Levels of customer service in Logistics

Improving service level usually means an increase of costs. The service costs are caused e.g. complaints and correction of mistakes and work phase be done twice. Quality assurance contribute to reducing bad quality and mistakes, but in this case, service level production costs may increase considerably high.

Increasing the number of products stored in warehouse adds more rapid product availability to customer, but increases storage costs and the cost of tied up capital.

Therefore, it is important to find an optimum level, where service is good enough, but at the same time costs as low as possible.
Collection of customer feedback and its processing is necessary in order to identify satisfactory service level for customers.

Customer needs can be met, for example, by packing products for store handling and ensuring their handleability. Customer needs are often associated with delivery time or reliability of delivery and companies give related to them service promises. Well-managed complaint may increase company’s image and ultimately, turn to a clear competitive advantage.

Three principals of service

Service can be planned by three different principals or by a combination of them, depending on customer and product:

  • Self-service principal: Customer orientation can be based on self-service principal, if customer doesn’t see service to create delivery process value. Typical to this service is customer’s own participation, use of up to date information networks, low unit cost of the process and ease of service
  • Normal service: when share of service increases it is so called normal service, which means traditional customer service and requires service personnel presence. For example, visiting store’s fish desk or pharmacy.
  • Tailor-made service: tailored services are characterized by customer fitting room, appointment and expensive process cost. As examples, investment advisory, legal clearance or negotiating mortgage.

The danger of part optimization

In logistics, there is a risk of part optimization. In this case, in one function service level is high, but measures implemented in other functions of the company tears it up. Such situations may arise e.g. between storage and transportation and buying and selling, for example, so that customer’s urgently needed spare parts kept in the stock, but they are transported to customer very rarely then the warehouse operates in vain or sales promises quick delivery but purchase keep deliveries from sub-suppliers with long delivery periods so that the product can not be delivered quickly.

Service may suffer too in connection with, for example, packing or delivery, and it is particularly harmful if carefully planned and implemented supply chain management fails in the final stage of logistics chain, for example, product is damaged during assembly in customer’s premises. In this case, resources being wasted and it will lead to financial losses and failure of customer promises.

Customer Satisfaction

Having good customer service in the transportation industry will ultimately improve your customer satisfaction levels. Customer satisfaction is important, even in the logistics industry in fact, especially in the logistics industry. Why the whole process might seem as simple as picking up a customer’s delivery and delivering it to its destination, customer satisfaction ultimately comes down to what your business can offer them outside of that simple process. Online services to track their shipments can work wonders, but human interaction is just as effective. Keep your customers up to date on their shipments if you can, or explain to them from the outset what will happen with their deliveries. Keeping a customer satisfied will keep them a customer.

Customer Relationships

Customer relationships play a part in customer satisfaction, but will also play a part in the success of your business. A good customer relationship will not only keep them coming back as ‘repeat customers’, but they are also more likely to suggest your business to other people and bring you in more clients over time. They chose your business initially, so make sure you give them enough reasons to come back and not look elsewhere to your competitors. Customer relationships can be a simple way of doing this with minimal, if any, costs so it’s well worth the bit of extra effort.

Brand Image

Good customer service in the transportation industry is going to make your brand look good. Poor customer service is what drives people to leave bad reviews. When someone complains about a company, it’s usually about the customer service they received as opposed to the product. If a product is faulty, customers can be appeased by good customer service whether that’s an apology or a replacement and this works in Logistics too. If your company is apologetic if something goes wrong, bad reviews and complaints are less likely. Showing you care through good customer service will do your business and your brand image a world of good.

Logistical Competency

Logistics is not just concerned with material or information transitions but it support marketing function, product development, price promotion and helps in bringing new ideas to provide customer service. It ensure that firm should provide fast, accurate and quality service.

Logistical competency leads to increased revenue, create opportunity for major cost savings in operations and simplify complexity of distribution network. Logistics competency includes the ability to analyze and design new distribution networks and optimize existing networks.

It also include management of information required of order processing and demand forecasting. It encompasses managing of all logistical performances in such a manner that it results into optimization.

Thus, summing up, it could be said that Logistical competency is the assessment of a firm’s capability to provide competitive services to the customers at the lowest possible cost.

3 Cs Model of Logistical Competency:

3 Cs model of Logistical competency suggests that the three Cs in Logistics i.e.  Company, Customer and Competitor, all are quite important for the growth and survival of business and economy at large. The 3 Cs model of Logistical competency generates competitive advantage for the firm. The 3 Cs are discussed herewith:

There exists a 3 way relationship between three parties as represented in the above diagram. Customer is one who shows the desire to buy the products. He always search for products with best quality and low price. Company works hard for selling their products so as to satisfy these desires of customers. It utilizes all its assets in the optimum way and always see to it that customers are influenced to buy their products only. Competitor is one that tries to fascinate an magnetize the customer. He also utilizes all his assets in the best possible way and tries to influence the customer.

There exists a 3 way relationship between three parties as represented in the above diagram.

