LOGISTICS PLANNING

What is Logistics?
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 to customer requirements.

Function Areas Of Logistic

Information
Technology
(2)
Network
Design(1)

Packaging
And
Re-packaging

Logistic
For
Customer
satisfaction

Materials
Hnadling,
Loading,
Unloading
(6)

TransPortation
(3)

Inventory
And
Storage
(4)

Warehousing
(5)

Network design

Network design is one of the prime responsibility of

logistical management.
It is required to determine the number and location of all
types of facilities required to perform the logistics task.

Information technology
Two major areas that depend on information are:

Sales Forecasting: It is done to estimate the future

requirement of logistics. It helps inventory management to
satisfy anticipated customer requirement.
Order Management: Customers order is very important
in logistics. Logistics services are required for external and
internal customers.

Transportation
Fundamental factors to transportion performance:

Cost: it is the payment for movement between two

locations and expenses related to administration
and maintaining in- transit inventory.

Speed: It is the time required to complete a

specific movement.

Continue.

Road transport

Water transport

Air transport

Inventory Management

Proper management of inventory is very important. For

example, stocks are to be kept at a low level but not too
low, bulk purchases are to be attempted to ontain better
prices but over buying is to be controlled.

Economic Order Quantity (EOQ)

EOQ is that size of the order which gives maximum
economy in purchasing material and ultimately
contributes towards maintaining the material at the
optimum level and at minimum cost.

1.
2.

With EOQ, two types of costs should be taken into

account
Ordering cost
Inventory Carrying cost

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1.

Ordering Cost: this is the cost of placing an order with

the supplier. Because of so many factors involved, it is
quite difficult to quantify this cost.

2. Inventory Carrying Cost: It includes the following:

Cost of operating the stores

The incidence of insurance costs

Interest on capital locked up in stores

Deterioration and wastage of materials

Warehousing
Warehouse provide a key link in the physical distribution
chain. The location, size and capabilities of warehouse can
profoundly affect a companys ability to satisfy its
customer and deliver products and services profitabilty
Purpose of Good Warehouse
Storage
Breaking bulk
Consolidation
Unitization

Factors Affecting Warehousing Choice

The following factors have be kept in mind when deciding
the location of a warehouse:
Product type
Transportation cost
Markets
Rent
Labour supply
Taxes
Geography
Competition

Material Handling Equipment

Material handling activities should be minimised as it

requires a very high capital investment and direct labour
cost.
Transportation is requird for materials handling- for
efficient loading and unloading,

Classification of materials Handling System

1.

Mechanised Systems: These systems utilise a

combination of labour and handling equipment to
facilitate receiving, processing,and shipping.They
employ wide range of handling equipments. These are
Forklift trucks
Walkie-Rider pallet trucks
Townlines
Tow tractors with trailers
Electric hoists or cranes
conveyors

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2. Semi-automated System: when selected handling functions
are performed using automated equipment and the
remainder of the handling is competed on a mechanised
basis.
The main equipment used in semi-automated systems are:
Automated Guided Vehicle System (AGVS)
Sortations
Robotics
3. Automated System: minimise labour as much as practically
possible by substituting capital investment by equipment.

Packaging
Handling and storage of finished goods. It also emphasises
on protection from loss and damage.
Logistic management is the framework of 7 Rs
Right quantity of the Right product or services to the
Right place in the Right condition at the Right cost and at
Right time with Right impression

Vehicle Logistics
Vehicle logistics services include:
Vehicle Transportation

Marine Transportation
Ship Loading and Unloading
Storage and Parking Lot Services
Dealer Distributions
Information Systems and Reporting

Vehicle Logistics
Special transportation
services are:
Inter-dealer transportation,
Fair exhibitions,

Sports competitions,
Collection vehicles

Vehicle Logistics
During the placement of
vehicles on to the
ship;
Minimum parking
distances,
Installation of the safety
equipment

should be realized.

Vehicle Logistics
Storage and Parking Lot
Services:
- Transfer to addressed area,
- Transfer to the dispatch area,
- Transfer of the out of order
vehicles to the service area,
- Transfer from the service
area to the addressed area