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UNIT-I: Logistics and Competitve Strategy- Competitve Advantage Gaining Competitive Advantage through Logistics- Mission of Logistics Management-Integrated

Suppy Chain- Supply Chain and Competitve Performance-Changing Logistics Environment-Models in Logistics Management-Logistics to Supply Chain Management-Focus Areas in supply chain management.
=========================================================================================== LOGISTICS AND COMPETITIVE STRATEGY Introduction: Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, andpackaging, and often security. Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software, but is constantly changing. This can involve anything from consumer goods such as food, to IT materials, to aerospace and defense equipment. Orgin: The term logistics comes from the Greek logos (), meaning "speech, reason, ratio, rationality, language, phrase", and more specifically from the Greek word logistiki (), meaning accounting and financial organization. Logistics is considered to have originated in the military's need to supply themselves with arms, ammunition and rations as they moved from their base to a forward position. In ancient Greek,Roman and Byzantine empires, military officers with the title Logistikas were responsible for financial and supply distribution matters Definition: "the branch of military science relating to procuring, maintaining and transporting material, personnel and facilities." -- The Oxford English Dictionary Logistics contains the integrated planning, control, realization and monitoring of all internal and network-wide material-, part- and product flow including the necessary information flow in industrial and trading companies along the complete value-added chain (and product life cycle) for the purpose of conforming to customer requirements. --Council of Logistics Management 2009 Logistics Management refers to desigining, developing, producing and operating and integrated system whichresponds to customer expecrations by making available the requred quanity products as when required to offer best customer service at least possible costs.

Logistics management
Logistics is that part of the supply chain which 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 customer and legal requirements. A professional working in the field of logistics management is called a logistician. Logistics management is known by many names, the most common are as follows:

Materials Management Channel Management Distribution (or Physical Distribution) Business or Logistics Management or Supply Chain Management

COMPETITIVE STRATEGY A companys competitive strategy defines the set of customers needs that it seeks to satisfy through its products and services. Competitive strategy will be defined based on customert priorities.It targets on one or more customer segments and aims to provide goods and services to satisfy the customer needs. Core functions in an organization are Research & Development, Purchasing, Accounts, Finance, Marketing , Sales, Inventory, IT, Human Resourceetc.All these funtions play a vital role and each develops its own strategy, here strategy refers to what each function will try to do particularly well. E.g Walmart is the Worlds No.1 in Reatil Buisness. It has a unique strategy with respect to product and cost. i.e it aims to provide high product availability of a variety of reasonable quality products at lower prices.This strategy targets on Customers convenience, Availabilty and responsiveness. Pin to Plane available under one Roof COMPETITIVE ADVANTAGE- GAINING COMPETITIVE ADVANTAGE THROUGH LOGISTICS (A)Competitve Advantage in general means, making an Edge over competitors in differenrt aspects.Effective Logistics Management can provide a major source of competitve Advantage- i.e positioning superirotity over competitors in terms of cutomer preference through logistics.Three Major sources of Competitive Advantage are Three CsCUSTOMER COMPETITION - COMPANY The echo of competitive advantage found in ability of organization to differentiate itself, in the eyes of customer, from its competitiors and by operating at lower cost and earns greater profits.

Successful companies either have product advantage or value advantage/Value differentiation or combination of both. Product advantage gives a lower cost profile and the value advantage gives differential plus over competitive offerings. Product Advantage: In many firms, Companies, even in Industry, who produces goods & Services with low cost than competitors, will have greatest sales volume. That proves Big is Beautiful when its cost advantage.Hence there are multiple methods and means of improving cost efficiency thrugh better logistics management.

Value Advantage: Adding value through differentiation is extremently powerful means of achieving compeititve advantage in market.Add on serivces can make the differential plus from your compeititors. E.g Free Home Delivery Succsessful companies seek to achieve a position based upon both productivity advantage as well as value based advantage.