  • Customer is one who shows the desire to buy the products. He always search for products with best quality and low price.
  • Company works hard for selling their products so as to satisfy these desires of customers. It utilizes all its assets in the optimum way and always see to it that customers are influenced to buy their products only.
  • Competitor is one that tries to fascinate an magnetize the customer. He also utilizes all his assets in the best possible way and tries to influence the customer.

Thus Company has to strive very hard in order to retain the customers. They do so by providing cost advantage to the customers and value advantage to the customer. Competitors also tries to bring down their cost and provide value advantage to the customers. Company and competitors strive for cost differentials.

And that’s how in the whole process, wherein company and competitors, both are trying to provide value advantage to the customers by becoming efficient, the logistical competency is achieved.

Parameters to achieve Logistical Competency:

Logistical Competency can be achieved with the help of certain parameters. These parameters stand like five pillars in completing the logistics mission of the company. These parameters are as described as follows:

(a) 1st- Network Design: A manufacturer may have multiple facilities of plant, warehouses and distribution centres. Network design aims at forming a structure so as to perform logistical activities efficiently and effectively. The manufacturing units and warehouses may be located in various geographical areas, far from each other. In the same way distribution centres will be disperse across different areas. Network design tries to establish connectivity among all these facilities for better performance of logistics operations and more importantly to provide better customer services resulting in customer satisfaction.

(b) 2nd– Information Management: Information Management is essential component here. It is required for demand forecasting and order processing. Logistical performance depends a lot upon how the information is received, shared among the different facilities in the network and ultimately used to make the customer delivery according to the order placed by him. Contemporary technology is used in logistics for the same. Softwares like ERP, CRM, and technologies like EDI, ePOS, etc. are widely used for information management.

(c) 3rd- Transportation: Transportation is required for the movement of goods from one party to another. Transportation accounts for 60 to 70% of the logistics costs. Logistical function of transportation deals with decision like choosing right mode of transport, deciding to have one’s own feet or to outsource, deciding on the total cost, transportation infrastructure, reliability of mode and so on.

(d) 4th Inventory Management: In order to control total cost it is quiet significant to control and manage the inventory. Inventory management is concerned with maintaining the requisite levels of inventory in such a way that there is neither understocking nor overstocking. Sufficient levels of stock are to be maintained to satisfy the customers’ requirements.

(e) 5th- Warehousing, Material Handling and Packaging: Logistics is also concerned with maintaining the storage area wherein heaps of goods are stored till they are demanded by customers. Such logistical function is called as warehousing. Logistical function of warehousing deals with the decision size, number, layout, location and nature of warehousing.

Material handling is an art and science of moving, packaging and storing of substances in a form. It includes lifting and shifting of materials in order to save space, cost and time. The overall productivity of logistics is improved with automation and mechanisation of material handling system.

On other hand, incorrect methods and system of material handling results in high costs. Packaging is required for efficient handling and storage of goods. It is also essential for protection of goods from any loss or damage, specially during transit. Packaging adds to the shelf life of any product and makes it durable for longer time. Packaging, which is quiet attractive, make the goods easily saleable in the market. Packaging is also very much necessary for providing convenience and ease of handling to the end users.

Thus Logistical competency can be enhanced by right logistics mix and proper network design.

Logistical performance cycle

When a firm receives an order, it carries out certain activities to complete that order. These activities take a recurring form as they need to be carried out with every order. Thus, a cycle is formed of these activities, which is called Performance Cycle. To sum up, in simple terms, Logistical Performance Cycle comprise of series of activities that are required to receive the orders from the customer, process this order and make the final delivery to him.

Based on the timings of these activities to be carried out, there exist three logistical performance cycles.

  1. Procurement Performance Cycle
  2. Manufacturing Support Performance Cycle
  3. Physical Distribution Performance Cycle

  1. Procurement Performance Cycle: (Inbound Logistics/Upstream Logistics)

As the name suggest, this cycle is concerned with procuring raw materials

from the vendor and make available for further processing as and when required. It is also called as Inbound Logistics or Upstream Logistics. Procurement performance cycle aims at carrying out logistics elements related to procurement of materials at lower price.

Thus, this cycle involves all preproduction logistical activities. Procurement Performance cycle ensures that firm has sufficient materials to carry out the production activities and deliver to the customer. It is a base of logistical performance cycle. Various activities that are part of Procurement Performance cycle or Inbound Logistics are:

(a) Resource Planning: It aims at planning for the physical and financial resources that are required to be with the firm so as to procure the materials aptly on time.

(b) Supply Sourcing: Supply sourcing means making an effort to find out the right vendor from whom materials can be purchased.

(c) Order Placement: Once the list of vendors is finalized from whom firm is going to buy the materials, a confirmed order is placed to them.

(d) Inbound Transportation: Inbound transportation means transportation of materials from place of supplier to the place of manufacturer. It is also called as carriage inward.

(e) Receiving and Inspection: Once the consignment of materials reaches to the manufacturer, he receives the consignment and transfer these materials in the storage area. As he receives the materials, he also inspects the same and assure that material is received according to the order placed.

