Abstract

Logistics management is increasingly becoming a topic of interest among academicians

and practitioners, since it may lead to reduced operational costs, improved delivery
performance and increased customer satisfaction levels. The global logistics industry is
estimated to be worth USD 300 billion. Though most of the large service providers are
headquartered in Europe, the biggest market is the US, which captures about one-third
of the world market. The global logistics industry is characterized by high costs of
operations, low margins, shortage of talent, infrastructural bottlenecks, demand from
clients for investing in technology and providing one-stop solutions to all their needs,
and consolidation through acquisitions, mergers and alliances. The logistics industry in
India is evolving rapidly and it is the interplay of infrastructure, technology and new
types of service providers that will be define whether the industry is able to help its
customers reduce their logistics costs and provide effective services (which are also
growing). Changing government policies on taxation and regulation of service providers
are going to play an important role in this process. Coordination across various
government agencies requires approval from multiple ministries and is a road block for
multi modal transport in India. At the firm level, the logistics focus is moving towards
reducing cycle times in order to add value to their customers. Consequently, better tools
and strategies are being sought by firms in order to enhance their decision making. In
this paper, we provide a perspective on these issues, outline some of the key challenges
with the help of secondary information, and describe some interesting initiatives that
some are required to compete through excellence in managing their logistics.

Inbound and Outbound

Introduction

Inbound logistics refers to the internal logistics tasks and activities that businesses need
to complete in order to operate. Inbound logistics usually refers to the logistical operations of
companies that operate fairly upstream (B2B).

In terms of the supply chain, it involves the relationship with parties that operate further
upstream than the given business. Depending on the business, the parties that operate
upstream may vary dramatically in their respective operations.
 For example, consider being a car manufacturer. The manufacturer’s inbound logistics
would entail the sourcing of raw material inputs (sheet metal, glass, wiring, plastics, etc.),
how to store the materials in preparation for and during the assembly process, and how to
manage the flow of manufactured automobiles that leave the factory.

From the perspective of an upstream player, say for example the metal foundry that
produces the sheet metal, the inbound logistics would vary. The inbound operations would
include sourcing raw materials such as metal ores, storing and using the materials in
production, and managing the flow of completed products.

Outbound logistics refer to the tasks and activities involved with moving the product to
the end user. Such types of logistic duties usually apply to players that operate relatively
downstream, which are usually the last party in the supply chain. The duties include the
storage of manufactured inventory, the transportation of manufactured goods to the point of
sale, and sometimes, the shipping and handling involved to get certain products to the end
user.

Going back to the auto manufacturer example, the parties involved with the outbound
logistics of that supply chain would be the wholesalers and dealers. The factory operations
would be in charge of assuring that the right amount of ordered inventory arrived at the dealer
at a given time.

In turn, the dealer would be in charge of coordinating the storage and upkeep of the
vehicles on its lots, as well as the shipping and handling of vehicles that are ordered by
customers that live in faraway areas.

Supply Chain Management

The term “Supply Chain Management” was coined in 1982 by Keith Oliver of Booz,
Allen and Hamilton Inc. But the discipline and practice has been in existence for centuries.

The terms Logistics and Supply Chain Management are used interchangeably these days,
but there is a subtle difference that exists between the two.

‘Logistics’ has a military origin, and used to be associated with the movement of troops
and their supplies in the battlefield. But like so many other technologies and terminologies, it
entered into the business lexicon gradually and has now become synonymous with the set of
activities ranging from procurement of raw materials, to the delivery of the final polished
good to the end consumer.

In a typical business scenario, many organizations work in tandem (knowingly or

unknowingly) to get the final product in hand of the end consumer. The supply chain is a
network of these organizations that coalesce with each other (downstream or upstream) to
make the final shipment successful.

A group of farmers, a cotton mill, a designer and a tailor is the least number of
stakeholders you can expect from a regular shirt you wear every day.