Quadrant 1. Market is uncomfortable place as their products cannot be differentiated from their competitors offerings and they don not have any cost advantage. These are commodity markets.E.g FMCG goods Quadrant 2. Firms adopt cost leadership startegies. These are based on economies of scale gained through volume . Total cost is mostly involved in logistical activities where cost can be reduced. Quadrant 3. Seeks differentitaion through service excellence as market and customer requirements and specifications are more sensitive. Service strategies can be enhanced through logistics Management. Quadrant 4. Companies in this categoty are very distinctive in the value they deliver and are also more competitve. Thus competitors find extremely hard to attack these companies which they try to execel in VALUE CHAING ACTIVITIES. (B) Gaining Competitive Advantage Through Logistics. Competitive advantage cannot be understood by looking at a firm as a whole. A firm performs numerous activities in deisgning, producing, marketing, deliverng, and supporting its product. Each activity contributes firms relative cost position and create a basis for differentiation. Miachel E.Porter of Harvard Business School rolled out the coin of competitve advantage and gave new direction towards the nimdset of corporate strategists and managers in achieving success in Market place.And has proposed the value chain as the basic tool for gaining Competitive adavantage. A systematic way of examining all the activities a firm performs and how they interact is necessary for analysing the sources of Competitive advantage.The value chain dis aggregate the firm in to its strategically relevant activities in order to understand the behaviour of costs and the existing and potential sources of differentiation. A firm gain competitive advantage by performing these strategically important activities more cheaply or better than its competitors.

According to Porter, there are two types of activities can be found in the concept of value chain. 1. Primary Activities: Inbound Logistics invloves relationships with suppliers and include all the activities required to receive store and disseminate inpts. Operations are all the activities required to transform inputs in to outputs (Goods & Services) Outbound logistics include all the activities required to collect, store and distribute the output. Marketing and sales activities inform buyers about product and services and faclitate them to buy. Services includes all sort of activties required to keep good or service working effectively for the buyer after it is sold and delivered. 2. Secondary Activities: Procurement is the acquistion of inputs, or resources for the firm. HRM consists of all activities invloved in recruitng, hiring, training, developing, compensating, and also dismissing the man power. Technological Development pertains to the euipment, hardware, software, procedures and technical knowledge brought to bear in the firms transformation of inputs into outputs. Infrastructure serves the companys needs and ties various parts togather, it consists of functions or departments such as accounting, legal, finance, planning, public affairs, Govt. relations, quality assurance and general management. To gain a competive advantage over other players, efforts should be made by firm to deliver value to its customer performing value chain activities in a more efficienct way than its competitors. Logistics management has tremendous potential to contribute in gaining competitve advantage because primary activity in the value chain faclitating in the performance of others.Competitve advantage can be created and achieved by logistics managers in two ways.

LOGISTICS COST AND VALUE ADVANTAGE

Logistics ensures a high level of cost advantage in terms of low inventory level, resulting in lower inventory cost, no stock out so no lost sales cost, intact delivery, maximum capacity utilization, high working capital turnover as well as integrated total logistics system, reulting in to synergy effect. It also contributes in high value advantage by means of high quality products, their regular availabilty, quick response, best customer service and consistence in performance of logistical system. High cost and value advantage ensure superior customer value, revealing a competitive advantage. William C. Capacino has identified some more significant ways for competitve advantage by the use of Logistics Low cost Superior Customer Service Value added services Flexibility Regeneration(re inventing new ways)