(f) Storage and Handling: Till the materials are processes, they require proper storing facility. Also, material handling techniques are used so as to manage the same.

  1. Manufacturing Support Performance Cycle: (In process Logistics/Production Logistics)

Manufacturing performance cycle is an interface between the procurement performance cycle and physical distribution performance cycle. To meet the production schedule, this cycle plays a significant role. The activities under this cycle, aims at providing basic support in manufacturing. It is not directly concerned with how manufacturing is done but certainly it is associated with how well the support activities are carried out in order to complete the manufacturing. This cycle includes various activities:

(a) Receiving Materials from Stores: Before the actual production take place, materials are stocked in the stores area. To begin with the production, materials are received from stores to shop floor for processing.

(b) Receiving Components: For the production to begin, certain components, loose tools, small equipment’s may be received for operating on machines.

(c) Managing Inventories of WIP: Once the production process has started, materials are converted to WIP or semi-finished goods. Many a times, it becomes essential to manage and store properly this WIP inventory till further processing takes place.

(d) Transfer of Finished Goods: As the production process is over, materials get

converted into final saleable product. This batch of finished goods is then sent to warehouse for packaging and distribution.

  1. Physical Distribution Performance Cycle:

(Outbound Logistics/Downstream Logistics) This is the 3rd and also the most important cycle under logistical performance cycle. It covers all major activities of logistics and thus it contributes the major cost of logistics. As the goods are transferred from factory to warehouse, it marks the end of Manufacturing support cycle and beginning of Physical Distribution cycle. It includes all those elements of logistics which are necessary to distribute the goods from the manufacturer’s warehouse to the customer’s warehouse. It ensures that goods are delivered to the customer according to his order following 7Rs principle of Customer Service. This cycle provides a support framework for the sales and marketing activities of business. It is also called as Outbound logistics as it includes all post production activities. It includes following set of activities:

(a) Placing of order by Customer: This cycle begins with placing of order by the customer at a selected retail outlet.

(b) Order Transmission to Distribution Centre: Once the customer order is received at the retail outlet, it is further transmitted to the distribution centre without wasting time so that timely delivery can be made.

(c) Order Processing: As soon as the distribution centre receives the order, it is further processed which means an attempt is made to know what kind of goods customer want, in what quantities, how they shall be packaged, how they shall be transported.

(d) Order Selection: Distribution centre checks the availability of goods ordered and based on it select the goods from the warehouse, package the goods according to the customer’s requirement and load the goods in a transportation vehicle.

(e) Transportation: Using the right vehicle and the principles of transportation, goods are finally transported from warehouse to the customer. Right mode of transportation is selecting looking on to the nature of goods and other factors.

(f) Customer Delivery: Once the goods are reached at the customer’s warehouse, goods are unloaded from the transportation vehicles and handed over to the customer which completes the delivery cycle.

Meaning of Customer Service, Objectives

Customer service in logistics is the activities, service actions are provided, acting as added value. The aim is to bring more value than the core service that customers need and bring the most satisfaction to customers. For businesses or business organizations today offer more services to customers besides their main products.

The bigger your business is, the more complex your supply chain gets. It can be hard to maintain perfect customer service because everyone involved in the shipping process is constantly affecting a company’s reputation through customer experience. In client service, it’s impossible to be perfect, but it is possible to be better and provide your customers with the best service possible. Customers want to have a smooth, easy experience when working with a company. It is up to the company on how good that service can be delivered.

If you are striving to build long-term relationships with your customers and gain their loyalty, you should consider shifting from product-oriented strategy to customer-focused one. Here are some useful tips on how to take customer service to the next level:

  1. Choose the tools and partners accurately. No matter what strategies and technologies you use, there is always a human factor present. That’s the reason why choosing partners properly will enhance your customers’ experience. If you are outsourcing your logistics to a 3PL provider, make sure they have skilled and professional brokers and a network of experienced and reviewed carriers. Such services offer logistics management from A to Z and will take most of the hassle away. But as you select a key link in your logistics, you should invest time researching how to pick the best third-party logistics provider.
  2. Transparency and personal approach. Try to make the process as easy as possible for the customer. Supply chain visibility will reduce the time your client’s spending on shipping, therefore improving the overall experience they get from working with you. Transparency involves not only shipment tracking but also the option to compare available prices, services and understand how they work without any trouble. The more personalized approach you provide, the higher your chances are to retain customers. Send tracking updates and reports to customer to keep them in the loop, ranging from shipment transits to weather reminders. This strengthens your company’s credibility and simplifies the process for your customers.
  3. Establish the last mile delivery. This is a final and crucial element in the transportation process and obviously demands more concentration. The last stage of delivery is the most vulnerable to mistakes or damages that may occur due to different reasons. To reduce the likelihood of such circumstances, assure that everything goes the way it should.
  4. Provide feedback. No matter what issue took place, the response should be swift and intended to solve the customer’s problem, or at least to figure out what is the issue. Businesses should invest more in their staff training to reduce the chance of errors while interacting with customers. Solving problems that occurred on behalf of your company can make a big difference in a customer’s experience with your company. Many 3PL companies provide customer service and can help their customers simplify this complicated process.
  5. Technology & analysis. Don’t underestimate the power of data: new technologies let businesses track every step of the customer, existing or potential. Knowing the deep insights of your audience leads to better performance, updated strategies, and better service. Such innovations like transportation management systems, tracking devices and CRM systems let businesses study customer’s behavior and improve marketing strategies. So, researching and analyzing big data is the best way to achieve a better understanding of customers’ demands.