What is Supply Chain Management?

Supply chain management, as explained by Michigan State University professors

Donald Bowersox, DavidCloss and M. Bixby Cooper in Supply Chain Logistics
Management, involves collaboration between firms to connect suppliers, customers, and
other partners as a means of boosting efficiency and producing value for the end consumer.
The book considers supply chain management activities as strategic decisions, and set up “the
operational framework within which logistics is performed.”

It is the efforts of a number of organizations working together as a supply chain that helps
manage the flow of raw materials and ensure the finished goods provide value. Supply
chain managers work across multiple functions and companies to ensure that a finished
product not only gets to the end consumer but meets all requirements as well. Logistics is just
one small part of the larger, all-encompassing supply chain network.

What is Logistics?

The Council of Supply Chain Management Professionals defines logistics as “part of

the supply chain process that plans, implements and controls the efficient, effective forward
and reverses flow and storage of goods, services and related information between the point of
origin and the point of consumption in order to meet customer’s requirements.”

Bowersox, Closs, and Cooper define logistics as activities – transportation,

warehousing, packaging and more – that move and position inventory and acknowledge its
role in terms of synchronizing the supply chain.

The objective b3ehind logistics is to make sure the customer receives the desired
product at the right time and place with the right quality and price. This process can be
divided into two subcategories: inbound logistics and outbound logistics.

Inbound logistics covers the activities concerned with obtaining materials and then
handling, storing and transporting them. Outbound logistics covers the activities concerned
with the collection, maintenance and distribution to the customer. Other activities, such as
packing and fulfilling orders, warehousing, managing stock and maintaining the equilibrium
between supply and demand also factor into logistics.

Logistics and Supply Chain Management (SCM)

 Logistics is generally seen as a differentiator in terms of the final bottom line of a
typical “hard and tangible goods” organization; enabling either a lower cost or providing
higher value.

While a lower cost is mostly a one-time feel good factor and has been the traditional
focus area in logistics, high value comes into the picture much later and may be tangible or
intangible in a good’s initial stages.

So while an organization like Zippos may look costly at a first glance, the extraordinary
customer service due to robust policies is a value which more than offsets the slightly higher
cost.
Logistics is concerned with both materials flow and information flow. While the
materials flow from the supplier to consumer, the information flows the other way round. It is
not only concerned with inventory and resource utilization, customer response also falls
under the ambit of logistics.

In simple terms, logistics can be seen as a link between the manufacturing and
marketing operations of a company. The traditional organizations used to think of them
separately, but there is a definite value addition in integrating the two due to the
interdependence and feedback channel between the two.

The level of coordination required to minimize the overall cost for the end consumer
gets tougher to achieve as the number of participants in a supply chain increase, as an
extremely efficient flow of material and information is required for optimization.

Logistics cover the following broad functional areas: network design,

transportation and inventory management.
Manufacturing plants, warehouses, stores etc. are all facilities which form key
components in the network design. Transportation: the cost and consistency (reliability)
required out of the transportation network determines the type and mode of the movement of
goods and also affects the inventory.

Buffer (or safety) stock is the reserve stock held to safeguard against shortages or
unexpected surge in demand, to avoid “stock-outs”. Fewer inventories with negligible stock-
outs the hallmark of an efficient logistical system.
 2. Overview

2.1 Global Scenario

Logistics is one of the most important basic industries for any economic growth as it
the management of the flow of products from the place of their origin to the place of
their consumption, thus the industry also involves the integration of material handling,
warehousing, packaging, transportation, shipping security, inventory management, supply

chain management, procurement, and customs service. The global logistics industry mainly
comprises a complex range of freight and cargo related transportation sectors, such as
shipping, warehousing, courier, and road/rail/air freight.