MISSION OF LOGISTICS MANAGMENT Logistics system of firm referes to an integraed effort towards generating the (a) highest value of customer satisfaction, (b) at low cost while delivering the highest value to its shareholders.Hence the major mission of logistics are as follows A. To make available the right quantity of right quality products at the right time and place in the right physical condition. In simple, the mission is to making available goods and services to customers as per requirements and specifications. Hence, firms need to ensure timely and intact delivery of goods. B. To offer the best possible customer service for core competency. In the present days scenario of global competition and future growth and more service from trade, corporate enterprises have largely depend on their customers(marketing intermediaries) because they are having final interface with end users and the final sales deal is swung by their push efforts.Firms need to keep their customer motivated towards trade. For this purpose firms have to offer their best services to their customers in terms of three broad categories of service components,namely; I. Strategic Components- These components reflect the vision of the top management of the company towards relationships with their customers in terms of their ability to ensure the best return against the invsetment made, space provided and push efforts required for generating sales, transparency and uniformity in operations. II. Logistical Components - These components deal with basic services required for delivery of goods, including availability of goods as per normal and unforseen requirements, fixed replenshiment cycle-time, Zero defect delivery, point to point information, consistenct and reliability in their services. III. Non-Logistical Components- Value added services offered to customers in terms of financial and technical support for infrastructural development, credit facility on special occassions, triaining their marketing and mangerial skills, giving discrtionary power for warranty settlementsetc C. To minimize total logistical costs.Normally Logistical costs range from 15% to 45% of the price of product next to the costs of raw materials. In certain cases 5 % and in some its 200%. Hence the scope for curatailing the cost by means of having better coordination and integration of various logistical and non logistical functions of an enterprise along with higher level of productivity.Effective logistical costing still remians a challenge. There must be a trade off between total logistical cost and required customer service level In order to achieve the logstics mission, the following are some important strategic lines for smooth and efficient logistical activities: Decision makers to realize the importance of arranging inputs to manufacturing, trading or service activity Increase the status of purchase or SCM. Provide motivation for better persons to choose SCM as career. Adopt harmonized system of codification to identify the products. Improved vendor relations are a part of cultural change and therfore the joint responsibility of the top management. Logistics problem requires multiple solutions, depending on the type of industry, geographical area etc.Only joint efforts of academic institutions, associations and the govt. can evolve an acceptable solution

SUPPLY CHAIN: the system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier and customer. Supply chain activities transform natural resources, raw material and components into a finished product that is delivered to the end customer

SUPPLY CHAIN MANAGMENT Supply chain Management encompasses, planning, design, control and implementation of all business processes related to procurement, manufacturing, distribution and sales management of finished goods. SCM is also called the art of management of providing the Right Product, At the Right Time, Right Place and at the Right Cost to the Customer.SCM is management of upstream and down stream relationships with suppliers and customers to deliver superior customer value at leasat cost to the supply chain as a whole. Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thirdparty service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. INTEGRATED SUPPLY CHAIN Supply chain integration -"Integration" means that the system of the elements of organization, coordination and restructuring, so that resources will be the optimal configuration, the highest system efficiency. Supply chain is a node contains all enterprise and internaldepartment systems, in this system have the information flow, capital flow andlogistics flow of transmission, will be in the supply chain to integrate the variouselements to improve the efficiency of supply chain management are core mission. Supply chain integration is defined as suppliers of raw materials to finished goodsto end-users the full process, including outsourcing, manufacturing, distribution,inventory management, transportation, warehousing,

customer service, unifiedcoordination and restructuring in order to make this Net chain enterprises canachieve maximum benefits.

Supply chain integration has two basic points: First, flow integration, the main aspect is the convergence of various functions to optimize the efficiency of integration; Second, integrated sections, the main sections are the functions of the efficiency of the integration itself, usually happed as a whole system (Yang 2007, 11). Generally supply chain integration including the integration of the following elements: Integrated flow from raw material supply, product manufacturing, product distribution, to the end users Integration of suppliers, manufacturers, distributors, retailers, customers Process integration of information flow, logistics, capital flow and management Comprehensive integration of supply chain management, organization, management technology, and management approach Supply Chain Management emphasis includes suppliers, manufacturers, channel intermediaries and customers integration. J Stevenson proposed four stages of integration: the benchmark organizations, the functions integration, internal integration, external integration (Stevenson .G, 1998,8).

STAGE 1.Baseline/Benchmark: Complete functional independence where each business function such as

productio or purchasing does its own thing in complete isolation from other business function.For example, production function seeking to optimize its unit cost of manufacture by long production runs without regard for buildup of finished goods inventory abd the adverse impact it will have on the warehousing as will aas working capital.

STAGE 2. Functional Integration: Companies recognize the need for limited integration between adjacent

functions such as diustribution and inventory of purchasing and material control

STAGE 3 INTERNAL INTEGRATION is to implement the direct control of enterprise integration and supply chain implementation within enterprises and external supply chain suppliers and their respective user management part of the integration, the formation of the internal integration of the supply chain. At the same time, internal integration is not only the Department integration, is also the department's standardized flow integration, the formation of the standard flow and management mechanism. In the study, the main consideration in the optimization of resources, capacity, based on the lowest cost and fastest speed in the production of the best products, quick response to user needs in order to improve the responsiveness and efficiency of enterprises. Internal supply chain integration: Internal supply chain integration is to have the internal relations between supply and demand adjust to optimize the flow, so that products or services at a faster transmission, more flexible, more economical and effective, so that the operation of enterprises improve operational efficiency, improve business competitiveness. Through information technology and management tools for internal supply chainintegration, enterprise internal supply, manufacture, sales in pursuit of common objectives and implementation strategies in line. Internal supply chain integration has four main areas:

