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CONCEPTS IN INTERNATIONAL
LOGISTICS MANAGEMENT

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Well . . . . Is This Logistics ?

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Actually . . . . . This Is Logistics

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Logistics Management
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

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Contd……
“Getting the right product to the right place in the
right quantity at the right time, in the best
condition and at an acceptable cost. “
(The Chartered Institute of Logistics & Transport)

Logistics involves ‘8 Rs’- Logistics involves getting, in


the right way, the right product, in the right
quantity and right quality, in the right place at the
right time, for the right customer at the right cost.
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Global : Logistics Industry Scenario
• The logistics industry is valued at US$ 3.5 trillion.
• The U.S., which contributes to over 25% of the global industry value, spends close to 9% of its GDP
on logistic services.
• The sector currently employs over 40 million people in the world

Countries Logistics Cost /


GDP
Countries Logistics Cost/GDP

India/China 13-15%
U.S 9.90%
Europe 10%
Japan 11.40%

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India : Logistics Industry Scenario
 Total GDP US$ 3 Trillion.
 India spends 13% of its GDP on logistics compared to an average of
10% in other developing countries.
 India logistics market to double by 2012.
 The industry would need 4,20,000 skilled people in the ‘Senior
Resource Category’ in warehouse management it self, by 2015.
 Currently, India logistics industry has only 14,000 Warehouse
Managers but required are approx. 35,000 .
 Technological change in the logistics industry demands a trained
workforce in all areas of the sector.
 Indian logistics industry is at an inflection point and will reach a
market size of over $125 billion in year 2010.
 The organized logistics, which is about 6% of the total logistics
market, is growing @ 15-20% a year.
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Logistics Mix

Logistics covers the following functional areas, and


are termed as Logistics Mix by Martin Cristopher.
1.Information flow- Order registration, order checking
& editing, order processing, coordination
2.Warehousing- Material storage, material handling,
site selection & network planning, despatch
documentation
3.Packaging- Handling & damage prevention
4.Transportation- Route planning, mode selection &
vehicle scheduling prince dudhatra-9724949948
CONCEPT
According to Council of logistics management:
• “Logistics is the process of planning,
implementing and controlling the efficient,
effective flow and storage of goods, services and
related information from point of origin to point
of consumption for the purpose of conforming
the customer requirement”.

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• design and administration of systems to controls the
flow of material, work- in – process, and finished
inventory to support business unit strategy.
• designing and managing of a system in order to
control the flow of material throughout a
corporation.
• very important part of an international company
because of geographical barriers.
• Logistics of an international company includes
movement of raw materials, coordinating flows into
and out of different countries, choices of
transportation, cost of the transportation, packaging
the product for shipment, storing the product, and
managing the entire process.
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Fragmentation :
• This era was known as fragmentation because
every thing that done was disintegrated
Evolving Integration:
• At this stage of time new concepts of
Logistical management were evolving
Total integration :
• In the present scenario because of
technological advances logistics has evolved
as part of management
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CONCEPT OF LOGISTICS
• Logistics currently costs between 10 and 25 percent
of the total cost of an international purchase.
2main phases
• Materials management is the timely movement of
raw materials, parts, and supplies.
• The physical distribution is the movement of the
firm's finished products to the customers.
• The ultimate goal of logistics is:
• "To coordinate all efforts of the company to
maintain a cost effective flow of goods.“
• ’Logistics’ is derived from French word ‘loger’, which
means art of war pertaining
• to movement and supply of armies.
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Inbound logistics + Material Management
+ Physical Distribution =Logistics
• Inbound logistics covers the movement of materials
received from suppliers
• Material management describes the movements of
material & components within a firm
• Physical distribution refers to movement of goods outward
from the end of the assembly line to the costumer.
• Supply- chain management is somewhat larger than
logistics and it links
• logistics more directly within the user’s total
communication network & with the firm engineering staff.
It includes manufacturer and suppliers but also
transporters, warehouses, retailers and customers
themselves.
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Importance of logistics
• Transportation cost rose rapidly due to the rise in fuel prices
• Production efficiency was reaching a peak
• Fundamental change in inventory philosophy
• Product line proliferated
• Computer technology
• Increased use or computers
• Increased public concern of products Growth of several new, large
retail chains or mass merchandise with large demands & very
sophisticated logistics services, bypass traditional channel &
distribution.
• Reduction in economic regulation
• Growing power of retailers
• Globalization

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components of Logistics

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