According the report from C and M Research, the total global logistics market reached a
value of about $4 trillion in 2013, representing an almost 10% of global GDP. The global
transportation services market is fastest growing sector with more 7% year on year growth
since 2011, now it is expected to generate revenue of 3.8% trillion in 2016. The US currently
accounts for more than a 42% of global transportation services sector.

Over the next few years the global logistics market will see the growth in demand away from
traditional Western economies to the emerging markets of China, India, other Asian

2.2. Indian Scenario

The Logistics sector in INDIA has today become an area of priority. One prime reason
for the same stems from the reason that years of high growth in the Indian economy
have resulted in a significant rise in the volume of freight traffic moved. The large
volume of traffic has provided for growth opportunities in all facets of logistics
including transportation, warehousing, freight forwarding, express cargo delivery,
container services, shipping services etc. The growth path also suggests that increase
demand is being placed on the sector to provide the solutions required for supporting
future growth. Strength of the logistic sector is likely to be one of the key determinants
of the pace of the future growth of the economy. The market size of the logistics sector
in INDIA is estimated to be between USD 90-125 billion. Given that the Indian economy
has grown to over USD 1.73 trillion, these estimates may already be well below the
actual size of the industry. Sources estimates that the industry employs over 45 million
people and is going at the rate of 15% with sub-sector growing at even 30-40% per
annum. Due to these reasons the Indian logistics sector is viewed as one of the most
attractive in the world. Recent policies by the government attract a strong growth area
for logistics in the future. Despite holding promise the logistics sector in India remains

Warehouse Management System (WMS)

A warehouse management system (WMS) is a software application that helps control

and manage the day-to-day operations in a warehouse. WMS software guides inventory
receiving and put-away, optimizes picking and shipping of orders and advises on inventory
replenishment. A warehouse management system can be a standalone application or part of
an Enterprise Resource Planning (ERP) system.

What Can a Warehouse Management System Do?

In the beginning, warehouse inventory management systems could only provide simple
functions, mostly just storage location information. Nowadays, the breadth of WMS
functionality can vary greatly, from basic best practices in pick, pack and ship functionality to
sophisticated programs coordinating advanced interactions with material-handling devices
and yard management.

A warehouse management system can reduce the likelihood of errors that could occur
when a product is shipped. The system can also help a company fulfil orders more rapidly
and instantaneously trace ordered products within the warehouse.

In the end, the overall goal of warehouse management system software is to achieve a
paperless environment that directs your employees automatically on the optimal picking, put-
away and shipping of your products.

The benefits of a comprehensive warehouse management system include:

 Reduced fulfilment time

 Increased inventory accuracy
 Improved customer service
 Greater space utilization
 Increased warehouse productivity
 Reduced labour cost

Basic concepts of Logistics and SCM

Inventory Planning
Organizations want to minimize the inventory levels due to its almost linear
relationship with the cost. Yet if the demand is forecasted accurately, there would ideally be
no need for inventory and the goods will move seamlessly from warehouses to customers.
 That would have been awesome, but it is deep into the ideal world zone. In the real world,
the forecasted numbers can only take you so far and some inventory has to be maintained
to satiate any surges in demand; the cost of unhappy consumers who are not serviced is
often huge, and is immeasurable in most cases.

 Yet overstocks lead to increase in working capital requirements, insurance costs and
blocked resources which could have been productive someplace else.

 Making a business forecast has largely been a gut-based process, but is changing rapidly
in the era of data-based decision making. The forecast depends on the historical baseline
for sales, seasonality (soft drinks have higher sales volume in May), recent trends
(Samsung is losing out to competitors when it comes to phones, a declining trend),
business cycles (economies go through expansion and contraction every few years),
promotional offers (up to 50% off can drive the average fashionista mad) etc.

Transportation

The kind of transportation employed by an organization is a strategic decision (it

usually accounts for around 1/3rdof the total logistics cost) based on the required level of risk
exposure, customer service profiles, geographic area covered etc. Truck shipments take more
time for delivery compared to air transport (customers with relaxed turnaround times); is
cheaper but necessitates maintenance of higher inventory levels.