Important factors for customer service in logistics

1. Time

For today’s life, time is always the most important factor. Therefore, in customer service of logistics, time is an extremely important factor to create customer satisfaction.

Not only for the logistics industry but for any industry, the shorter the time the customer receives the product, the more satisfied the customer will be.

2. Reliability

This is an indispensable factor for customer service in logistics. For reliability, the brand will always be the most important factor for customers. If the brand of service that your company provides is more reliable. Then customer service has the opportunity to satisfy larger customers.

Typically, when we buy products, if we buy in reputable brands, we will always feel safer. We will not need to worry or pressure on fraud or anything like that when using that product.

3. Price

The price competition has never cooled down in the market today. Especially when customers always like cheaper products. Or rather, there is a price that suits their needs.

If your logistics service can provide the same items, same quality (or higher quality). But with cheaper prices, obviously, you will have a huge advantage.

4. Flexibility

Flexibility is the ability to flexibly deliver products according to customers’ needs. Currently, customers always want to use products that can solve their problems. Therefore, if possible, always customize the product so that it can best suit customer needs.

Elements

1. Supply chain management:

For supply chain management in logistics services, customers only need to deliver goods, the rest of your company will help them design a reasonable supply chain. In addition, you will also receive orders, plan to ship and collect invoices. In order to create a trust for your customers, do these tasks quickly and responsibly.

2. Shipping service

3. Warehousing service

To create a customer service in professional and methodical logistics. You create a storage service with the cross-docking system. This will significantly reduce the storage costs of goods and increase business efficiency.

4. Other services

Other services in logistics include:

  • Customs procedures.
  • Additional insurance procedures for goods.
  • Advising and guiding customers on the shipping process.

Meaning, Basic Concepts of logistics Management

Logistics is derived from a Greek word “logistike” which means the “science of computing and calculating.”

Logistics is one of the important activities of business today. Logistics is basically concerned with making the products and services available to the users rightly. In past, ‘logistics’ concept was used by military organisations. It implied the movement of men and other physical resources required during war by military troops to achieve them. However after world war-II concept of logistics was associated with industries and that paved the way for business logistics.

Logistics management is a business function that generates heaps of benefits for the firms through proper management of logistical activities. It is concerned with effective flow of materials, with all aspects i.e. inflow of material purchased, flow of materials through manufacturing process and outflow i.e. flow of materials to customers. The aim is to satisfy customer’s requirements.

According to Phillip Kotler, “Market logistics involve planning, implementing and controlling physical flow of material and final (finished) goods from the point of origin to the point of use to meet customer requirements, at a profit.”

Logistics management consists of the process of planning, implementing and controlling the efficient flow of raw-materials, work-in-progress and finished goods and related information-from point of origin to point of consumption; with a view to providing satisfaction to the customer.

Components of Logistics Management

Logistics management consists of three major components:

  1. Order processing or Input

This component is the first process of logistics where information about the resources and production is gathered based on which the products are manufactured. In the case of freight forwarding, order processing refers to the step where the various source of vendors and transportation are gathered for the importing or exporting of goods.

  1. Inventory Management

Inventory management plays an important role in the supply chain management system. As the name suggests, inventory management helps the logistics company in allocating the resources like transport vehicles, labour and other resources according to the order received by the client. This helps in making sure that no orders or freights are being left out or are being delayed for delivery.

  1. Freight transportation

This is the last and the major component of logistics management. After the order is processed and the resources are allocated in order to transport the freight to the destination. Various routes and types of transportation are analysed to check which transportation and the routes will deliver the product on or before the delivery time. There are tools and software which analyse these factors with the help of artificial intelligence and machine learning tools and provide the best plans to the logistics company.

These components together help in delivering the best quality goods to the consumers and is delivered on time. These components help in reducing the additional costs and increasing the productivity of the work, therefore the logistics company will be able to provide the best services with great quality to their clients and consumers.

Functions of Logistics Management

(i) Network Design

Network design is one of the prime responsibilities of logistics management. This network is required to determine the number and location of manufacturing plants, warehouses, material handling equipment’s etc. on which logistical efficiency depends.

(ii) Order Processing

Customers’ orders are very important in logistics management. Order processing includes activities for receiving, handling, filing, recording of orders. Herein, management has to ensure that order processing is accurate, reliable and fast.

