LOGISTICS

Supply Chain Management

Distribution Logistics
Single Country Single Market
• Dependable Mode of Transport
• Safe Arrival of Goods
• Reasonable Time
• Reasonable Cost
Such Solution Not Viable For Global Markets
• Correct Quantity of Product in Required Time
Frame
• Physical Distribution Process as Integrated
System
 LOGISTICS
Supply Chain Management
Distribution Logistics
Global Markets
• Multi Modal Transport
• Trans-shipments
• Regulatory Authorities
• Pilferage
• Damages
• Quality Issues, Storage at Different Climatic
Conditions
• Control
 LOGISTICS
Supply Chain Management
Sea Air
Transport Costs $31,790 $127,160
Transit Time 21 Days 3 Days
In-Transit Inventory $44,289 $6,328
Finance Cost
Total Trans. Cost $76.079 $133,487
WareHsg. Inventory $126,540
WareHsg. Rent $6,500
Real Physical D.C. $209,119 $133,487
*44,000 Units, Value $7.7 m, SGP to LA, Finance Cost 10% i.e.$2,109
per day, Inventory of 30 days at SGP and LA
 LOGISTICS
Supply Chain Management
Distribution Logistics
• The management of resources to supply the
product and services needs of the end
consumer encompassing the supply chain of
any physical products and the exchange
processes involved
• RM → Mfgr. / Producer of Goods or
Services → Importer (Intermediary or
Wholesaler or Stockist) → Retailer →
Consumer
• Traditional Distribution Chain
• Linear chain, unidirectional
• Passive Customer at the other end
 LOGISTICS
Supply Chain Management
Distribution Logistics

Limited Channel
• Mfgr. / Producer of Goods or Services
→ Importer → Retailer → Consumer

Direct Channel
• Mfgr. / Producer of Goods or Services
→ Consumer
 LOGISTICS
Supply Chain Management
Distribution Logistics
Flow
• Physical Flow, Ownership Flow, Service Flow,
Information Flow, Payment Flow, Promotion Flow
• Good logistics or SCM techniques needed to
ensure smoother movement of merchandise till it
reaches the consumer
• Customer satisfaction at acceptable costs
 LOGISTICS
Logistics
Logistic is the process of strategically managing
the procurement, movement, and storage of
materials, parts, and finished inventory through
the organisation and its marketing channels in
such a way that the current and future
profitability are maximised through the cost
effective fulfillment of orders
• Procure, Store and Transport in cost effective
manner
 LOGISTICS
Logistics

Movement of Goods from Exporter to Importer and From

Importer to Exporter

FCL
LCL

Volume
Weight
 LOGISTICS
Logistics
Cost Structure
Total Distribution Cost
TDC = TC + FC + CC + IC + HC + PC + MC
• TC - Transport Cost - Substantial Fixed Cost
element.
• Capacity to match volumes
• Centralised Distribution
• Route Planning
• Optimal Schedules
• Back Haul
• Use of software
 LOGISTICS
Logistics
Cost Structure
Total Distribution Cost
TDC = TC + FC + CC + IC + HC + PC + MC
• FC – Facility Cost
• Warehousing, capital cost and running cost related
to infrastructure and internal systems to store and
pick up stocks
• RDC in low cost area
• Use of Information Systems, Electronic Data
Interchange
• Warehouse Management System like radio links.
Reduction in wage bill – Refer to HR
 LOGISTICS
Logistics
Cost Structure
Total Distribution Cost
TDC = TC + FC + CC + IC + HC + PC + MC
• CC – Communication Cost – Cost associated
with EDI and other communication through
the chain. These are administrative costs
• IC – Inventory Cost – Direct capital cost for
goods purchased and Opportunity cost for
carrying inventory. These are cost associated
with maintenance and replenishment of
inventory
 LOGISTICS
Logistics
Cost Structure
Total Distribution Cost
TDC = TC + FC + CC + IC + HC + PC + MC
• HC – Handling Cost – Cost associated with
Damage, Pilferage, Deterioration of stocks
• PC – Packaging Cost – Repacking, shrink
wrapping, pallets, boxes, containers, tapes,
labels etc
 LOGISTICS
Logistics
Cost Structure
Total Distribution Cost
TDC = TC + FC + CC + IC + HC + PC + MC
MC – Management Cost – Cost associated
Management of the chain. Ranging from security
system to storage conditions to HR, Finance and
almost everything where managerial input is
needed
 LOGISTICS
SCM
IT in SCM
Goldmine - Tanishq
• 60 Boutiques, 32 C&F, 29 Cities
Challenges
• Reduction in cycle time, increasing
efficiency, cost reduction in tracking
movement of goods and sales indenting,
order status, sales visibility,
communication (reports) and exception
reporting
 LOGISTICS
SCM
IT in SCM
Goods in Transit
• Details of dispatches to C&F and
Boutiques, Tracking stock returns, Monitor
loss of goods and stocks in transit
Indenting
• Automate ordering by boutiques, Online
product catalogues and price lists, Stock
replenshments, shop specific customer
specific indents, POS indenting for each
variant as per track record
 LOGISTICS
SCM
IT in SCM
Order Status
• Visibility of status of orders placed by
boutiques, daily synchronization with
factory and web-based solution, No emails
Sales Visibility
• Sales visibility has improved, helps
management in evaluating marketing
programmes and promotions at boutique
level by category and price band. Best
sellers are also available on line
 LOGISTICS
SCM
IT in SCM
Communication and Exception Reporting
• Platform for dissemination of information
through uploads, bulletin boards, Market
information. 40,000 variants interaction is
vital
Future Plans
• To set up bench mark for the industry. Use
of relevant business information in real
time in the boutiques during a customer
touch
 LOGISTICS
SCM
IT in SCM
UPS
FEDEX
DHL
Complete Logistic Management
Door to Door Delivery Around The World
WareHousing, Inventory, Labour & Technology
Integrate Supplies from Various Countries and
Despatch, Reduces Time, Inventory, Tracking
And Much More………