 Transportation serves the purpose of not just product movement, but storage as well (not
very intuitive). Time spent for delivery means saved time for warehousing, and many
times the cost to offload and reload shipments can be greater than the cost of letting the
goods stay in the transportation vehicles itself.

 Two basic thumb rules apply for transportation decisions: truck load (TL) shipments are
better than less-than-truckload (LTL) shipments as storage space is a perishable
commodity (just like a commercial airline does not want to fly with empty seats), and the
cost per kilometre decreases as the distance increases (two 500 km shipments is usually
more expensive than a single 1000 km shipment).

 The factors which determine the economies of transportation decisions include but are not
limited to: distance between the starting and destination points, and density (higher density
 products take less space — space constraints outweigh weight constraints by a huge
margin), stow ability (spherical packaging will lead to more empty spaces compared to
cubical) and volume of the goods. Different modes of transport serve different strategic
ends (rail, road, air, water etc).

 Flipkhart has eKart for its logistical operations and warehousing, whereas smaller e-
commerce players generally outsource their operations to specialized logistics players
such BlueDart, DHL and now Delivery.

 3.1 Transport Related Challenges

 In India road has become predominant mode of transportation of freight
cargo. Estimate
 of the modal movement of cargo highlights that in India nearly 60.2% of
the cargo is moved
 By road, 32.1% by rail, and rest by the coastal shipping, airways and
inland waterways.
 Pipelines constitute a very minor proportion.
 

Packaging
The end goals differ: can either be done for end consumers or for logistical
considerations. The packaging will then depend on the end goal; form factor plays the lead
role when packaging goods for the end consumers, while function plays the lead role in
packaging for logistical operations.

Warehousing Management

It is the back-end building for storing goods. Based on the needs of the organization, it
can be in-house or outsourced.

 Primary functions of a warehouse are product movement and storage. Activities such
as offloading of the goods coming from the suppliers, the intermediate packaging (if
required), and shipping to other destinations (retailers or end consumers) are handled
in the warehouse. Similarly, they can also serve as a storage house for handing peak
consumer demand to avoid stock out of items, and acts as a buffer between the
 starting point (usually manufacturing plant) and ending point (think about a typical
retail outlet).

 Different distribution strategies can be adopted by an organization based on its needs

and infrastructure in place, namely:

 Cross-Docking: Relies on minimal processing at the warehouse level and facilitate

seamless connection between “incoming” and “outgoing” goods through technologies
such as bar code scanners; becoming increasingly important due to established
structured communication between retailers and manufacturers; best for high velocity
goods with predictable demand patterns.
 Milk Runs: The delivery guy is out to deliver items from a single supplier to multiple
retailers or to pick up items from multiple suppliers for a single retailer (An Indian
Doodhwala can literally teach a thing or two about this, hence the naming we think).
 Direct Shipping: A supplier directly ships to a particular retailer without any
intermediaries. Mostly happens with big-name stores with huge good volumes, and
very frequent replenishments. Big savings on time.
 Hub and Spoke Model: Hub serves as the central node for nearby places, and the
spokes depend on the hub for their needs (think of a metropolitan and various tier-2
cities in its proximity).
 Pooled Distribution: Region is the most important factor driving this strategy.
Delivers to every destination point in a geographical area, smart for handling peak
time loads and LTL shipments. Plus one for the planet as a bonus!

OBJECTIVES OF TRAINING
(i) To provide job related knowledge to the workers.

(ii) To impart skills among the workers systematically so that they may learn quickly.

(iii) To bring about change in the attitudes of the workers towards fellow workers,
supervisor and the organization.

(iv) To improve the productivity of the workers and the organization.

(v) To reduce the number of accidents by providing safety training to the workers,
(vi) To make the workers handle materials, machines and equipment efficiently and
thus to check wastage of time and resources.

