Logistics Cost Management

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LOGISTICS COST MANAGEMENT Revenue, Cost & Margins

LOGISTICS COST MANAGEMENT 

PRESENTED BY: NAME OF THE STUDENT  ANITA AGARWAL  DHAWAL AMBANI  SUSHMA BHANDARI  KIRAN BHILARE  NILESH DESAI  SANJOG DEVRUKHKAR  BHAKTI JOSHI

ROLL NUMBER 02 03 04 06 10 11 14

MFM SEM – I (2008-11) 

PRESENTED TO:

MISS GITIKA MAYANK

LOGISTICS MANAGEMENT INDUSTRY SEGMENT



Logistics Management is that part 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 point of origin and the point of consumption in order to meet customers’ requirements.

ACTIVITIES / PRODUCTS INVOLVED 

Customs Clearance



Transportation



Warehousing (Multi location Invoicing)



Distribution & Transportation

CORE COMPETENCY AREA CORE COMPETENCY AREA Warehousing and Distribution ( Handled by self ) OTHER SERVICES To be Outsourcers on cost plus basis 

Customs Clearance: By appointing external Custom House Agent



Primary Transportation: By riding available market capacities



Warehousing: By deploying own resources in Warehouses



Distribution: Take responsibility and manage through vendor

Business Model & Products Air customs Clearance

Movement from Port to Customers

Consolidation centre

Movement from Manufacturer to Warehouse

Customer Manufacturer

Distribution & Transportation Délivre to end Customer

Sea customs Clearance & Supplier s abroad

Custom Clearance from Transportation of Sea port Cleared cargo

Transportation of manufactured good

Warehousing of manufactured goods

Transportation of warehoused goods

Final Delivery

COST MODEL 











Controlling office Common resources for managing overall business. Cost to be apportioned over each contract Resources in Location specific Activity will by part of operating cost of location. Core activity like Warehousing, will have detailed costing resources by resources. Outsourced activity will by cost plus hence only services hiring cost is considered. Each contract will have 10% overheads to take care of common resources cost. Business will be operated at nominal margin of 10 % to establish in market, as entry strategy.

INITIAL FOOTPRINT 

Controlling Office in Mumbai



Operating locations & Branches Offices at -Mumbai - Chennai - Bangalore - Delhi - Kolkata

CONTROLLING OFFICE RESOURCES 

Office 2000 sq ft



Manpower General Manager Head all India CC Head all India Transportation Head all India Warehousing and distribution Head Finance Support staff for all 5 above

OPERATING LOCATION BRANCH RESOURCES 

Office 500 sq ft



Manpower - Branch Manager - Customs Clearance - Business Development - /Operations Manager - Warehouse Manager - Proposals & Business Development Executive

-

INITIAL CORPUS REQUIRED 

Four months equivalent operating cost reflected in Revenue progression sheet & Capital Expenditure involved in Core / Warehousing activity.



INR 0000000

ASSUMPTIONS – REVENUE & COST











Customs Clearance Additional Business acquisition 20% per month Primary Transportation is with reference to Customs Clearance and will grow at same rate. Warehousing Revenue is steady and not growing throughout the year as capacity created is fix. To increase / add warehousing Revenue additional Capital expenditure need to be planned. Head Office / Controlling Office Overhead are equally apportioned over all branches. Branch Office overheads are apportioned only over business under that branch.

DETAILED ACTIVITY COSTING Core Activity : Warehousing

Warehousing Cost Model – 1

REVENUE PROGRESSION 

Year to Date (YTD) and Year End Outlook (YEO)



Revenue, Cost, Margin by Activity



Break even level for Business

Refer Revenue Progression sheet Revenue Working-1.xls

STATUTORY COMPLIANCE

ANALYSIS OF YEAR END OUTLOOK 

Product wise Profitability



Branch wise Profitability



Break even for each branch



Break even for all India Business

Each partner to present one branch.

PLAN FOR NEXT YEAR 

Out of other three outsourced Activities convert one activity to be handled in house through your own resources.



Carryout detailed study on Resources and Costing for Customs Clearance.



Start Inducting Resources in Company suits to this business plan.

BIBLIOGRAPHY

www.google.com www.wikipedia.org Expert Personnel from Logistic Industry

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