Further, management has to minimize the time between receipt of orders and date of dispatch of the consignment to ensure speedy processing of the order. Delays in execution of orders can become serious grounds for customer dissatisfaction; which must be avoided at all costs.

(iii) Procurement

It is related to obtaining materials from outside suppliers. It includes supply sourcing, negotiation, order placement, inbound transportation, receiving and inspection, storage and handling etc. Its main objective is to support manufacturing, by providing timely supplies of qualitative materials, at the lowest possible cost.

(iv) Material Handling

It involves the activities of handling raw-materials, parts, semi-finished and finished goods into and out of plant, warehouses and transportation terminals. Management has to ensure that the raw-materials, parts, semi-finished and finished goods are handled properly to minimize losses due to breakage, spoilage etc. Further, the management has to minimize the handling costs and the time involved in material handling.

(v) Inventory Management

The basic objective of inventory management is to minimize the amount of working capital blocked in inventories; and at the same time to provide a continuous flow of materials to match production requirements; and to provide timely supplies of goods to meet customers’ demands.

Management has to maintain inventories of:

  • Raw-materials and parts
  • Semi-finished goods
  • Finished goods

(vi) Packaging and Labeling

Packaging and labeling are an important aspect of logistics management. Packaging implies enclosing or encasing a product into suitable packets or containers, for easy and convenient handling of the product by both, the seller and specially the buyer.

Packaging facilities the sale of a product. It acts as a silent salesman. For example, a fancy and decorative packaging of sweets, biscuits etc. on the eve of Diwali, makes for a good sale of such items.

Labeling means putting identification marks on the package of the product. A label provides information about – date of packing and expiry, weight or size of product, ingredients used in the manufacture of the product, instructions for sale handling of the product, price payable by the buyer etc.

(vii) Warehousing

Storage or warehousing is that logistical activity which creates time utility by storing goods from the time of production till the time these are needed by ultimate consumers.

Here, the management has to decide about:

  • The number and type of warehouses needed and
  • The location of warehouses.

(viii) Transportation

Transportation is that logistical activity which creates place utility.

Transportation is needed for:

  • Movement of raw-materials from suppliers to the manufacturing unit.
  • Movement of work-in-progress within the plant.
  • Movement of finished goods from plant to the final consumers.

Operational Objectives of Logistics

Logistics aims at providing the goods to the customers at the right time and at right price.

Considering the same, operational objectives of logistics can be listed and explained as follows:

  • Quick response:

(a) One of the important objectives of the logistics is to quickly response to the customer requirements.

(b) Logistics ensures the customers’ demands are met as and when they arise; in order to keep them satisfied.

(c) Quickly responding to the customers’ requirements through right logistics mix is essential in order to make them goods available rightly.

(d) It increases the customer loyalty and enhances the business values.

  • Managing and improvement quality:

(a) Customer satisfaction is associated with getting the right delivery with apt quality.

(b) Right logistics mix ensures enhanced quality and thereby leads to customer satisfaction.

(c) Failure to meet customers’ expectations in terms of quality results in increased cost.

(d) Thus, the objective is to achieve zero defect logistics performance in order to augment business profits.

  • Minimum inventory:

(a) As stated earlier, in order to control the total cost, it is quiet significant to control and manage the inventory.

(b) High inventory leads to high inventory carrying costs

(c) Logistics management aims at maintaining reasonable levels of inventory that shall not increase the cost.

(d) Using modern techniques in logistics like JIT, Kanban, etc. is solution for the same.

  • Minimum variance:

(a) Variance in logistics refers to the difference between the expected and the actual logistical performance.

(b) This difference between the expected and actual logistical performance may arise on account of inefficient logistics mix.

(c) Variance may lead to the inefficiencies leading to increase in cost.

(d) However, minimum the variance, maximum the logistical improvement.

  1. Movement consolidation:

(a) Movement consolidation is associated with logistical function: transportation.

(b) Movement consolidation refers to grouping smaller shipments into larger one.

(c) This helps in reducing the overall transportation costs.

(d) Logistics thus aims at movement consolidation and thereby enhances logistical performances and reduces logistics costs.

  1. Logistical lifecycle support:

(a) Logistics function does not end with delivery of goods to customers. It also includes support mechanisms that form the lifecycle.

(b) Lifecycle support mainly includes after sale service and reverse logistics.

(c) After sales can include all such activities like guarantees, warranties, maintenances, repairs, etc. that enables providing support to customers, after goods are sold and subsequently used by consumer.

(d) Reverse logistics may include all activities which involve flow of goods from customer to the manufacturer. It may arise on account of quality issues, defects, and damage in transit, product expiry, incorrect order, reusability, recycle. etc.

  1. Other miscellaneous objectives:

(a) Minimum damage to products

(b) Efficiency in order processing

(c) Making right delivery

(d) Enhancing Customer satisfaction.

Meaning, Objectives, Functions, Participants of Supply Chain

In commerce, supply chain management (SCM), the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods as well as end to end order fulfillment from point of origin to point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.

Supply-chain management has been defined as the “design, planning, execution, control, and monitoring of supply-chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.”