(vii) To prepare workers for promotion to higher jobs by imparting them advanced
skills.

Training methodology

Training Methodologies Evolution

The training methodology deals with the methods aimed to design and implement
training. It must be separated from the “method” because it can be defined as a body of
practices, procedures and rules used by those who work following a “discipline”. The
method can be define as a means or a way of proceeding, regularly and systematically to
achieve something; “Feeling the road traced”. In the 70’s, training took place in the
classroom.

Towards the 80’s the dynamics of learning were not only based on the passage of the
contents but above all on emotional and relational processes. Training is presented as
an integrative function and a help in the management career path.

In the 90’s the formation moved out of the classroom: the Outdoor Training methods
and exercises spread out solving difficulties not only intellectual but also experiential.

Since the early 2000s the formation went beyond the classroom by combining
experiences of “classroom” with active and outdoor teaching methods with experiential
learning and communication processes.

Today there is no more competition between classroom methods and outdoor methods
and the methods are not replaced but integrated: “re-mediation.” The firm uses teams
of specialists, Project Leader with a plurality of roles and expertise in back-office
(content providers, educators) and front office (teachers, coaches, tutors, operators
desk). The needs are: developing human capital with business counseling, tutoring,
experiential learning, E-learning, assistance and personalized support.

The Distance Learning is defined as “the set of teaching methods in which, due to the
physical separation between teachers and learners, teaching interactive phase (stimulus,
explanation, questions, guide), also like the pre-active (choice of targets, completing the
curriculum and teaching strategies), is conducted through paper, mechanical,
electronic.

The advent of computer networks leads to the introduction of the new concept of
Distance Learning Online, i.e. the distance education based on the principle of
computer-mediated communication, and therefore the possibility of an exchange of
ideas and information among people, regardless of place and time of interaction,
leading to the transformation of information into new knowledge .

The network acquires a new perspective: not only taken as a transmission tool for
teaching materials, but above all as a place where learning processes, characterized by a
high degree of interactivity between all the actors involved, are created. Distance
Education has begun to represent a mode of communicate through which it is possible
to satisfy a demand for more and more generalized training in the specialization and
retraining programs.
 INDUSTRY PROFILE

LEADERSHIP

Mr. V.S.P. Solaimalai Pitchai B.Sc. is a science graduate,

with vast experience in marketing and logistics. Being an
Entrepreneur for more than 40 years now, he has expertise in
automobile industry, warehousing distribution, transportation,
and human resource management. He has been honoured and
recognized by multinational and Indian companies for driving a
consistent growth every year.

Mr. S.P. Anand is a Computer Engineering graduate from PSG

college of Technology, Coimbatore and a MBA Graduate from
Swinburne University, Australia. He has expertise in opportunity
evaluation, new venture creation and strategy formulation. Further he
has technical expertise and experience to handle information
technology requirements of the group combined with logistics operations.

Mr. S.P.Aravind, Architecture graduates from

Thiagarajar College of Engineering and an Interior Design
Post Graduate from the renowned Domus Academy in Italy.
He has an international exposure and vast work experience in
architecture as well as interior projects. He heads White Slate,
a design firm and also handles all the infrastructure
developments for the group and allied business. Further, he
takes care of the branding strategies for the Solaimalai group.
He is now heading Solamalai College Of Engineering.

Mrs Anitha J.Anand is an IT graduate from Sathyabama

Engineering College and a MBA graduate from Great Lake
Institute, Chennai .She has a vast experience in MIS, DWO,
and IT consulting. Her key area is expertise include Strategy
and Corporate Branding.