INFORMATION INTEGRATION: Information integration refers to the supply chain to participate in Department information sharing, which is the basis of supply chain integration. DECISION-MAKING INTEGRATION,: Decision-making supply chain integration refers to a number of aspects on the synergy between the plans. FINANCIAL INTEGRATION: Financial integration will change the supply chain nodes to pay the relationship between the departments, is to coordinate the overall interests of the supply chain means. OPERATION OF INTEGRATION: Integration refers to the operation of upstream and downstream supply chain between the human resources (such as procurement, marketing, design, etc.) as well as the sharing of material resources (Yang 2007, 14). Internal supply chain integration will involve the operation of enterprises of various flow and business department, coordination and restructuring, so that various departments within enterprises connected, open and effective information sharing, so that the optimaloverall operation more efficient operation.

STAGE 4 EXTERNAL INTEGRATION is the key to integration, the internal and external supply Chain suppliers and users together to form an integrated supply chain network. External integration is the most advanced stage, the actual meaning of that supply chain integration. Supply chain integration through information technology tools and management tools to achieve the supply chain of manufacturing processes and logistics seamlessly (Kate, P. B. , 1998).

The supply chain and competitive performance Traditionally most organizations have viewed themselves as entitiesthat exist independently from others and indeed need to compete withthem in order to survive. There is almost a Darwinian ethic of the survivalof the fittest driving much of corporate strategy. However, such aphilosophy can be self-defeating if it leads to an unwillingness to cooperatein order to compete. Behind this seemingly paradoxical conceptis the idea of supply chain integration. The supply chain is the network of organizations that are involved,through upstream and downstream linkages, in the different processes andactivities that produce value in the form of products and services in thehands of the ultimate consumer. Thus, for example, a shirt manufactureris a part of a supply chain that extends upstream through the weavers offabrics to the manufacturers of fibres, and downstream through distributorsand retailers to the final consumer. Each of these organizations in thechain are dependent upon each other by definition and yet, paradoxically,by tradition do not closely co-operate with each other.Supply chain management is not the same as vertical integration.

Vertical integration normally implies ownership of upstream suppliersand downstream customers. This was once thought to be a desirablestrategy but increasingly organizations are now focusing on their corebusiness in other words the things they do really well and where theyhave a differential advantage. Everything else is outsourced in otherwords it is procured outside the firm. So, for example, companies thatperhaps once made their own components now only assemble the finishedproduct, e.g. automobile manufacturers. Other companies mayalso subcontract the manufacturing as well, e.g. Nike in footwear andsportswear. These companies have sometimes been termed virtual ornetwork organizations. Clearly this trend has many implications for supply chain management,not the least being the challenge of integrating and co-ordinatingthe flow of materials from a multitude of suppliers, often offshore, andsimilarly managing the distribution of the finished product by way ofmultiple intermediaries.In the past it was often the case that relationships with suppliers anddownstream customers (such as distributors or retailers) were adversarialrather than co-operative. It is still the case today that some companies will seek to achieve cost reductions or profit improvementat the expense of their supply chain partners. Companies such as thesedo not realize that simply transferring costs upstream or downstreamdoes not make them any more competitive. The reason for this is thatultimately all costs will make their way to the final marketplace to be reflected in the price paid by the end user. The leading-edge companiesrecognize the fallacy of this conventional approach and instead seek tomake the supply chain as a whole more competitive through

