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LOGISTICS MANAGEMENT

LOGISTICS MANAGEMENT. Dr. Ranjan Ghosh Indian Institute of Management Calcutta. OVERVIEW

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LOGISTICS MANAGEMENT

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  1. LOGISTICS MANAGEMENT Dr. Ranjan Ghosh Indian Institute of Management Calcutta

  2. OVERVIEW • LOGISTICS …………IS “THE PROCESS OF PLANNING IMPLEMENTING AND CONTROLLING THE EFFECTIVE AND EFFICIENT 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.” • ( COUNCIL OF LOGISTICS MANAGEMENT/USA) • ITS ORIGINS BELONG TO MILITARY OPERATIONS RELATING TO THE COMPLETE SYSTEM OF MOVING, SUPPLYING AND QUATERING TROOPS AND ALL THE RESOURCES THEY NEED. • IN TODAY’S HIGHLY COMPETITIVE INDUSTRIAL SCENARIO OF GLOBAL COMPETITIVENESS, LOGISTICS HAS TRULY BECOME A STRATEGIC WEAPON AND MOST IMPORTANT FACTOR IN THE SUPPLY CHAIN

  3. Overviw (continued) • Some Estimates for India • LOGISTICS SPENDUS $ 50 B • SHARE OF GDP 12 - 13 % • MAJOR ELEMENTS ARE ( % AGE OF TOTAL ) : • TRANSPORTATION 35 • INVENTORIES 25 • PACKAGING 11 • HANDLING & WAREHOUSING 9 • OTHERS 6 • LOSSES 14 • 100 • LOGISTICS COSTS CAN BE 6 - 7 % OF GROSS SALES FOR AN INDUSTRIAL ORGANISATION , AND CAN GO UP TO 14 - 15 %. FOR SECTORS LIKE CEMENT AND BULK MATERIALS.

  4. LOGISTICS SERVICE PROVIDES ARE: ROAD TRANSPORTATION COMPANIES / TRUCKERS RAILWAYS, SHIPPING, AIR CARGO / AIR FREIGHT COMPANIES, MULTI MODAL TRANSPORT PROVIDERS, PORTS, 3 PL COMPANIES AND, OTHERS LIKE : CUSTOMS CLEARANCE AGENTS FREIGHT FORWARDERS AND CONSOLIDATORS WARE HOUSING COMPANIES INTERMEDIARIES AND CONSULTANTS ETC.

  5. ROAD TRANSPORT : • LARGEST PROVIDER OF TRANSPORTATION OF GOODS TODAY. • HIGHLY FRAGMENTED INDUSTRY • POOR ROAD CONDITIONS • LOW SERVICE LEVELS • INTENSE COMPETITION • HIGH OPERATING COSTS • FALLING MARGINS • EMERGING TRENDS : • DISMANTLING OF APM OF PETROLEUM PRODUCTS IN APRIL 2002. • NATIONAL HIGHWAY DEVELOPMENT PROGRAMMES (NHDP) • A. GOLDEN QUADRILATERAL PROJECT BETWEEN 4 METROS, BY 2003 • B. NORTH - SOUTH • & • EAST - WEST CORRIDORS , BY 2007

  6. ROAD TRANSPORT :-EMERGING TRENDS ( Contd…..): • SHIFT TOWARDS MHCV ‘S FROM LCV’S - HEAVY DUTY VOLVO, TAURUS TRUCKS ETC. • CONSOLIDATION • TRACING / TRACKING FACILITIES • VALUE ADDED SERVICES • 3 PL SERVICES • KEY PLAYERS

  7. RAIL TRANSPORT • GOVT.MONOPOLY • 2ND LARGEST NETWORK IN THE WORLD • EXTENSIVE NETWORK • BUILT- IN INEFFICIENCIES • MINIMUM BULK LOT REQT. • NEED FOR SUPPORT FACILITIES - EQUIPMENTS, LOADING/UNLOADING, DELIVERY • USEFUL FOR BULK AND TIME SENSITIVE CARGO • EMERGING TRENDS • CHANGE IN APPROACH - e.g. INTRODUCTION OF NEW FREIGHT TRAINS • EMERGENCE OF MULTI MODALFACILITIES e.g. CONCOR EXPERIENCE • LINKAGE WITH INDUSTRIES ETC.

  8. AIR TRANSPORT • AIR LOGISTICS INCLUDE • AIR CARGO • EXPRESS • COURIER • DOCUMENTS • LOW SHARE IN INDIA’S LOGISTICS SCENE, STILL LIMITED IN SCOPE • FACTORS FOR GROWTH ARE : • REDUCTION OF FARES AS COSTS DECLINE • IMPROVEMENT IN SERVICE OFFERINGS / NEW ROUTES / INCREASED FREQUENCIES • INCREASE IN GLOBALISATION AND TRADE • INFRASTRUCTURE AND FACILITIES AT INDIAN AIRPORTS

  9. AIR TRANSPORT( CONTD….) • KEY PLAYERS : • AIRLINE INDUSTRY • FREIGHT FORWARDERS / CONSOLIDATORS • INTEGRATED SERVICE PROVIDERS • FED EX • UPS • DHL • TNT ETC.

  10. SHIPPING • GLOBALLY, SHIPPING MOVES 95% OF INTERNATIONAL TRADE, THOUGH INDIA’S SHARE IS MINISCULE. • INDIA HAS DIVERSIFIED MERCHANT FLEET OF • TANKERS • BULK CARRIERS • CONTAINER SHIPS • SPECIFIED MULTIPURPOSE VESSELS & OFFSHORE SUPPLY VESSELS • INDUSTRY TRENDS : • FALLING FREIGHT RATES • GROWTH IN CONTAINER TRAFFIC • FEEDER SERVICES FROM HUB POINTS • SCOPE OF COASTAL AND INLAND SHIPPING IN INDIA • MULTIMODAL LOGISTICS • BETTER SERVICE DEMANDS

  11. PORTS IN INDIA - ABOUT 12 MAJOR PORTS - LOW EFFICIENCY - HIGH TURN AROUND TIME - HIGH COST STRUCTURE - CUSTOMS BOTTLENECKS - POOR INFRASTRUCTURE EMERGING TRENDS - NEW PORTS e.g. JNPT, TUTICORIN ETC. - IMPROVED FACILITIES - PRIVATE PARTICIPATION AT PORTS e.g. NSICT BY P&O PORTS TUTICORIN BY PORT OF SINGAPORE AUTHORITY.

  12. OUTSOURCING & 3 PL’S : - - COST REDUCTION - MAXIMISING REVENUES - IT FACILITIES - COST CONTROLS - ROAD BLOCKS - EMERGING TRENDS

  13. IN CONCLUSION : - - IN TODAYS’ BUSINESS ORGANISATION, LOGISTICS IS ONE OF THE FEW CRUCIAL DIFFERENTIATORS SIGNIFICANTLY ENHANCE VALUE TO THE CUSTOMERS. - THE NEW MODELS OF BUSINESS MEAN GLOBALISATION THROUGH CONNECTIVITY , DEREGULATION OF ECONOMIES AND MARKETS AND DIGITALISATION OF TECHNOLOGY AND THEREFORE, INTEGRATED LOGISTICS BECOMES A STRATEGIC WEAPON FOR BUSINESS ORGANISATION.

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