Category: University of Mumbai BMS Notes

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.

2. 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.

3. 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.

5. 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.

6. 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.

7. Other miscellaneous objectives:

(a) Minimum damage to products

(b) Efficiency in order processing

(c) Making right delivery

(d) Enhancing Customer satisfaction.

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.

2. 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.

3. Replenishment of the Material or Product whenever required
4. Cost Quality Improvement
5. Shortening time to Order
6. Faster Speed to Market
7. To meet consumer demand for guaranteed delivery of high quality and low cost with minimal lead time.
8. Efficient supply chain
9. To achieve world class performance
10. More awareness of supply chain dynamics and efficiency
11. To fulfill customer demand through efficient resources
12. To optimise pre and post production inventory levels
13. Good understanding of business characteristics
14. Provide flexible planning and control mechanism
15. Reduce transportation cost
16. Greater labour efficiency, equipment and space efficiency
17. To maximize efficiency of distribution side
18. 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)

19. 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.

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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

Unit 1 Introduction to Statistics {Book}
Functions/Scope, Importance, Limitations of Statistics	VIEW
Data: Relevance of data in Current scenario	VIEW
Types of Date:	VIEW
Primary Data: Census vs Samples	VIEW
Method of Primary data collection	VIEW
Secondary Data: Merits, Limitations, Sources	VIEW
Presentation of Data: Classification, frequency distribution, Discrete & continuous	VIEW
Data Tabulation	VIEW
Graph:
Frequency Table	VIEW
Bar Diagram, Histogram	VIEW
Pie chart	VIEW
Ogives	VIEW
Measures of Central Tendency:
Mean (AM, Weighted, Combined)	VIEW
Median (Calculation and graphical using ogives)	VIEW
Mode (Calculation and Graphical using Histogram)	VIEW
Comparative analysis of all measures of central Tendency	VIEW

 

Unit 2 Measures of Dispersion, Co-relation and Linear Regression {Book}
Measures of Dispersion:
Range and co-efficient of Range	VIEW
Quartiles, Quartile Deviation and Quartile co-efficient	VIEW
Mean deviation with mean, Co-efficient of mean deviation	VIEW
Standard deviation with co-efficient of Variance	VIEW
Skewness	VIEW
Kurtosis	VIEW
Co-Relation:
Karl Pearson & Rank co-relation	VIEW
Linear Regression:
Least Square Method	VIEW

 

Unit 3 Time Series and Index Number {Book}
Time Series:
Least Square Method	VIEW
Moving average Method	VIEW
Determination of Season	VIEW
Index Number:	VIEW
Unweighted, Weighted Aggregate Method: Simple, Weighted average of Price Relatives	VIEW
Chain based index Numbers	VIEW
Base Shifting, Splicing and Deflating	VIEW
Cost of Living Index Number	VIEW

 

Unit 4 Probability and Decision Theory {Book}
Probability	VIEW
Types	VIEW
Concept of Sample space, Event	VIEW
Addition and Multiplication laws of Probability	VIEW
Conditional Probability	VIEW
Baye’s Theorem	VIEW
Expectation & Variance	VIEW
Concept of Probability distribution	VIEW
Decision Theory: Acts, State of Nature event	VIEW
Pay offs, opportunity loss	VIEW
Decision making under certainty, uncertainty, Risk	VIEW
Non-Probability:
Maximax, Maximin, Minimax, Regret, Laplace & Hurwicz	VIEW
Probabilistic (Decision making under risk): EMV, EOL, EVPI	VIEW
Decision Tree	VIEW

 

Unit 1 {Book}
Communication Meaning, Concept and Process	VIEW
Emergence of Communication as a Key Concept in the Corporate and Global World	VIEW
Impact of Technological Advancement on Communication	VIEW
Objective of Communication	VIEW
Communication Channels	VIEW
Vertical Communication	VIEW
Horizontal Communication	VIEW
Diagonal Communication	VIEW
Grapevine Communication	VIEW
Verbal Communication Meaning and Characteristics	VIEW
Non-Verbal Communication Meaning and characteristics	VIEW
Business Etiquettes	VIEW
Telephone, SMS Communication and Facsimile Communication (FAX)	VIEW
Computers and e-Communication Video	VIEW
Satellite Conferencing	VIEW

 

Unit 2 {Book}
Barriers to Communication	VIEW
Way to Overcome Communication Barriers	VIEW
Listening, Importance of Listening Skills	VIEW
Cultivating Good Listening Skills	VIEW
Business Ethics Meaning and Importance	VIEW
Interpretation	VIEW
Personal Integrity at the Workplace	VIEW
Business Ethics and Media	VIEW
Computer Ethics	VIEW
Corporate Social Responsibility	VIEW

 

Unit 3 {Book}
Business Letter Writing: Theory, Parts and Structure	VIEW
Business Letter Writing Layout	VIEW
Principles of Effective Letter Writing	VIEW
Principles of Effective email Writing	VIEW
Personnel correspondence Statement of Purpose	VIEW
Job Application Letter and Resume	VIEW
Letter of Acceptance of Job Offer	VIEW
Letter of Resignation	VIEW

 

Unit 4 {Book}
Paragraph Writing	VIEW
Cohesion and Coherence	VIEW
Data Interpretation	VIEW