the valueit adds and the costs that it reduces overall. They have realized that thereal competition is not company against company but rather supply chain against supply chain. It must be recognized that the concept of supply chain management,whilst relatively new, is in fact no more than an extension of the logicof logistics. Logistics management is primarily concerned with optimizingflows within the organization, whilst supply chain managementrecognizes that internal integration by itself is not sufficient. By taking Integrated Supplu chain Picture, suggests that there is in effect an evolution of integration from the stage1 position of complete functional independence where each businessfunction such as production or purchasing does their own thing in Complete isolation from the other business functions. An examplewould be where production seeks to optimize its unit costs of manufactureby long production runs without regard for the build-up offinished goods inventory and heedless of the impact it will have on theneed for warehousing space and the impact on working capital Stage 2 companies have recognized the need for at least a limiteddegree of integration between adjacent functions, e.g. distribution andinventory management or purchasing and materials control. The naturalnext step to stage 3 requires the establishment and implementationof an end-to-end planning framework . Stage 4 represents true supply chain integration in that the conceptof linkage and co-ordination that is achieved in stage 3 is nowextended upstream to suppliers and downstream to customers. There isthus a crucial and important distinction to be made between logisticsand supply chain management. ========================================================================================= CHANGING LOGISTICS ENVIRONMENT Rapid Changes in Industry with Advent of Technology and Innovations, the whole logistics functons are changing. And Change should match the end user of the system ultimately. Customer Service Explosion: Customers today is more demanding not just of product quality, but also service. As more and more market becomes in effect commodity markets where the customer perceives little technical diffrence between competing offers, the need is for the creation of differential advantage through added value. Some typical comapanies gives priority to logistics management like DELL. Time Compression: One of the most visible fetaure of recent years has been the way in which time has become a critical issie in management. Product life cycles are shorter than ever industrial customer and distributors require just in time deliveries, and end users are ever more willing to accept a substitute product if their first

choice is not instantly available. There is one issue which perhapsis the problme of extended logistics lead times. How long does it take to convert and order in to cash? To over come problems and to establish enduring competitve advantage by ensuring timely response to volatile demand, a new and fundamentally different approach to the management of lead times is required. Globalization of Industry: The third of the strategic issues that provides a challenge for logistics managment is the trend towards globalization. A global company is more than a multinational company.In the global business material and components are sourced worldwide, maunfactured offshore and sold inmany different countries perhaps with local customization.The global company seeks to achieve competitve advantage by indentifying world markets for its products and then developing a manufacturing and logistics strategy to support its marketing strategy. Organizational Integration: The classical business organization is based upon strict functional divisions and hierachies. It is difficult to acive a closely integrated, customer focused material flow. ======================================================================================= MODELS IN LOGISTICS MANAGEMENT: Various quantitative models can be used to address the decision aread in logistics. 1. Forecasting Models: These modles allow prediction of demand based on pst data or other parameters that are independently availble. They enable better planning give the leadtime. E.g: Judgemental or Expert estimates Casual Techniques Historical or Databased Techniques (Regression Analysis method, Moving avaerages method, Exponential Smoothing) 2. Mathematical Programming Models: Quantitative Methods and deals with Numbers. Location Model: Helps in planning the optimal location of plants or warehouses, considering the inbound and outbound transportation costs and infrastructure costs at location. Such models can be soved by integer programme or sometimes as linear programme. Allocation Model: These models help in optimal allocating commodities from sources to destinations in a multipurpose , multi dimensional environment. E.g: A vehicle vendor got order from 15 plants to deliver the production to

30 warhouses. The cost considered for optimal allocation is called as production costs, transportation costs, and warehousing costs. This allocation done by considering the constraints like demand, capacity, route, restrictions..etc Distributing Network Model: Deciding the stages and break up transit for goods. Mode of transporatation is made choice out of availabilty. It includes the material handling and inventory costs. 3. Inventory Models: Neither too high nor too low level of inventory is beneficial to heath of the comapany. So adequate levels of stock need to maintain for inbound and outbound logistics..Mostly heard and seen model under this is EOQ- Economic Order Quantity, (EOQ Model -1; Model-2 for Lots, Model -3 with quantity discount) and ABC Analysis (Always better control)- Think on the best and then on the rest. 4. Routing Model: These models allow optimal routing on a transportation network from a given source to a destination. When deliveries and collections have to be made, the model use is the travelling sales problem or vehicle routing method. E.g By using Geographical Info. System- we can make expertise decision regarding Logsitics. 5. Scheduling Models: Models enable allocation of resources to particular activities. Depending on the criteria of interest and number of resources the models help to evaluate appropriate rules for allocation. ==========================================================================================