SCM practice draws heavily from the areas of industrial engineering, systems engineering, operations management, logistics, procurement, information technology, and marketing and strives for an integrated approach. Marketing channels play an important role in supply-chain management.

Current research in supply-chain management is concerned with topics related to sustainability and risk management, among others. Some suggest that the “people dimension” of SCM, ethical issues, internal integration, transparency/visibility, and human capital/talent management are topics that have, so far, been underrepresented on the research agenda.

Although it has the same goals as supply chain engineering, supply chain management is focused on a more traditional management and business based approach, whereas supply chain engineering is focused on a mathematical model based one.

The various objectives of Supply Chain Management which are also applicable for International Logistics and Supply Chain management.

  1. To maximize overall value generated

The higher the supply chain profitability or surplus, the more successful is the supply chain.

The supply chain profitability is the difference between the amount paid by consumer to purchase the product and the cost incurred by organization to produce and supply the product to the customer at right time.

  1. To look for Sources of Revenue and Cost

There is only one source of Revenue i.e. customer.

Appropriate management of the flow of information, product or funds is a key to supply chain success.

  1. Replenishment of the Material or Product whenever required
  2. Cost Quality Improvement
  3. Shortening time to Order
  4. Faster Speed to Market
  5. To meet consumer demand for guaranteed delivery of high quality and low cost with minimal lead time.
  6. Efficient supply chain
  7. To achieve world class performance
  8. More awareness of supply chain dynamics and efficiency
  9. To fulfill customer demand through efficient resources
  10. To optimise pre and post production inventory levels
  11. Good understanding of business characteristics
  12. Provide flexible planning and control mechanism
  13. Reduce transportation cost
  14. Greater labour efficiency, equipment and space efficiency
  15. To maximize efficiency of distribution side
  16. To reduce system wide cost of company to satisfy service level requirement

(Company costs: Manufacturing, Fixed assets, inventories, transportation)

(Service levels: Response time Hrs/day/week/month)

  1. Helps in better decision

Functions

A supply chain includes all efforts pertaining to the production and delivery of a product/service from suppliers to customers. SCM includes:

  • The management of demand and supply
  • Raw materials and parts sourcing
  • Manufacturing and/or assembly
  • Warehousing
  • Tracking inventory
  • Order Management
  • Distribution across multiple channels
  • Delivery to the customer

Supply Chain Management plays a crucial role in the success of the enterprise and customer satisfaction. The knowledge of SCM can also be leveraged to support disaster relief operations, medical missions, and handle similar emergencies.

Any business needs resources to trade. Further, it uses these resources to create products/services which the consumers are willing to pay for. This is known as the ‘transformation process’.

Participants

Producers

Producers or manufacturers are organizations that make a product. This includes companies that are producers of raw materials and companies that are producers of finished goods. Producers of raw materials are organizations that mine for minerals, drill for oil and gas, and cut timber. It also includes organizations that farm the land, raise animals, or catch seafood. Producers of finished goods use the raw materials and sub-assemblies made by other producers to create their products.

Distributors

Distributors are companies that take inventory in bulk from producers and deliver a bundle of related product lines to customers. Distributors are also known as wholesalers. They typically sell to other businesses and they sell products in larger quantities that an individual consumer would usually buy. Distributors buffer the producers from fluctuations in product demand by stocking inventory and doing much of the sales work to find and service customers. For the customer, distributors fulfill the “Time and Place” function – they deliver products when and where the customer wants them.

Retailers

Retailers stock inventory and sell in smaller quantities to the general public. This organization also closely tracks the preferences and demands of the customers that it sells to. It advertises to its customers and often uses some combination of price, product selection, service, and convenience as the primary draw to attract customers for the products it sells. Discount department stores attract customers using price and wide product selection. Upscale specialty stores offer a unique line of products and high levels of service. Fast food restaurants use convenience and low prices as their draw.

Customers

Customers or consumers are any organization that purchase and use a product. A customer organization may be an organization that purchases a product in order to incorporate it into another product that they in turn sell to other customers. Or a customer may be the final end user of a product who buys the product in order to consume it.

Rights of Customers in Supply Chain

  1. Right Product

A company who offers this kind of service must first know the kind of products that they are going to handle and transport. Having the right knowledge will give you an advantage to properly and efficiently manage both your time and resources.

  1. Right Place

The right product must be delivered to the right place. Courier services provided by an LMS company must have knowledgeable drivers as well as a systematic delivery system and tracking. Both customer and the provider must have a synchronized location tracking to ensure that the products are delivered to the right place.

  1. Right Price

Pricing is very essential and all products and services. They must have an appropriate price value in order to track the company income and expenses. A good system for storing and updating the right prices ensures success in  LMS.

  1. Right Customer

Every LMS Provider must know their target market to identify the right customers. If they will offer their services to the right market, they have more chances of gaining leads and customers that will most likely to avail them. Some uses the traditional marketing while others use digital marketing to reach more customers around the globe.

