Importance and Decision - Distribution channels, Principles of Marketing Video Lecture | Principles of Marketing - B Com

Logistics it is defined as the art and
science of obtaining producing and
distributing material and product in the
proper place and improper quantities
logistics management it is the parts of
supply chain management that plans
implements and controls the efficient
effective forward and reverse flow and
storage of goods services and related
information between the points of origin
and the points of consumption in order
to meet customers requirements
difference between supply chain and
logistics transforming a raw material
into products and getting it to
customers is supply chain
whereas movement of materials in the
supply chain is logistics the seven
hours of logistics the most popular
concepts of logistics management is the
concept of the seven ARS it is concerned
with getting the right product in the
right quantity in the right condition at
the right place at the right time to the
right customer and at the right price
Logistics functions following the areas
of logistics management contribute to an
integrated approach to logistics within
supply chain management transportation
many modes of transportation play a role
in the movement of goods through supply
chains via air rail road water or
pipeline selecting the most efficient
combination improves the value created
for customers warehousing when inventory
is not on the move between locations it
may have to spend some time in a
warehouse warehousing is the activities
related to receiving storing and
shipping materials to and from
production or distribution locations
third and fourth party logistics third
party logistics providers actually
perform or manage one or more logistics
services fourth party providers are
logistics specialists and play the role
of general contractor by taking over the
entire logistics function for an
organization
reverse logistics it is a way to handle
the return reuse recycling or disposal
of products that make the reverse
journey from the customer to the
supplier
Logistics value proposition managers
must be able to balance logistics costs
against the appropriate level of
customer service logistics are usually
managed as an integrated effort to
achieve customer satisfaction at the
lowest total cost therefore service and
cost minimization are two key elements
in logistics value proposition logistics
goals and strategies logistics shares
the goal of supply chain management to
meet customer requirements there are a
number of logistics goals the most
experts agree on respond rapidly to
changes in the market or customer orders
minimize variances in logistics service
minimize inventory to reduce costs
consolidate product movement by grouping
shipments maintain high quality and
engage in continuous improvement and
support the entire product lifecycle and
the reverse logistics supply chain an
effective logistics strategy depends on
the following tactics coordinating
functions that is transportation
management integrating the supply chain
substituting information for inventory
reducing supply chain partners to an
effective minimum number and pooling
risks
substituting information for inventory
it is one of the tactics used to design
effective logistics strategy it requires
taking a series of steps to construct
the logistics network step 1
locates in the right countries first
identify all geographical locations and
then analyze your forward and reverse
chains to see if selecting different
geographic locations could make the
logistics function more efficient and
effective step to develop an effective
export import strategy determine the
volume of freight and units that are
imports and exports and decide where to
place inventory for strategic advantage
step 3 select warehouse locations
determine the number of warehouses
calculate optimal distance from markets
and establish the most effective
placement of warehouses around the world
step 4 select transportation modes and
carriers determine the mix of
transportation modes that will most
efficiently connect suppliers producers
warehouses distributors and customers
step 5
select the right number of partners
select the minimum number of firms
freight forwarders and third or fourth
party logistics to manage forward and
reverse logistics step 6
develops state-of-the-art information
systems it reduces inventory costs by
accurately and rapidly tracking demand
information and the location of goods
substituting information for inventory
it is another tactic used to design
effective logistics strategy physical
inventory can be replaced by better
information in the following ways
improve communications talk with
suppliers regularly and discuss plans
with them collaborate with suppliers use
continuous improvement tools and share
observations about trends
track inventory precisely it could be
done by using GPS and barcode systems
keep inventory in transit it reduces
inventory costs for example cross
docking use postponement centers avoid
filling warehouses with the wrong mix
have finished goods by setting up
postponement centers to delay product
assembly until an actual order has been
received mix shipments to match customer
needs match deliveries more precisely to
customer needs by mixing different SKUs
on the same pallet and by mixing pallets
from different suppliers and don't wait
in line at customs reduce the time spent
in customs by clearing freight while
still on the water or in the air
reducing supply chain partners to an
effective number the more partners there
are in the chain the more difficult and
expensive the chain is to manage
consider a supply chain of three
excellence
between factory and customers two
factory warehouses nine wholesale
warehouses and 350 retail stores
reducing the number of partners reduces
operating costs cycle time and inventory
holding costs when consider reducing the
logistic partners look for an entire
epsilon such as all the wholesale
warehouses or factory warehouses but if
you eliminate all partners as you would
be back to the vertical integration
strategy
pooling risks when manufacturers and
retailers experience high variability in
demand for their products they can pull
together common inventory components
associated with a broad family of
products to buffer the overall burden of
having to deploy inventory for each
discrete product this is called pooling
risks this reduces storage costs and
risks of stock outs by consolidating
stock in centralized warehouses flow of
goods and information these flows exist
in each supply chain Enterprise must
have internal process integration and
collaboration between functions as well
as alignment and integration across the
supply chain customer information flows
through the enterprise via orders sales
activity and forecasts value-added flow
of goods begins as products and
materials are procured
you