LOGISTICS MANAGEMENT TO SUPPLY CHAIN MANAGEMENT


PHASE I: LOGISTICS DECENTALIZATION: Early period of Logistics management occurred in the period of late
19th century to 1950s. During this period enterprises did not percevie logistics as sources of competitve advantage. Logistics concerned as operations but not as strategic or fucntional. Its seen as physical distribution , warehousinf and transportation. It was considered as secondary important next to sales, marketing and production. Less qualified people are hired for logistics. Logistics is not sales or markeitng fucntion, itsnot even synonym for traffic management, not the responisibility of manufaturing. In this era, it lacks the status of professionalism, lack of training, and mentoring the required skill set to the logistics managers.Most of them evolved who lacked the aptitude or skills to make marketing and sales or finance. Logistics was departmentalized with split on the bases of transportation

PHASE I INDEPENDENT BUSINESS FUNCTION (Till 1950)

PHASE II Total cost Management: Strong manufacturing and Distribution based companies centralized the fucntions of logistics into single management system.Logistics activities are merged such as warehousing, transportation, inventory management, customer service..Etc.Comapanies began to remove control barriers of materials management, phycial distribution from the marketing and sales and production and re organize them into central logistics department under single management staff. Now the central unit of logistics concerned with total cost concept.This was emerged because of reciprocality of costs with customer service. Effective management of logistics coluld be attainedby calculating the cost trade off necessary to balance total logistics system cost with the firms marketing and sales objectives.

Maximizing of customer service never related with minimization of cost in decentralized system. Now reduction in cost are aimed but not impacting on customer service level. The total cost concept assumed that the operating costs of each of the functions of logistics were inversely proportional and that management should strive to minimize the total cost of logistics, rather focusing in reducing the costs of one or two specific logistics functions.In bad times, reduction cost in single logistic fucntion may result in increase of total logistical system costs. PHASE II- LIMITED INTEGRATED BUSINESS FUNCTION (1960-70)

PHASE III: INTEGRATED FUNCTION During 1980s , apart from minimization of cost, some experts attempted to expand enteprise fucntional integration to maximize the profits.Operational factors such as speed of delivery, value added services, product availability realized that, when organization work closely, they provide a powerful source of internal support and assist in sales and marketing in winning market share.In this phase integrated logistics system could be employed as dynamic force capable of winning customer beyond the execution of product and price objectives. In this phase logistics has greatly expanded both in numbers of fucntions that have been integrated and in the creation of strategic logistics content. (More can be explained in Integrated Supply chain)

PHASE III -INTERNALLY INTEGRATED BUSINESS FUNCTION (1980) LOGISTICS MANAGMENT

PHASE IV SUPPLY CHAIN MANAGEMENT During 1990s companies began the process of responding to new market challenges by expanding on the functions of integrated logistics management to realize new opprtunities by tapping into wide range of productive capabilities.The speed and fast changes in international markets and period of globalization , it has been increasing expectations concerning service quality, third party information and communcation technologies has forces comapanies to work beyonfd integrated logistics and starts search for strategic moves.The logisitican or logistics based comapanies tareget is not only providing world class service at lowest cost but also contnuosly explore new avenues for leveraging the productive and innovative resources to be found. PHASE IV-EXTERNALLY INTEGRATED BUSINESS FUNCTION 1990 onwards SUPPLY CHAIN MANAGEMENT

FOCUS AREAS OF SUPPLYCHAIN MANAGEMENT Minimizing Uncertainity Improving Flexibility Minimzing Variety Delaying differentiation Fcous on ACategory Modifying performance measures Moving from Functions to Process Configuration of Distribution Network Product Design Reducing Lead times and Minimizing the number of stages Improving process quality Managing Demand Kitting of supplies Planning for multiple supply chains Competing on service and customer value Taking initative at industry level SC Intergration and strategic partnering Information Technology and Decision Support

Difference between LOGISTICS and SUPPLY CHAIN MANAGEMENT LOGISTICS MANAGMENT Logistics refers to management of flow of goods and supplies involving information, data and documentation between two entities or points. Logistics play important role in post procurement function of delivery of raw material from the supplier to the point of production and Finished Goods SUPPLY CHAIN MANAGEMENT Supply chain management from the point of dispatch from factory to the point of delivery to the customer.