  1. Right Condition

Every product or goods that are to be entrusted by the customers to LMS providers must be stored and delivered with the right condition. This is where the specifications must be referred to in order to place it on required facilities to maintain its quality.

  1. Right Time

Time is very important when it comes to logistics, clients are more concern on the time of delivery. That is why every service provider must know the right time to deliver the products and in a very efficient way. Every system has a tracking functionality to monitor all deliveries and making sure that they arrive on time.

  1. Right Quantity

Knowing and specifying the right quantity is also one of the key in a successful LMS. Since most of the providers are third party, companies that relies on their service must be careful in sending the right amount or quantity of goods to be delivered. Thanks to our modern technological developments that 3PLs can now manage all quantities of goods to ship/deliver.

Role of Logistics in Supply Chain

Logistics is a critical concept in supply chain management as it ensures the efficient movement and storage of goods from suppliers to customers. One key concept is smooth flow of materials, which connects procurement, production, and distribution to prevent delays and production stoppages. Another important concept is inventory optimization, where logistics maintains the right stock levels to avoid overstocking or shortages, improving cash flow and operational efficiency.

Cost efficiency is also central, as logistics reduces transportation, warehousing, and handling costs through route planning, mode selection, and effective warehouse management. Logistics enhances customer service by ensuring timely delivery, accurate orders, and product availability, directly impacting customer satisfaction and loyalty.

Role of Logistics in Supply Chain

  • Ensuring Smooth Flow of Goods

Logistics ensures the continuous movement of raw materials, components, and finished goods across the supply chain. It coordinates inbound and outbound transportation, warehousing, and material handling to prevent delays. Efficient logistics guarantees that production inputs reach the manufacturer on time and finished products reach distributors and customers promptly. By managing the flow of goods effectively, logistics reduces bottlenecks, minimizes idle time, and ensures operational continuity. Smooth goods flow supports production schedules, enhances responsiveness to market demand, and strengthens overall supply chain reliability, forming the backbone of supply chain performance.

  • Inventory Management and Control

Logistics plays a key role in managing inventory throughout the supply chain. By maintaining optimal stock levels, logistics prevents overstocking and stockouts, which can disrupt operations. Tools like demand forecasting, just-in-time (JIT) inventory, and safety stock calculation help maintain balance. Efficient inventory control reduces carrying costs, avoids wastage, and improves cash flow. Logistics ensures that the right quantity of goods is available at the right time, supporting smooth production, timely order fulfillment, and better customer service. Effective inventory management increases supply chain efficiency and reduces unnecessary expenditure.

  • Cost Optimization

A major role of logistics in supply chain management is controlling costs. By optimizing transportation routes, selecting cost-effective modes, and consolidating shipments, logistics reduces fuel and freight expenses. Efficient warehouse management and material handling also lower storage and operational costs. Proper planning minimizes delays, errors, and redundant activities, leading to better resource utilization. Cost-optimized logistics enables companies to reduce overall supply chain expenses while maintaining service quality. Lower costs improve profitability, allow competitive pricing, and provide flexibility to invest in growth initiatives, making logistics a strategic tool for financial efficiency.

  • Customer Service and Satisfaction

Logistics is directly linked to customer satisfaction. Timely delivery, accurate order fulfillment, and product availability ensure a positive customer experience. Efficient logistics tracks orders, manages last-mile delivery, and handles returns or reverse logistics, addressing customer concerns promptly. High service levels strengthen customer loyalty, encourage repeat purchases, and enhance brand reputation. Supply chains that integrate logistics effectively can respond faster to market demand and emergencies, providing a competitive advantage. Logistics ensures that customers receive the right products, in the right condition, at the right time, building long-term trust and sustaining business growth.

  • Integration and Coordination

Logistics integrates various supply chain functions, linking procurement, production, distribution, and sales. It ensures seamless communication and coordination among suppliers, manufacturers, distributors, and customers. By connecting different nodes, logistics enables information flow, efficient planning, and resource allocation. Proper integration reduces delays, prevents duplication of efforts, and improves responsiveness. Logistics supports collaborative relationships with partners through real-time data sharing and tracking systems. Coordinated logistics enhances supply chain visibility, operational efficiency, and decision-making. It allows firms to synchronize activities across the network, respond to market changes, and maintain consistency in service quality.

  • Risk Management and Reliability

Logistics plays a crucial role in identifying and mitigating risks within the supply chain. It ensures safe handling of materials, reduces damage, prevents loss, and maintains compliance with regulations. Contingency planning, backup routes, and alternative suppliers improve supply chain resilience. Effective logistics also provides tracking and monitoring systems that allow early detection of potential disruptions. By reducing uncertainties and enhancing reliability, logistics ensures that supply chain operations remain uninterrupted even during unforeseen events. Reliable logistics strengthens business continuity, protects investments, and maintains customer confidence.