Dr.SheelaRamachandran Former Vice Chancellor,

Avinashilingam University, Coimbatore, Former Principal, PSG
College Of Arts And Science, Coimbatore
MILESTONES

Solaimalai, a popular brand in Madurai has evolved since 1962 as a single lorry
operator and now has diversified business operations throughout Tamilnadu with an annual
turnover of 600 crore rupees marking footsteps in FMCG distribution, C&F services, Goods
Truck, Passenger transportation, Cinema exhibition, Architecture and Education with an able
team of more than 1400 employees.
OBSERVATION IN TRAINING

INBOUND AND OUTBOUND LOGISTICS

Inbound Logistics

Inbound logistics refers to the internal logistics tasks and activities that businesses need
to complete in order to operate. Inbound logistics usually refers to the logistical operations of
companies that operate fairly upstream (B2B).

In terms of the supply chain, it involves the relationship with parties that operate further
upstream than the given business. Depending on the business, the parties that operate
upstream may vary dramatically in their respective operations.

For example, consider being a car manufacturer. The manufacturer’s inbound logistics
would entail the sourcing of raw material inputs (sheet metal, glass, wiring, plastics, etc.),
how to store the materials in preparation for and during the assembly process, and how to
manage the flow of manufactured automobiles that leave the factory.

From the perspective of an upstream player, say for example the metal foundry that
produces the sheet metal, the inbound logistics would vary. The inbound operations would
include sourcing raw materials such as metal ores, storing and using the materials in
production, and managing the flow of completed products.

Outbound Logistics

Outbound logistics refer to the tasks and activities involved with moving the product to
the end user. Such types of logistic duties usually apply to players that operate relatively
downstream, which are usually the last party in the supply chain. The duties include the
storage of manufactured inventory, the transportation of manufactured goods to the point of
sale, and sometimes, the shipping and handling involved to get certain products to the end
user.

Going back to the auto manufacturer example, the parties involved with the outbound
logistics of that supply chain would be the wholesalers and dealers. The factory operations
would be in charge of assuring that the right amount of ordered inventory arrived at the dealer
at a given time.

In turn, the dealer would be in charge of coordinating the storage and upkeep of the
vehicles on its lots, as well as the shipping and handling of vehicles that are ordered by
customers that live in faraway areas.

FORWARD AND REVERSE LOGISTICS

Difference between Reverse Logistics and Forward Logistics

Reverse logistics has been around for a long time but has only recently become a more
popular method of supply chain management. When compared to traditional logistics, it
provides many benefits to businesses and adds value for customers. For those seeking more
information about the benefits of a reverse logistics management program in comparison to
forward logistics, here are some valuable points to consider.
Forward Logistics

Traditional or forward logistics deals with the flow of products from the factory to the
consumer. The different types of forward supply chain management include direct order
fulfillment, hub services, pick-and-pack services, and shipping. With forward logistics
shipping, a sales forecast is used to project the requirement. When a certain amount of
product is required, that quantity will be shipped to the distribution centre and then to the
retail stores from there. At every level of this method of supply chain management, advanced
shipping notices will assist the information as the products flow.

Reverse Logistics

Reverse logistics is for all operations

related to the reuse of products and materials. It
is "the process of moving goods from their
typical final destination for the purpose of
capturing value, or proper disposal.

Remanufacturing and refurbishing activit

ies also may be included in the definition of
reverse logistics.

In order to model reverse logistics

network from an economics point of view, the
following simplified reverse logistics system
has to be set.
 In this model the products are gathered from the consumers and transferred back to the
producers, hence the direction of the flow in the distribution supply chain is reversed and the
model is expanded with the recovery center. First of all the used products are collected from
the consumers and moved to the recovery center, where the condition of the products is
examined according to their end of life cycle. If there is still recapture value, then the product
is disassembled as preparation for further reprocessing, which means physical transformation
to new customer. Otherwise the used product is disposed and transferred to the landfill
site. According to the introduced model the main differences between forward and reverse
logistics can be identified:

 Uncertainty on the quantity, quality and timing

 Complex system due to more participants and more interactions
 Mismatch between demand and supply occurs
 Unexplored market opportunities but the low value of return flow means a limit.