Includes supplier and end-user in the process Series of activities- Fragmented Operations systems Focus moving and storing activities as products and information wind their way through supply chain to customers Logistics deals with strategy and between marketing and production. Seen as Single entity Strategic planning process; strategic decision making Focus in integration of all business process that add value to customers

coordination On the other hand supply chain management focuses more on purchasing and procurement supply chain management can include factors relating to inventory, materials and production planning too in its concept On the other hand supply chain management encompasses the management of all activities involved in the procurement and conversion. In addition to these activities the supply chain management takes care of all the logistics management activities. It is important to note that supply chain management involves all movements and storage of raw materials. In short it can be said that supply chain management takes care of the design, planning, execution, control, and monitoring of supply chain activities with the sole objective of creating net value and leveraging worldwide logistics.

On the other hand logistics includes factors relating to demand management and forecasting in its concept.

Experts argue that logistics management is a part of the supply chain management that plans and implements the flow and storage of goods, services in order to meet the demands of the consumers. This is indeed an important study made by the experts.

On the other hand logistics can be simply defined as the management of the flow of goods and the services between the point of origin and the point of consumption in order to meet the requirements of customers. Logistics Management deals with planning, implementing and controlling resourceful, to and fro flow and storage of merchandise and services between the point of manufacture and the point of utilization in order to congregate customers necessities. deals with strategy and synchronization between production and advertising and promotion

On the other hand, Supply Chain Management incorporates all the manufacturing operations, scheduling and inventory control and resource management, location planning along with information technology so as to coordinate purveyors, the company, and consumers. concentrates more on purchasing and procurement.

Intersting Information and Facts


Michael E Porter is the Bishop William Laurence University Professor at the Harvard Business School.Porter was born in Ann Arbor, Michigan. His father was an army officer. He studied mechanical and aerospace engineering at Princeton and then switched to business, earning an MBA and a PhD in economics from Harvard. He later joined the faculty there.It is said that Porter has always been obsessed by Competition. Unfortunately, he slipped from the number one position he held in the 2005 list to the fourth position in the 2007 list of Management Guru. Books that he wrote: Competitive Strategy Techniques for Analyzing Industries and Competitors (1980) Comparative Advantage (1985) The Competitive Advantage of Nations (1990) Can Japan Compete? (1999) Logistics Companies of India The land which opens up wide array of opportunities for the logistics service providers across the world is India. The high demand for the logistics services is due to the significant growth of economy. A few years back the value of the India logistics market was is $14 billion and will grow at a rate of 7-8 per cent. The logistics companies in India cater to millions of retailers and meet the requirements of about a billion people. The list below gives the name of the best logistics companies in India. List of Top Logistics Companies of India: CTC FREIGHT CARRIERS PRIVATE LIMITED: This company is known for Freight Transportation Services and Transportation Warehousing Service.Also this company possess trucks and LCVs for carrying goods and ODC consignments. Transocean Express Logistic : The company is a Logistics and Supply Chain management company and is promoted by Indian logistics professionals. Velocity Logisitics : It offers services like Ocean , Warehousing, Distribution,air freight and many more.Check out the site for the same. Atlaslogistics.co.in: This company is the innovative logistics company that reaches out to provide comprehensive logistics solution.The motto is "Reaching out". Check out the site for more information. DHL : This company is one among the major logistics companies in India. It is a market leader globally in overland transport,air freight and international express. The company ranks No.1 in the world in contract logistics and ocean freight. The biggest logistics and express network in the world has a network in about 220 territories and countries,72,000 vehicles,350 Aircrafts,36 hubs and 4,700 bases. GLOBAL EXPRESS SERVICE : This company deals in international logistics and offers a robust, well-rounded suite of services to companies doing business in Asia, Europe, the Middle. Royal Logistics : This company provides reliable services to the customers and the staff includes people that are very knowledgeable and dedicated and hence offers great services to the people.