  • Support for Global Supply Chains

In global supply chains, logistics is essential for managing international transportation, customs clearance, and compliance with trade regulations. It coordinates with freight forwarders, customs agents, and international carriers to ensure timely delivery across borders. Efficient global logistics reduces lead times, minimizes delays, and manages currency, taxation, and documentation challenges. It enables companies to source raw materials worldwide and deliver products to international markets efficiently. By facilitating cross-border trade, logistics supports business expansion, global competitiveness, and integration into international supply chain networks.

  • Technology Integration

Modern logistics leverages technology to enhance supply chain performance. Tools such as ERP systems, warehouse management systems, GPS tracking, and data analytics improve visibility, accuracy, and efficiency. Technology enables real-time monitoring of shipments, predictive maintenance of transport, and optimized warehouse operations. It also supports automated order processing, demand forecasting, and inventory control. Technology-driven logistics improves decision-making, reduces errors, and allows supply chains to respond dynamically to changes in demand or disruptions. Effective integration of logistics technology strengthens overall supply chain agility and competitiveness.

  • Sustainability and Environmental Efficiency

Logistics contributes to sustainable supply chain practices by optimizing transportation, reducing energy consumption, and minimizing waste. Efficient route planning, load consolidation, and use of eco-friendly packaging reduce carbon footprint. Sustainable logistics practices support corporate social responsibility initiatives, regulatory compliance, and environmental stewardship. By adopting green logistics, companies enhance their brand reputation and appeal to environmentally conscious consumers. Sustainable logistics not only reduces environmental impact but also improves operational efficiency and cost-effectiveness, aligning profitability with social responsibility.

  • Strategic Support

Beyond operational functions, logistics provides strategic support to supply chain management. Decisions about warehouse locations, distribution networks, transportation modes, and inventory policies influence overall supply chain design. Logistics data and insights assist in strategic planning, supplier selection, and customer service improvement. By aligning logistics with business goals, organizations can enhance competitiveness, responsiveness, and value creation. Strategic logistics ensures that supply chain activities contribute to long-term objectives, including market expansion, profitability, and customer satisfaction, making it an indispensable component of modern supply chain management.

Introduction to Financial Accounts University of Mumbai BMS 1st Sem Notes

Unit 1 {Book}

Meaning and Scope of Accounting

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Need and Development of Accounting

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Book-Keeping and Accounting

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Persons interested in Accounting

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Branches of accounting

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Objectives of accounting

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Accounting Standards: Meaning and Scope

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AS1: Disclosure of Accounting Policies

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AS6: Depreciation Accounting

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AS9: Revenue Recognition

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AS10: Accounting of fixed assets

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International Financial Reporting Standards (IFRS)

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IAS1: Presentation of financial Statements

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IAS2: Inventories

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Accounting in Computerized Environment: Introduction, features, Applications in various areas of Accounting

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Unit 2 Accounting Transactions {Book}

Accounting cycle

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Journal

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Journal proper

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Opening and closing entries

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Relationship between journal and Ledger

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Rules Regarding posting

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Trial Balance

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Subsidiary books

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Purchase, Purchase returns, Sales, Sale return and cash book- Triple column

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Bank Reconciliation Statement

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Expenditure and Classification: Capital, revenue and deferred Revenue expenditure

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Unusual expenses, Effects of error

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Receipts: Capital receipts, Revenue receipt

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Difference between Capital receipts and Revenue receipt

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Revenue, Capital P/L

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Unit 3 Depreciation Accounting and Trial Balance {Book}

Depreciation Accounting

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Straight Line Methods

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Reducing Balancing Methods

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Trial Balance

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Preparation of Trial Balance

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Unit 4 {Book}

Final accounts of a Sole Proprietor

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Rectification of errors

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Manufacturing Account

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Trading Account

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Profit and Loss account

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Balance Sheet

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Final Accounts in Horizontal format

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Schedule 6 of Companies Act 1956

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Business Law University of Mumbai BMS 1st Sem Notes

Unit 1 {Book}

Contract Act 1872

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Essential Elements of a Contract

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Classification of contract

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Breach of Contract

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Remedies for Breach of Contract

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Sales of Goods Act 1930 Scope of Act

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Sales and Agreement to Sell, Essential of a Valid Sale Contract

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Condition and Warranties

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Implied Conditions and Warranties

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Rights of an Unpaid Seller

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Unit 2 {Book}

Negotiable Instrument Act Introduction of Negotiable Instrument

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Characteristics of Negotiable Instrument

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Promissory Note, Bill of Exchange, Cheque

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Crossing of Cheque

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Dishonour of Cheque

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Consumer Protection Act 1986

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Consumer

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Goods and Services

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Defects and Deficiencies Goods and Services

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Consumer Disputes and Complaints

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Unit 3 {Book}

Company

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Types of companies

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Company Law

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Incorporation of a Company

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Memorandum of Association

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Articles of Association

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Prospectus

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Meetings

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Transfer and Transmission of Shares

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Unit 4 {Book}

Intellectual Property Rights: Meaning and Objectives

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Patent

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Trademarks and Types of Trademarks

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Infringement and Passing Off

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Copyright

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Rights and Restrictions

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