Importance Of Logistics Management And Emerging Trends

By Kritika – 47 Madhujith T.H – 49 XIME, Bangalore Batch 2008-10

LOGISTICS MANAGEMENT AND EMERGING TRENDS





Logisticsis that part of the supply chain process that plans, implements and controls the 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 the customer’s requirements.

Elements  Transportation

– air, water, land

 Warehousing  Inventory

Management  Packing and Utilization  Information and communication

Importance of Logistics Management  Transportation

costs  Large retailers, low distribution costs – eg. Metro Cash and Carry  Deregulation – e.g. Fiat – Tata  Changing strategies – eg Toyota Way  Technology – eg. Wal-Mart, DELL  Globalization

 0%

fuel  0% technology  0% investment  0% dispute  99.9999 % performance  100% customer satisfaction

‘The Show must go on’

THE WONDER OF MUMBAI DABBAWALAS

What is NMTBSA??  Nutan

Mumbai tiffin box supply Association.  It started in 1880 – british raj  Total area coverage is 60 kms.  5000 employees  Each person working is a share holder  4,00,000 transactions per day  Time taken – 3hrs.  

 Six

sigma performance  ISO 2000 certified  Error rate 1 in 16 million transactions.  Technological backup: Nil  Cost of service: Rs. 200/month  

How do they do it??  Organisational

structure

   Logistic

management

Executive committee (5 members)

Team of 20 to 25 people headed by a group leader

Individual dabawalas=30 tiffins/day

Logistic Management  

9.30 am The “pick up” people pick up the tiffin boxes from house wives

   



10.34 – 11.20 am This period is actually the journey time. Dabbawalas load the wooden crates filled with tiffin box in the luggage and goods compartment.

11.20 to 12.30 pm The unloading takes place at the destination station. The “delivery” people unload the boxes from the train And re-arrangement of tiffin boxes are done as per the coding. 

 

12.30 to 1.00 – lunch time

Coding  The

coding indicates  the originating rail station  the destination station  the building name  the floor number of delivery  POKA-YOKE techbique- color indicates the group responsible for collecting dabba at particular point. 

 1.15

to 2.00 pm

 

Here begins the collection process.

 



The dabawalas collect the tiffin from the offices where they have delivered almost an hour back.

 2.00

to 2.30 pm

 

the return journey

 



The group members meet at the segregation as per the destination.

 2.48

to 3.30 pm

 

The return journey by train

 



Group finally meets up after the day’s routine of dispatching and collecting from various destination offices.

 3.30

to 4.20pm Here the final sorting and dispatching takes place. The group finally meets up at the origin station The tiffins are finally sorted out as per their original areas. This is again done through the coding process.

Latest Trend  The 

Web site (www.mydabbawala.com) – online booking on line poll



  Booking 

through SMS

The royal visit  Prince

of Wales

 

 Sir

Richard Branson, chairman of Virgin Atlantic Airlines.

CASE STUDY Every day Amul collects 447,000 litres of milk from 2.12 million farmers, converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country

GCMMF  Gujarat

Cooperative Milk Marketing Federation (GCMMF) is the largest food product marketing organization of India.  aims to provide good returns to the farmers and also to fulfil the requirements of consumers by giving them quality products  has 42 regional distribution centers in India, serves over 500,000 retail outlets and exports to more than 15 countries 

Problems to be addressed:  Logistics  

in collection of: 6 lts of milk everyday from 10600 separate villages



 Logistics 

in co ordination of : storing ,processing and delivering the milk.

 Suppliers   

Logistics: Weighing the milk Determining the fat content Calculation of purchase price

The Need  formulate

an IT plan

  Integrate

its existing applications with ICT

tools   Connect

its regional and field offices through e-media

Implementation  Amul

started implementing ERP in phases.

  Automatic

milk collection system units (AMCSU) at village societies were installed to automate milk producers logistics.