Blue Dart : This logistics company is South Asia's top integrated express package Distribution and courier company. The domestic network of the company covers about 21,340 locations and provides service to 220 countries by the company's sales alliance with DHL. It provides the best service like Free Pick up from Your location,Regulatory Clearances,Real Time Tracking,Free Computerized Proof of Delivery etc. Gati : The company is a key leader in then arena of express cargo delivery and a significant one in the supply chain management solutions and distribution in India since the year 1989.The company provides services like the WareHousing,Express Cargo etc. Logistics Solutions of the company are Warehousing,Supply chain Management. The Distribution Solutions of the company are Gati Surface Express, Gati coast to coast, Gati Air Express etc. Safexpress : It is one of the largest express company in India. The company offers the best and integrated logistics solutions. In 2002 the Limca Book of Records declared the company as the Largest Logistics service Provider in India. The company has a network over 550 locations in 28 states and 7 countries. It has 3000 weather proof ISO-9002 vehicles. Ashok Leyland : The leading provider of logistic vehicles for the India Army is this company. It is a key leader in the tractor-tailers and multi axle trucks. The company manufactures buses,trucks,engines and special application vehicles in India. It is promoting a new company called Ashley Transport Services Ltd. for exchange of information and integrated services related to logistics in order to tackle the business of freight contractors. Agarwal Packers and Movers: This popular Indian logistics company provides logistic services like the home shifting,car packing etc. across India. The company believes in keeping technology and people and of course heart and soul in the movement of the individuals respective items. The company offers quality service in transportation and packing. DTDC : The biggest Domestic Delivery Network Company is DTDC. The company offers high class delivery service in about3700 Indian locations and 240 international places. The company dispatch about 10 million parcels in a month.It also offers low cost for bigger parcels to US,UK,India,Nepal,Dubai and other places across the world. First Flight: This logistics company in India specializes in courier services world wide. The multi-tracking programs of the company are Domestic ,International,First Wheels,First Wings and many others. The overseas offices of the company are in Malaysia,Singapore,UK,US,UAE, Quatar, Oman. O M Logistics LTD: This logistics company in India provides innovative and value added solutions for Indian Corporate and Multinationals.It uses innovative and cost savings method. SAL Logistics PVT LTD: This logistics company is famous for freight forwarding by air,sea and land ofcourse. It has special cargo services,charter services and many more. INDIAN LOGISTICS INDUSTRY Globally, the logistics industry is valued at US$ 3.5 trillion. The U.S., which contributes to over 25% of the global industry value, spends close to 9% of its GDP on logistic services. The Indian Logistics Industry is presently estimated at US$ 90 billion. (CII) The industry has generated employment for 45 million people in the country in comparison with the IT and ITeS sector which employs approximately 4.3 million people. The primary growth drivers of this industry are as under:

A.Investments in the infrastructure sector amounting to US$ 350 billion: Increased efficiency and productivity of the transport system would result in lower transit times.

B.Streamlining of the indirect tax structure: The introduction of Value Added Tax (VAT) and the proposedintroduction of a singular Goods and Services Tax (GST) are expectedto significantly reduce the number of warehouses manufacturers arerequired to maintain in different states, thereby resulting in a substantialincrease in demand for integrated logistics solutions. C.Robust trade growth Strong economic growth and liberalization have led to considerableincrease in domestic and international trade volumes over the past fiveyears. Consequently, the requirement for transportation, handling and warehousing is growing at a robust pace and is driving the demand forintegrated logistics solutions. D.Globalization of manufacturing systems Globalization of manufacturing systems coupled with advancements intechnology are increasingly compelling companies across verticals toconcentrate on their core competencies and avail the cost saving potential of outsourcing. This is expected to contribute to an increase inthe need for integrated logistic solutions, which is the niche of everyThird Party Logistics Service (3PL Services) provider. The industry has been valued at US$ 125 billion in 2010. (CII) A snapshot of the FDI regulations governing the industry is as under: i. 100% FDI under the automatic route is permitted for all logistic services except services mentioned in points ii and iii below. ii. FDI up to 100% subject to FIPB approval is permitted for courier services. iii. FDI up to 49% under the automatic route is permitted for airtransport services, including air cargo services. It is pertinent tomention in this context, that Press Note 1 (2007) that is expected to beimminently notified by the DIPP proposes to increase the limit of FDI on air cargo services in 74%. The industry has been at the receiving end of increasing interest from theprivate equity sector. The year 2007 witnessed just under US$ 1 billion inprivate equity investments in this industry, representing approximately 7% oftotal private equity investments during the year, against 3% in the previous year. SUCCESS TODAY will not carry forward TOMORROW