is typically dependent upon the Incoterms principles gave by the Worldwide Office of Business.
Configuration and management
In the planned operations business, a strategic framework is planned at any rate cost in light of the normal client support level. As the help improves, the quantity of deals likewise expanded. As administration is additionally improved, more deals are caught from contending suppliers. Further expansion in client assistance levels after these main increments deals hardly. Likewise to creation frameworks, strategic frameworks should be appropriately designed and made due. As a matter of fact various procedures have been straightforwardly acquired from tasks the executives, for example, utilizing Financial Request Amount models for overseeing stock in the hubs of the network. Distribution resource planning (DRP) is like MRP; then again, actually 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, configuration may be at the level of the warehouse (node) or at level of the distribution system (network).
transportation, from the second level to a 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 toward trade barriers, innovation in transportation means (both vehicles or thoroughfares), the introduction of regulations (notably those regarding pollution) and availability of ICT supporting systems (e.g. ERP or e-commerce). Once more once a calculated framework is designed, the executives, meaning strategic choices, happen, at the level of the stockroom and of the circulation organization. Choices must be made under a bunch of limitations: inner, like utilizing the accessible framework, or outside, for example, consenting to the given item rack life’s and termination dates. At the stockroom level, the logistician should choose how to convey stock over the racks. Three essential circumstances are customarily thought of: shared capacity, devoted capacity (rack space saved for explicit product) and class- based capacity (class importance stock coordinated in various regions as per their entrance list). Picking productivity shifts enormously relying upon the situation. For a man to merchandise circumstance, a differentiation is completed between undeniable level picking (vertical part huge) and low-level picking (vertical part irrelevant). Various strategic choices with respect to picking should be made:
- Routing path: standard alternatives include transversal routing, return routing, midpoint routing, and largest 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 v/s batch picking. At the level of the distribution network, tactical decisions involve mainly inventory control and delivery path optimization. Note that the logistician may be required to manage the reverse flow along with the forward flow.
Warehouse management system and control
In spite of the fact that there is some cross-over in usefulness, stockroom the board frameworks (WMS) can contrast essentially from distribution center control frameworks (WCS). Basically, a WMS plans a week by week action figure in view of such factors as measurements and patterns, while a WCS behaves like a story boss, working continuously to take care of business by the best means. For example, a WMS can perceive the framework that it will require five of stock-keeping unit (SKU) A and five of SKU B hours ahead of time, however when it acts, different contemplations might have become an integral factor or there could be a logjam on a transport. A WCS can forestall that issue by working continuously and adjusting to the circumstance by going with a latest possible moment choice in view of current movement and functional status. Working synergistically, WMS and WCS can determine these issues and expand productivity for organizations that depend on the compelling activity of their stockroom or appropriation focus.
Logistics outsourcing
Logistics outsourcing re-evaluating includes a connection between an organization and a LSP (calculated specialist co-op), which, contrasted and fundamental planned operations administrations, has more tweaked contributions, envelops an expansive number of administration exercises, is portrayed by a drawn out direction, and hence has a vital nature.
References
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