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It provides information to efficiently manage the flow of materials, effectively utilize people and equipment , coordinate internal activities and communicate with customers.
It has to do with keeping accurate records of finished goods that are ready for shipment.

Process of efficiently overseeing the constant flow of units into and out of existing inventory.

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Inventories are held in following general categories: - Raw materials and components - Work In Progress - Finished Goods - Maintenance repairs & operating supplies - Pipelines or in-transit inventory

Raw Materials

Works in Process

Finished Goods

Finished Goods in Field

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Irrespective of its location in supply chain, the product inventory essentially serve the following functions:
- Balancing supply and demand - Periodic variation - Scale economics

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Meeting production requirements

Supporting operations requirements

Customer service consideration

Hedging against future expectations

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Inventory Cost
Carrying cost

Ordering cost
Warehousing cost

Damaged, Pilferage and obsolescence cost

Exchange rate differentials
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ABC Analysis
VED Analysis

SAP Analysis

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Plays important role in SC process since products are rarely produced and consumed in same location. Main purpose of transportation is to make right quantity of right quality goods at right time and place in least cost.

Logistical costs and customer service capabilities can be reduced by: - reduction in transit time - less damages - curtailment of productive packaging cost Example: Blue Darts

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Ensures speedier and timely physical movement of goods from point of inspection to point of consumption It creates core competencies by preventing stocks out of customers annoyance It provides protective storage during transit Ensures cost efficient, better customer service Fulfills specific service requirements of the corporate enterprise for improvement of logistical capabilities and harmonious supply chain relationship

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Tariff of transportation mode

Transit time cost

Obsolescence and detoriation costs

Protective packaging costs

Transit insurance cost

Miscellaneous cost
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Airways Seaways Roadways Railways Pipelines

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Strength and weakness of the company in terms of marketing Financial and production resources Prevailing market characteristics including the competitive scenario Geographical and territorial structure Quantity to be transported each time, distance to be covered Product feature and suitability to various modes of transportation such as weight, size, shape etc

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For a comprehensive discussion on transportation decision following 4 factors needs to be highlighted

- Economic factor - Shippers factor - Carrier factors - Alternative pricing strategies

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Current transport infrastructure of India is major bottleneck in the achievement of logistical objectives, mainly due to following factors Poor Government policies Networks Road/Rail track conditions Vehicle quality Coordination between various agencies and transport organizations

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Logistics Management Vinod Sople Logistics & SCM D K Agrawal Materials Management K. Shridhara Bhat

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Thank You

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