 

 At 

milk collection counter - farmer drops the card

 

- milk is weighed

 

- calculates amount due to farmer

 

- value of milk is printed

 Amul

connected its zonal and regional offices through VSATs.

  Amulis

also using GIS (geographic information system) for business planning and collection process.  IIM-A provided Amul with a software-Dairy information system kiosk(DISK) to facilitate data analysis and decision support in improving milk collection. 

Indian Railways 

Largest network under management  Revenues: 12 billion $  Passengers: 14 million/day (approx)  Freight: 2 million tons/day (approx)  Manpower: 1.4 million 



Indian Railways Contd….  Track

– 63000 km

  Around

7000 – 8000 stations



  

Freight: 2 million tons/day (approx)

Long Range Decision Support Systems  Used

to manage and plan strategies for

IR  Implemented in 1998  Public – private partnership

World bank + IR personnel + overseas

consultants  Powerful

tool for pre-feasibility investment analysis for networks

Long Range Decision Support Systems Contd….  Based

on traffic projections over the next two decades  UsesØ Simulation Models Ø Optimization tools Ø GIS based interface Ø Develop ‘what if scenarios’ Ø Demand and supply side

LRDSS MODEL

PROJECT IDENTIFICATION

SUPPLY

TRAFFIC FORECASTING

ANALYSIS

FACILITY PERFORMANCE

MARKET ANALYSIS

DEMAND ANALYSIS

TRAFFIC ASSIGNMENT

COST BENEFIT ANALYSIS FINANCIAL FORECASTIN

  

Solutions Providers

New Needs, New Players  Solutions

Providers – with the increased importance of logistics management, a new market opened and there are companies that solve the logistics management problems. Oracle Infosys FedEx – case study DHL etc

Solutions Providers   Oracle

– Transportation Management Systems  It integrates and streamlines Ø transportation planning, execution, freight payment, and business process automation  Single application

Oracle – Transportation Management Systems    Oracle

Transportation Management Ø Lowers transportation costs Ø Improves customer service and asset utilization

Solutions Providers q Infosys – Master Data Management Enables Logistics Service Providers

(LSPs) to efficiently manage revenues, expenditure, shipment, and large ERP implementations.



qIBM – RFID later case study  

 



Emerging Trends

1.Case Study: q FedEX started Virtual Order – Online B2B site.

q qShippers can setup an online catalog of goods that consumers can order from. qFedEx setup Express Distribution Centres like Dubai, Philipines. q qFedEX systems are fully integrated with that of the shippers q q q

C a se S tu d y : 

Customer places the order.

 

Shippers notified

 

Order Enters into FedEx network.

 

Order collected from a variety of shippers.

 

Within 48 hours delivery to customer

 

Mainly for High Value, low weight goods like electronic and medical goods

Emerging Trends 

2. Two Dimensional Bar Codes

 

1D BarCode

2D BarCode

2. Two Dimensional Bar Codes  1D

barcode contains only vertical lines  2d barcodes contain both horizontal and vertical lines  Can store information of an entire freight  Uses laser scanners to read. Currently not available.

3. Going Green   Use

software that minimizes carbon emissions and cost savings

  Eg

– by incorporating algorithms that include data about location and date to consolidate shipments by size, product compatibility and trailer types

3. Going Green     Case

Study:

   DHL’s

green initiative by implementing multi site ISO 14001 q Bought 1.3 billion Euros worth of new fleet ―Planes quieter, more fuel efficient q Reduced carbon dioxide emissions by 6.864 tons q Improved waste management  Over 53% general solid waste recycled

4. RFID Two types:  Active – contains battery and transmits signals  Passive – no battery, requires external source  Famous example :Wal – Mart



RFID Services   Integrate

real-time data capture with business processes to reduce time to market  Track mobile assets to reduce loss and theft  Optimally manage work in process and logistics networks  Build a secure, responsive and flexible supply chain—to ultimately deliver value to your end customers 